Wednesday, 7 January 2015

Being Green Makes Economic Sense not Voodoo Economics of the worst kind.

Oil producing countries will argue that we cant afford to be green. Brave leaders promise they will never let one tree stand in front of one job.

The fact is we are now realising waste may have up front profits but in the long term its a dead industry.(fishing comes to mind)  Industries dependent upon water for processing are leaving California and Texas for the Great Lakes basin. Where moving is not a option Industry is planting trees and cutting pollution to make the existing water resources go farther.

The cost of the Keystone Pipeline is expected to double reaching 10 Billion Dollars. Consider that for every barrel of oil refined the yield in fuel is about half. For oil sands perhaps a quarter. So piping bitumen 6,000 Kilometres that needs 10% lubricant added makes no sense. For the same ten Billion a refinery on site could be built with a capacity near 1 million BBL/ day. Keystone will only ship 800,000 BBL/day, and 10% of this is additive. Therefore our refinery will bring four times the capacity of the Keystone to market.  The cost of transport for the same amount of BTU produced by demand 75% less than Keystone. The important point is that the end product will be much less expensive to produce. Can you imagine the energy required to move the bitumen 6000km. I have not done the math but it seems reasonable the energy to make fuel directly from oil sands would be less. So in fact you are producing the final product for free or less. 

Refining is a process that heats oil up until it turns to gas. This gas is then collected and condensed into the required product. When you make bitumen the oil sands must be heated, then they cool, then they are transported and heated again 6000 Km away. Imagine all the energy saved by only heating the oil sands once.

The argument for Keystone is not economic its political. Its voodoo economics of the worst kind.

As you can see from the diagram its easier to make diesel than gasoline. Governments should abandon gasoline and only make JetfuelA. This is just diesel, so all our fuel needs could be met by one fuel. The greater efficiency of this is very compelling from start to finish.

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