The argument is familiar to just about every American by now: The United States needs to import more Canadian crude oil to secure its energy independence, and building the proposed Keystone XL import pipeline is critical to accomplishing that goal.
Within the U.S. oil industry, however, the hot topic these days is not the nation's need to import Canadian oil—it's the possibility of exporting crude oil produced in the United States.
"A paradigm shift happens when reality smacks you upside the head, and reality is now smacking us upside the head," said Mark Mills, a senior fellow of the Manhattan Institute for Policy Research, a conservative, free-market think tank. "We're about to have a gusher of oil."
That expectation is causing the industry to make massive investments to reconfigure North America's pipeline network and change the way oil has been flowing for decades. "North America is in the process of being repiped," Al Monaco said as he kicked off his tenure as the new CEO of pipeline operator Enbridge Inc. earlier this month.
The Canada-to-Texas Keystone XL is the most visible and highly charged part of that pipeline system restructuring, even though critics are now questioning the logic of building an import pipeline when the industry is increasingly focused on exports.
Story updated at 3 p.m. EDT, Oct. 4, 2012
The utility that runs California's troubled San Onofre nuclear plant is in the midst of unprecedented upheaval as it works to rein in bloated management, address ethics issues and digest new evidence that many of its employees work in a "pressure-cooker" environment marked by overwork, distrust and fear of retaliation, according to documents obtained by InsideClimate News.
The internal documents—one report, one companywide survey and a series of management e-mails—reveal that in the last few months, electric utility Southern California Edison has quietly begun a restructuring that has thus far included the ouster or retirement of several top executives, the consolidation of ethics investigations within SCE's corporate parent and the reorganization of several departments.
In addition to the unpublicized shakeup, the company recently announced it would reorganize management at its idled San Onofre Nuclear Generating Station (SONGS) and cut more than 700 jobs, or about a third of the plant's payroll. And last week, Edison told employees it would also trim 20 percent of the managers in the utility's Information Technology group.
The big changes at Edison, which operates SONGS and is its majority owner, come at a critical juncture in an ongoing debate about the safety, cost and necessity of restarting the nuclear plant's two reactors. SONGS has been shut down since February because of fears that excessive wear inside its steam generators could trigger a radioactive leak.
A Canadian division of Koch Industries is reviewing a range of offers to buy up to 220,000 net acres of its many undeveloped oil sands properties within Alberta's vast reserves of oil sands.
The company, Calgary-based Koch Oil Sands Operating ULC, said in June it was looking for strategic investors to help accelerate production on six properties held by the limited partnership Koch Exploration Canada. The company later said it would entertain offers to acquire the entire Koch Exploration partnership or to buy any of the projects.
The Koch projects will extract bitumen using a non-mining technique called steam-assisted gravity drainage (SAGD), and are in various stages of development. The projects could ultimately yield an estimated 2.9 billion barrels of "recoverable" resources and could position the buyer "to be a top tier Canadian bitumen producer," according to an online description of the offering.
The move by Koch to sell off one of its partnerships pulls the curtain back further on the Koch family's deep but quiet involvement in Canada's tar sands industry. Koch Industries has had a stake going back 50 years in Canadian heavy oil through mining, pipeline development and refining. Its Pine Bend Refinery in Minnesota is now responsible for about 20 percent of the oil sands crude being piped into the United States and has played a key role in the growth of the family's fortune. The family stands to profit further from growing U.S. reliance on tar sands imports.
Two more Southern California city councils voiced urgent concerns about the crippled San Onofre nuclear plant this month, but hopes are dimming that those communities and others near the troubled plant will have any role in deciding its fate.
The Laguna Beach and Santa Monica city councils joined a growing list of local officials imploring federal regulators to conduct trial-like public hearings on San Onofre's problems. The cities also called on the California Public Utilities Commission (CPUC) to launch—without further delay—its recently postponed investigation into the plant's lengthy outage and mounting costs.
The twin-reactor power plant, located on the coast between San Diego and Los Angeles, hasn't produced any power since the end of January, when a small radiation leak triggered a shutdown that has already lasted seven months. Investigators subsequently found unprecedented deterioration of the tubes that circulate radioactive steam inside San Onofre’s new steam generators.
North Dakota's unexpected oil boom has triggered a surprising development that people outside the industry have yet to grasp: U.S. domestic crude oil must now compete with Canadian imports for space on the nation's pipeline system.
That new reality is at the core of an escalating battle between Canadian pipeline giant Enbridge Inc. and a tiny U.S. pipeline operator that's trying to get North Dakota's newfound oil riches to more U.S. refiners.
