Gulf-Bound Tar Sands for Export? Follow the Oiltanking Trail

picture-7018-1583982147.png
on

Theย U.S. Senate failed to get the necessary 60 votes to approveย the northern leg ofย TransCanada‘s Keystone XL pipeline, but incoming Senate Majority Leaderย Mitch McConnell (R-Ky.) already promised it willย get another voteย when the GOP-dominated Senate begins its new session inย 2015.

Though the bill failed, one of the key narratives that arose during the congressional debate wasย the topic of whether or not theย tar sands productย that may flow through it will ultimately be exported to the global market.ย President Barack Obama, when queried by the press about the latest Keystone congressional action, suggestedย tar sands exports are the KXL line’s raison d’etre.

Obama’s comments struck a nerve. Bill sponsor U.S. Sen. Mary Landrieu (D-La.) and supporter U.S. Sen. John Hoeven (R-ND) both stood on the Senate floor and said Keystone XL is not an export pipeline in the minutes leading up to the bill’sย failure.

โ€œContrary to the ranting of some people that this is for exportโ€ฆKeystone is not for export,โ€ย said Landrieu, with Hoeven making similarย remarks.

But a DeSmog probe into aย recent mergerย of two major oil and gas industry logistics and marketing companies,ย Oiltanking Partnersย andย Enterprise Products Partners,ย has demonstrated key pieces of the puzzle are already being put together by Big Oil to make tar sands exports aย reality.ย 

And bothย Keystone XLย andย Enbridge‘s โ€œKeystone XL Cloneโ€ serve as key thoroughfares for making itย happen.

Oiltanking-Enterpriseย Marriage

On November 13, theย day before the U.S. House of Representatives votedย to approve Keystone XL North,ย Enterprise acquired Oiltanking. Both companies stand to gain from its prospective approval, as well as theย recent approval of Keystone XL‘s Clone, and both companies have made big bets on fossil fuel exportsย at-large.

The Keystone XL cloneย โ€” theย Alberta to Freeport, Texasย combination of Enbridge’sย Alberta Clipper,ย Flanagan Southย andย Seaway Twinย pipelinesย โ€” has a key tie to Enterprise Products. That is, Enterpriseย co-owns the Cushing, Oklahoma to Freeport, Texasย Seaway Twin pipelineย withย Enbridge.

In June,ย Enterprise received one of the first oil export permitsย inย more than four decades from the Obama Administration.ย 

Oiltanking, in turn, owns two key Gulf-area terminals that will serve as a final destination for Enbridge’s tar sandsย diluted bitumen (โ€œdilbitโ€).ย One of themย sits in the Houston Ship Channel, while theย other sits in Beaumont, Texas.ย 

As covered previously on DeSmogBlog, Keystone XL South has a keyย fork in the road called the Houston Lateral Pipelineย that will supplyย Houston’s refinery rowย with dilbit. An article published inย RBN Energyย byย Sandy Fieldenย explained thatย TransCanada’s Houston Lateralย willย feed into Oiltanking’s Houston Ship Channel terminal.

Seaway Twin also has two lateral pipelines in the works from Freeport, one of which will deliver dilbit to the Oiltanking-owned Houston Ship Channelย terminal.ย 

Seaway Twin Pipeline

Image Credit:ย Seaway Twinย Pipeline

Enterprise: Oiltanking for Fossil Fuelย Exports

The interconnected business plans of Enterprise and Oiltanking, withย Enterprise accounting for 30 percent of Oiltanking’s salesย prior to acquisition, further calls into questionย whether the pipelines have anything to doย with โ€œenergy independence.โ€ย 

Industry analystsย agree.

โ€œSome of it will stay in Gulf, some of it will leave,โ€ย Sarah Emerson, president ofย Energy Security Analysis, Inc., said in aย recent Reuters article. โ€œI don’t think anyone would have built if they thought the oil was just going to stay in the Gulf Coast, that is like bringing coal toย Newcastle.โ€

Look no further than to Enbridge, which as DeSmogBlog pointed out in a recent article, hasย already begun exporting tar sands to the global marketย via its subsidiary,ย Tidal Energy Marketing.ย Traders told Reuters they expectย tar sands exports to increaseย when Seaway officially opens for business in December.

