Greenpeace
activists from Canada, the U.S. and France placed a giant banner
reading “Tar Sands: Climate Crime” blocking the giant tar sands mining
operation at the Shell Albian Sands outside of Fort McMurray, Alberta,
Canada onTuesday, September 15, 2009. (Greenpeace)
Although TransCanada's
Keystone XL tar sands pipeline has received the lion's share of media attention, another key border-crossing pipeline benefitting
tar sands producers was approved on November 19
by the U.S. State Department.
Enter
Cochin, Kinder Morgan's 1,900-mile proposed pipeline to transport gas produced via the controversial
hydraulic fracturing ("fracking") of the
Eagle Ford Shale basin in Texas north through Kankakee, Illinois, and eventually into Alberta, Canada, the home of the tar sands.
Like Keystone XL, the pipeline proposal requires U.S. State
Department approval because it crosses the U.S.-Canada border. Unlike
Keystone XL - which would carry diluted tar sands
diluted bitumen ("dilbit") south to the Gulf Coast - Kinder Morgan's Cochin pipeline would carry the
gas condensate (diluent) used to dilute the bitumen north to the tar sands.
"The decision allows Kinder Morgan Cochin LLC to proceed with a $260
million plan to reverse and expand an existing pipeline to carry an
initial 95,000 barrels a day of condensate,"
the Financial Post wrote.
"The extra-thick oil is typically cut with 30% condensate so it can
move in pipelines. By 2035, producers could require 893,000 barrels a
day of the ultra-light oil, with imports making up 786,000 barrels of
the total."
Increased demand for diluent among Alberta's tar sands producers has created a
growing market for U.S. producers of natural gas liquids, particularly for fracked gas producers.
"Total US natural gasoline exports reached a record volume of 179,000
barrels per day in February as Canada's thirst for oil sand diluent
ramped up,"
explained a May 2013 article appearing in Platts. "US natural gasoline production is forecast to increase to roughly 450,000 b/d by 2020."
Before Eagle Ford, Kinder Morgan Targeted Marcellus
Pennsylvania's
Marcellus Shale basin
was Kinder Morgan’s first choice pick for sourcing tar sands diluent
for export to Alberta. It wasn't until that plan failed that the Eagle
Ford Shale basin in Texas became Plan B.
Known then as the
Kinder Morgan Cochin Marcellus Lateral Project proposal, the project fell by the wayside in February 2012.
"The company’s Cochin Marcellus Lateral Pipeline would have started
in Marshall County, West Virginia, and transported natural gas liquids
from the Marcellus producing region of Pennsylvania, West Virginia and
Ohio,"
wrote the Mount Vernon News of
the canned project. [It] would [then] carry the [natural gas] liquids
to processing plants and other petrochemical facilities in Illinois and
Canada."
"Kinder Magic": More to Come?
Industry market trends publication RBN Energy described Kinder Morgan's dominance of the tar sands diluent market as "
Kinder Magic" in a January 2013 article.
"These are still early days for the developing condensate business in the Gulf Coast region,"
RBN Energy's Sandy Fielden wrote.
"Plains All American and Kinder Morgan are developing the potential to
deliver at least 170,000 barrels per day of Eagle Ford condensate as
diluent to the Canadian tar sand fields in Alberta by the middle of
2014."
Fielden explained we could see many more of these projects arise in the coming years.
"We have a sense that before too long there will be many more
condensate infrastructure projects showing up like 'magic' in midstream
company presentations."
While the industry press coverage sounds optimistic, it doesn’t
account for the concurrent rise of public opposition to dirty energy
pipelines and expansion plans in the fracking and tar sands arenas, so
only time will tell the fate of Cochin and its kin.
© 2013 DeSmog Blog
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