CDZ Dakota Pipeline Not a Big Deal?

Discussion in 'Clean Debate Zone' started by Toronado3800, May 1, 2017.

  1. Toronado3800
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    Toronado3800 VIP Member

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    Hello,

    Another thread reminded me of something I read awhile back.

    So I guess lets start with basics. Is this website real? Dakota Access Pipeline Facts

    Assuming it is, is moving ~6 trains worth of oil a day to a pipeline a big deal?
     
  2. william the wie
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    william the wie Gold Member

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    Very much so, it lowers the breakeven point needed to bring new fields online
     
  3. Picaro
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    Picaro Gold Member

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    Looking up the price per brl by rail versus by pipeline and it does little or nothing; it puts a few more pennies in the pipeline company's pocket, the shareholders get richer. They don't have to do anything but match the railroad price, their only competitor, so even if it lowered the pipeline company's costs down to a nickel a brl they're going to charge what they charge now to the customers. Why wouldn't they?

    The Keystone Extension all the noise was made about only cut a few miles off the total trip of the system by making a triangle across a square corner; that stuff had already been flowing to the Gulf all along over the system already in place. You can calculate it yourself by using simple trigonometry. when the price of the sludge drops low enough and it's no longer economical to mine and ship, the pipeline company files for bankruptcy, abandons the pipeline, and the tax payers get left to pay for cleaning it up after them, like always.
     
    Last edited: May 1, 2017
  4. Toronado3800
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    Toronado3800 VIP Member

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    According to the math I have done, this pipeline, 3.6 billion to build, was for a $7ish per barrel break per barrel vs using a train.

    The most dramatic way I can put that is if the break even point on pumping wherever it comes from was $65 a barrel it is now $58. Not insignificant to the companies pumping I suppose or the guys getting laid off when oil hits $63 a barrel (or whatever).

    Pipelines in seem a little bit safer to transport on than trains. Not sure I buy all the statistics. Railcars pass a lot of eyes, pipelines leak wherever until someone mentions it to the pipeline company.

    Will this pipeline affect those of us not working for the railroad or in the oil fields...I dunno. Assuming it pumps 470,000 barrels a day and we use 19,630,000,000 barrels a day as a country it moves .0239% of our oil. Not a big percentage I guess. The savings though, $7 x 470,000 barrels is $3,290,000 per year. Not chump change.

    But it cost $3,800,000,000 to build supposedly so it won't pay for itself for 1,155 years? (Did I really do the math correctly?)

    Now if it increases xyz company's ability to ship oil by 470,000 barrels a day because the rail option is still there and there is now a pipeline also maybe it can cut that 1,155 years down some? Assuming $18 per barrel profit for the oil company that can be $8,460,000 of missed oil pumping profit in a year.

    $8,460,000+$3,290,000= $11,750,000 a year of increased profit. Still takes a while to get to $3.8 billion, 323.4 years. That's a number people in the new world can relate to at least.

    What am I missing number wise here? I messed something up I bet. There is no way this thing was built to pay for itself in 323 years. Tax deductions maybe?
     
  5. Picaro
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    Picaro Gold Member

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    What you're missing is that it isn't going to lower costs nearly as much as is claimed, certainly not by $7 a brl. just for that little leg, nor is the costs savings going to be passed on to consumers anyway; they only have to be a little bit cheaper than the rail charges per brl., no matter how much cheaper the costs are in any case. Put the rail competition out of business and they charge a lot more, whatever the market will bear. The finds in West Texas alone will make the costs of the Canadian stuff too expensive and probably cut back on the production there by more than enough to make the line obsolete anyway, at any cost. As I said, it's only a short term benefit for the pipeline owners and nobody else.

    Short term increases in cash flow aren't 'profits' to the company, and they aren't going to retain much in the way of earnings, it's almost all going to go to paying larger dividends to individual stockholders. the execs and shareholders could care less if it's ever paid off at all.. The 19th century railroad barons used the same tactics to build up personal wealth and saddling the corporations with huge mountains of debt; they were never going to have to pay for that debt themselves, thanks to 'limited liability' schemes and the 'corporate person-hood' legal fictions.
     
    Last edited: May 1, 2017
  6. william the wie
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    william the wie Gold Member

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    You can't ship Canadian oil in Canada.
     
  7. Xelor
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    Xelor Gold Member

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    I am sure it is to the people paying for and being paid for the oil and its transport.
     
  8. william the wie
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    william the wie Gold Member

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    Also the peace of mind that the oil is not on a train creating far greater risks is a bigger consideration.
     
  9. Picaro
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    Picaro Gold Member

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    Pipelines are the bigger risk; train cars carry small amounts; a pipeline break will dump far more on the ground than a train wreck will. Pipelines also explode, many times spectacularly so. They also run through residential areas and right the middle of cities.
     
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  10. william the wie
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    william the wie Gold Member

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    That would be the natural gas pipelines that explode but crude explosions are a result of train wrecks more often than not.
     

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