LPG, Coal, Petcokeย Exports

Oiltanking’s assets also serve as key terminals for exportingย liquid petroleum gas (LPG), coal andย petroleum cokeย (โ€œpetcokeโ€). Petcoke is a tar sands by-productย currently exported from the U.S. at record rates.ย 

Enterprise exports LPG from Oiltanking’s Houston Ship Channel terminalย andย it recently expanded its capacity to do so.ย 

โ€œUpon completion of the expanded facilities, Enterprise will have aggregate capacity to load in excess of 16 million barrels per month of low-ethane propane and/or butane,โ€ย explained a press release announcing the expansion.ย 

In the coal sphere,ย Oiltanking purchasedย United Bulk Terminalย as a wholly-owned subsidiary inย 2012.

United Bulk Terminalย โ€is the largest dry bulk export terminal on the Gulf Coast and is considered a critical logistic link in coal and petroleum coke international supply chains,โ€ย its website explains.

In May,ย environmental groups filed a lawsuit against Oiltankingย for โ€œunpermitted discharge into the Mississippi River and significant build-up of coal in the batture and along the river’sย edge.โ€ย 

The groups alleged Oiltankingย โ€œfailed on a daily basis to take all reasonable steps to minimize or correct the adverse environmental impacts resulting from its spilled wastes for at least the past five years, and continues to fail on a daily basis to minimize or correct the environmental impacts from its waste โ€“ including without limitation waste that is now located in the [Mississippi River].โ€

United Bulk Terminal Oiltanking Coal Exports

Photo Credit:ย Gulf Restorationย Network

Tar Sands Exportsย Next?

Now that Enterprise has purchased Oiltanking, multipleย business,ย industryย andย investorย pressย articlesย have argued they did so as a forward-looking wager on the possibility of a wholesale lifting of ban on exports of U.S.-produced oil by the Obamaย Administration.ย 

Bloomberg, for example, hailed it โ€œthe latest bet on the growing market for U.S. energy exports.โ€ Others sang a similarย song.

โ€œOiltanking Partners’ assets are strategically located to take advantage of U.S. oil exports if the four-decade prohibition is lifted,โ€ย declared an articleย inย The Motley Fool, a popular investor press publication. โ€œThat access to water and ample storage capacity put Oiltanking Partners in prime position to export oil in the event of federal approval of suchย business.โ€

Investor credit-rating agencyย Standard & Poors also chimed in,ย giving the merger aย BBB+ investment ratingย (among the highest grades possible) and taking note of the company’s exportย agenda.ย 

Sen. Landrieu said those pointing out that Gulf-bound tar sands pipelines like Keystone XL are at least in part for export were โ€œranting.โ€ But the reality is that if the industry and their investors get it their way, they will soon be festively raving all the way to theย bank.ย 

Photo Credit:ย Wikimediaย Commons

picture-7018-1583982147.png
Steve Horn is the owner of the consultancy Horn Communications & Research Services, which provides public relations, content writing, and investigative research work products to a wide range of nonprofit and for-profit clients across the world. He is an investigative reporter on the climate beat for over a decade and former Research Fellow for DeSmog.

Related Posts

on

The new leader of the opposition has regularly criticised the UKโ€™s green ambitions.

The new leader of the opposition has regularly criticised the UKโ€™s green ambitions.
on

Lucy von Sturmer and Duncan Meisel are building communities of creatives dedicated to preventing the advertising and public relations industry from casting polluters as climate saviours.

Lucy von Sturmer and Duncan Meisel are building communities of creatives dedicated to preventing the advertising and public relations industry from casting polluters as climate saviours.
Opinion
on

It's time to come together to collectively work through the anxiety, grief and overwhelm so many of us are experiencing.

It's time to come together to collectively work through the anxiety, grief and overwhelm so many of us are experiencing.
on

UCP pledges to abandon the provinceโ€™s net zero targets, and remove the designation of CO2 as a pollutant.

UCP pledges to abandon the provinceโ€™s net zero targets, and remove the designation of CO2 as a pollutant.