High Prairie Pipeline LLC wants to build a pipeline to carry oil east out of North Dakota's prolific Bakken oil formation. Oil producers there outgrew North Dakota's few pipelines long ago, and the bottleneck is forcing them to use pricier rail cars and truck fleets to deliver their crude. That limits their potential customers and cuts into profits.
For High Prairie's $650 million project to succeed, it must connect with Enbridge's 1,900-mile Lakehead system, which carries oil to refineries in the Midwest and to pipelines headed farther south. According to complaints High Prairie has filed with the Federal Energy Regulatory Commission and two other federal agencies, Enbridge initially said it had enough capacity to accommodate High Prairie oil at its hub in Clearbrook, Minn. But later Enbridge said it didn't have room for the oil and would allow the Clearbrook connection only if, among other things, High Prairie assumed the financial risk of a $1 billion expansion on a section of the pipeline system, according to the FERC complaint.
Peter Lam's resume reflects a lifetime of experience in the nuclear energy industry–including 20 years in the private sector, followed by 18 years as an administrative judge at the U.S. Nuclear Regulatory Commission.
He's a retired nuclear engineer with 110 published judicial decisions and more than 70 technical papers in industry journals and company publications. And he's considered an international expert on nuclear reactor safety and risk assessment strategies.
So nuclear opponents were stunned last year, when Lam revealed how the Fukushima Daiichi meltdown had changed his views on the importance of accident probabilities—a key tenet of America's nuclear safety policy.
In a presentation before the California Energy Commission in July 2011, Lam raised questions about the NRC's reliance on "likelihood calculations" to guide its safety and plant design regulations. He said the industry practice of not planning for statistically improbable accident scenarios—like the disasters that struck Fukushima—could be catastrophic and needed to end.
Add this to the list of questions surrounding Southern California's troubled San Onofre nuclear plant: Should the state create an independent committee to watch over its operations and keep the public better informed?
It's an idea being pondered anew in the California attorney general's office as criticism mounts over dangerous equipment flaws at the twin-reactor facility. The problems will keep the plant shuttered at least through August—and could eventually force its permanent closure.
Forming an oversight committee would be a bold and controversial move for California on the nuclear front, but not an unprecedented one. The only U.S. nuclear plant already subjected to that kind of independent monitoring is Diablo Canyon on California's Central Coast. Its review panel grew out of a 1988 settlement that resolved a battle over Diablo Canyon's costs.
SAN JUAN CAPISTRANO, Calif.—A watchdog group intent on permanently shuttering the troubled San Onofre nuclear power station in Southern California has seized on the plant's current crisis to expose the facility's operations to the kind of public scrutiny it has avoided for decades.
San Onofre, a twin-reactor site along the coast between Los Angeles and San Diego, was forced offline Jan. 31 by a small radiation leak from a tube in one of the plant's recently installed steam generators. Experts then found unusual tube deterioration in the plant's other steam generators, a problem that's so tough to solve safely that both reactors will remain idle at least through August.
Ongoing troubles at Southern California's San Onofre nuclear power plant have galvanized area residents, city officials and environmental groups—putting an emphatic end to a complacency that was unusual for a densely populated region with a nuclear plant in its midst.
These days, public meetings about San Onofre are jammed with residents and media outlets. Local groups are calling for the plant's closure, city councils are demanding assurances about safety, Friends of the Earth and other national groups are re-engaged, and the actions and statements of both the Nuclear Regulatory Commission (NRC) and operator Southern California Edison (SCE) are being examined like never before.
While investigators examine the steam generator damage that has forced the months-long outage at California's San Onofre nuclear power plant, the cost of the shutdown and any necessary repairs continues to mount—and it's unclear who will end up paying the bill.
The new costs will easily exceed $100 million—and would be substantially higher if they included ongoing work on the steam generators as well as a prolonged period with reduced or zero power generation. The outlays include equipment repair or replacement costs, the expense of securing power contracts and daily electricity purchases while the plant is off line, as well as items such as increased regulatory oversight and customer-funded incentives for energy conservation.
San Onofre's troubles are worrisome because it is located on the Southern California coast between San Diego and Orange County—a densely populated region where more than 8 million residents live within a 50-mile radius of the twin reactors. That fact, plus unease over other problems at the aging facility and heightened fears about the safety of all nuclear plants has led some community groups to call for the plant's permanent closure—a scenario similar to mounting public opposition to the Indian Point nuclear plant near New York City.