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Talisman Energy Inc. Message Board

  • jonah1116 jonah1116 Jul 27, 2014 8:02 PM Flag

    Talisman assets worth anything? Consider this............

    The bad news about the diluted bitumen (or dilbit) that would come from the Canadian Tar Sands to fill the
    pipeline is that it is not crude oil. It is more toxic than crude oil, far heavier, and more expensive to clean up.
    We have good data on this because of a major leak in 2010 into the Kalamazoo River from a pipeline carrying
    dilbit. The first problem came from the benzene, a light petrochemical that is added to the dilbit, without which
    the dilbit is too thick to actually move along a pipeline. After the leak of over a million gallons, which ran for
    17 hours before pumping finally stopped, the benzene evaporated into a brown poisonous gas, necessitating the
    immediate evacuation of all neighboring houses. The second problem was that after the loss of its benzene the
    diluted bitumen became just plain bitumen – close to the tarry stuff that goes on roads – and sank to the river
    bottom, where it bounced slowly along, creating lasting damage for scores of miles. The cost so far, for work
    that still continues two and a half years later, has reached an estimated $1,000 a gallon, over 20 times the already
    heavy cost of dealing with regular oil in a river leak. These details can be checked in a detailed report that won
    last year’s Pulitzer Prize for American Journalism from InsideClimate News.2
    So much for the risks. Now what about the rewards? The main potential reward, especially in an economy
    that is having the slowest recovery ever recorded, is in job creation. Job creation turns out to be an incredibly
    complicated economic issue, depending on the unique circumstances of each project and how it interacts with
    competing projects. If there were armies of unemployed welders and other construction workers sitting around,
    one could easily imagine that almost every job needed would draw from the unemployment pool and would be
    true job creation. But what if there were intense competition for every welder, every oil worker, and most heavy
    construction workers? Then we would not be in the job creation business but in the job competition business,
    deciding which potential employer will bid up wages and which will go without workers. A recent Bloomberg
    article opened with the question, "How high is the demand for welders to work in the shale boom on the U.S.
    Gulf Coast?" It then answered, "So high that you can take every citizen in the region of Lake Charles between
    the ages of 5 and 85 and teach them all how to weld and you’re not going to have enough welders," citing a
    source from Huntsman Corp. "So high that San Jacinto College in Pasadena, Texas, offers a four-hour welding
    class in the middle of the night" because the equipment is finally available then.
    The article points out that in the Gulf area shortages of welders, fabricators, pipe fitters, and oil and gas workers
    are pushing up wages so fast that expansion projects are running well over budget already and some, like a $20
    billion gas-to-liquids plant slated by Royal Dutch Shell Plc for Louisiana, have already been canceled. Labor
    conditions in the Gulf Coast will be especially tight in 2016 and 2017 and projects along the Houston Ship
    Channel alone are expected to employ more than 250,000 workers, according to the Port of Houston Authority.
    Attempts to calculate investment opportunities opened up by cheap local supplies of natural gas or to estimate
    the time it will take to absorb the current surplus will have to take into account this chronic shortage of workers
    with the required skills. In this area – oil and chemicals in the Gulf – as in many others, the shortfalls in the
    quantity and quality of U.S. training programs are playing a painful role.
    Considering the above, it is clear that the XL Pipeline will not "create" jobs. Every one of its potential workers,
    almost all of whom already travel widely for jobs, could get a job several times over if given an hour on the
    telephone. What is happening here is an allocation of limited manpower resources: will we use them to extend
    chemical plants to capitalize on the incredible U.S. advantage in cheap natural gas; will we extend our fracking
    of U.S. sweet crude; or will we transport Canadian diluted bitumen, the most dangerous and toxic of all fuels, in
    order to increase the price for a handful of Canadian Tar Sand producers who currently suffer from constrained
    delivery capabilities and hence lower local prices? Even ignoring the severe environmental risks, it should be
    an easy decision on economic grounds alone.
    2 Elizabeth McGowan, Lisa Song, and David Hasemyer, "The Dilbit Disaster: Inside the Biggest Oil Spill You’ve Never Heard Of," InsideClimate News, June
    24, 2012.

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