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19. Keystone boosters turfed from office in bitumen’s homeland

Keystone boosters turfed from office in bitumen’s homeland

Wednesday, May 06, 2015
Written by David Thomas, Contributing Editor

Prospects for the contentious Keystone XL pipeline proposed to connect Alberta’s northern tar sands with U.S. Gulf Coast refiners has endured another brutal body check, this time from the home team. The province’s brand-new, left-leaning government elected May 5 says it will cease its predecessor’s long campaign of supplicating and bullying President Barack Obama for the pipeline’s approval. ... Cross-border transportation of much Alberta bitumen may thus default to rail—on condition that producers figure out how to ship the stuff without the highly volatile naptha and hydrogen components artificially added to make the goop flow and to juice up its energy content.
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Before last winter’s twin oil train disasters in northern Ontario, conventional wisdom was that old DOT-111s could be reassigned to Alberta bitumen service as they were phased out for more volatile crudes, particularly Baaken. The CN derailments and chain reaction explosions revealed that bitumen is no longer benign, barely flammable tar once it has been diluted with highly explosive naptha or synthetically charged with hydrogen.

If CBR is to continue as a conduit for Alberta’s modified bitumen, shippers will have to find a way to reduce its volatility. U.S. regulators are making clear that new tank cars and operating rules are just the first step in de-weaponizing the shipment of crude by rail. It now seems clear that new rules are on the way to require removal of explosive gases before loading into railcars, instead of adding them as bitumen shippers do now. ... The only visible option is to heat raw bitumen so that it will flow into and out of tank cars. That requires special tank cars with internal steam coils that re-melt the bitumen at its destination. Such steam-coiled cars are rare and none conform to the new DOT-117 specification. In fact, the new tank car specs do not even consider steam coils as an option.

Thus, Alberta’s dumping of Keystone XL as an objective of public policy creates a long-term opportunity for CBR, but only if tar sands bitumen can be carried across international boundaries in a state acceptable to regulators and politicians.