Oil companies forging ahead with pipelines and refineries to process tar-sands oil

Infographic: Tripling Tar Sands Oil Imports to U.S.

Stoked by profits from $70 to $80 a barrel oil, the titans of the fossil fuel industry are investing towering sums to develop, transport and refine tar sands oil from Canada. The industry is spending $15 billion annually to triple oil production in northern Alberta, Canada, $31 billion to construct a massive new pipeline network to ship tar sands oil to the United States, its largest market, and at least $20 billion to retrofit and expand American refineries in the Great Lakes states, the Midwest, Great Plains and Gulf Coast to process it into transportation fuels. The U.S. Environmental Protection Agency on July 16 intervened in the State Department’s evaluation of a permit to build the $7 billion Keystone pipeline, the latest of three big tar sands oil pipelines from Alberta to the United States.
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http://www.circleofblue.org/waternews/2010/world/tar-sands-oil-production-is-an-industrial-bonanza-poses-major-water-use-challenges/">Tar Sands Oil Production, An Industrial Bonanza, Poses Major Water Use Challenges


On the ground in Union County, South Dakota, more than 1,700 miles south of Alberta, the place where 400,000 barrels of that tar sand oil could be refined daily into gasoline, diesel and jet fuel is still a six-square-mile expanse of prairie and farm fields awaiting a $10 billion refinery, the first new refinery in the U.S. since the 1970s.
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Huge Investment, Big Water Choke Point

But as government agencies and energy companies pour billions into production and research, a handful of technical specialists and scientists are taking a hard look at the environmental risks, including the availability of fresh water: a choke point that seems all but certain to limit unconventional fuels development.

Existing oil production in the United States from conventional reserves withdraws one billion to two billion gallons a day from rivers, lakes, and aquifers, according to the United States Geological Survey. Turning conventional oil into fuels and other products consumes about the same amount, most of it to cool the nation’s 143 refineries.

Mining and processing tar sands and shale oil, though, requires much higher quantities of water. It takes four to six gallons of water to produce one barrel of tar sands oil, which is four times more water than it takes to produce oil from conventional reserves, according to a 2009 study by Argonne National Laboratory. Meanwhile producing one barrel of shale oil takes two to three times as much as conventional oil.
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Pipeline Ties Detroit Refinery to “Dirtiest Source of Fossil Fuels”

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Costs Are Exceedingly High

The warnings are producing the first influential push back from the federal government about tar sands development. For the moment, government opposition is focused on the proposed construction of the $7 billion, 1,702-mile Keystone XL pipeline that Trans Canada hopes to transport 510,000 barrels of tar sands oil a day from Hardisty, Alberta to Oklahoma and Texas.

On June 23, 50 Democratic members of Congress sent a letter to Secretary of State Hillary Clinton urging the State Department to more vigorously review the environmental and greenhouse emissions risks of the Keystone XL pipeline, which would have the effect of encouraging tar sands oil production to increase one million more barrels a day. The letter came six days before the State Department held a public hearing on the pipeline proposal that attracted vigorous opposition from environmental and climate action organizations.

On July 2, Representative Henry Waxman, D-Calif., chairman of the House Energy and Commerce Committee, sent a letter to the State Department that also called for more rigorous review of the proposed pipeline.

“The problem is that oil can be extracted from the tar sands only by using three times the energy required to produce a barrel of conventional oil,” said Waxman. “Studies estimate that shifting to tar sands fuel increases lifecycle greenhouse gas emissions by up to 37 percent compared to the baseline fuel supply.”