Da Oil Refineries
This document was uploaded by user and they confirmed that they have the permission to share it. If you are author or own the copyright of this book, please report to us by using this DMCA report form. Report DMCA
Overview
Download & View Da Oil Refineries as PDF for free.
More details
- Words: 58,590
- Pages: 108
Oil refineries DA 7 week seniors
1
Oil Refineries DA Oil Refineries DA..........................................................................................................................................................................1 1nc Oil Refineries DA...................................................................................................................................................................3 1nc Oil Shock Impact....................................................................................................................................................................5 Uniqueness—Refineries expanding now......................................................................................................................................6 Uniqueness—Refineries expanding now......................................................................................................................................7 Uniqueness—Refineries expanding now......................................................................................................................................8 Uniqueness—Refineries expanding..............................................................................................................................................9 Uniqueness—Canadian imports now..........................................................................................................................................10 Uniqueness—Tar sand inevitable................................................................................................................................................11 Uniqueness—Tar sand inevitable................................................................................................................................................12 Uniqueness—investments now...................................................................................................................................................13 Refineries on the brink................................................................................................................................................................14 Refineries on the brink................................................................................................................................................................15 Refineries on the brink................................................................................................................................................................16 Renewables Inevitable/Free market better..................................................................................................................................17 Renewables Inevitable.................................................................................................................................................................18 Renewables fail...........................................................................................................................................................................19 Link—High demand KT refinery investment.............................................................................................................................20 Link—High demand KT refinery investment.............................................................................................................................21 Link—High demand KT refinery expansion...............................................................................................................................22 Link—Renewables......................................................................................................................................................................23 Link—LCFS................................................................................................................................................................................24 Link—LCFS................................................................................................................................................................................25 Link—LCFS................................................................................................................................................................................26 Link—LCFS................................................................................................................................................................................27 Link—LCFS................................................................................................................................................................................28 Link—LCFS................................................................................................................................................................................29 Link—ethanol..............................................................................................................................................................................30 Link—ethanol..............................................................................................................................................................................31 Link—ethanol..............................................................................................................................................................................32 Link—oil vouchers......................................................................................................................................................................33 Link—carbon tax.........................................................................................................................................................................34 Link—carbon caps/cap and trade................................................................................................................................................35 Link—perception.........................................................................................................................................................................36 Xtn—oil shocks=depression........................................................................................................................................................37 Xtn—oil shocks=nuke war..........................................................................................................................................................39 2nc—oil shocks bad—Iran..........................................................................................................................................................40 2nc Trade Deficit Impact.............................................................................................................................................................41 2nc Trade Deficit Impact.............................................................................................................................................................43 Xtn—Trade deficit bad—dollar/economy...................................................................................................................................44 Xtn—Trade deficit bad—soft power...........................................................................................................................................45 2nc NAFTA Impact.....................................................................................................................................................................46 2nc NAFTA Impact.....................................................................................................................................................................47 Xtn—Dependence KT NAFTA...................................................................................................................................................48 2nc NAFTA Impact—Mexican Economy...................................................................................................................................49 2nc NAFTA Impact—Free Trade...............................................................................................................................................50 Xtn—NAFTA KT free trade.......................................................................................................................................................51 2nc NAFTA Impact—Democracy..............................................................................................................................................52 Xtn—Dependence KT US-Canada Trade Relations...................................................................................................................54 AT: NAFTA Bad—Job Loss/Econ.............................................................................................................................................55 2nc Canada Relations Impact......................................................................................................................................................56 2nc Canada Relations Impact......................................................................................................................................................57 AT: Canada backlashes to NORAD............................................................................................................................................58 Xtn—Dependence KT US-Canada Trade Relations...................................................................................................................59 Xtn—Dependence KT US-Canada Trade Relations...................................................................................................................60
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
2
2nc Canadian economy impact....................................................................................................................................................61 2nc Canadian economy impact....................................................................................................................................................62 2nc—Canadian Economy Impact—US Economy......................................................................................................................63 Xtn—oil sands key to Canadian economy..................................................................................................................................65 Xtn—oil sands key to Canadian economy..................................................................................................................................66 AT: Refineries bad—generic.......................................................................................................................................................67 AT: Refineries bad—pollution....................................................................................................................................................68 Xtn—Chinese refineries bad—environment/pollution................................................................................................................69 Refineries Good—Oil Shocks.....................................................................................................................................................70 Refineries Good—High Oil Prices..............................................................................................................................................71 Refineries Good—High Oil Prices .....................................................................................................................................................................................................72 High Oil Prices Bad—Economy ................................................................................................................................................73 Xtn—high oil prices bad—economy...........................................................................................................................................74 AT: Refineries cause high prices.................................................................................................................................................75 Refineries good—gas prices........................................................................................................................................................76 Refineries good—oil supply........................................................................................................................................................77 Refineries good—US Canada Relations.....................................................................................................................................78 Oil Investment Good—Prices......................................................................................................................................................79 Oil Investment Good—Economy................................................................................................................................................80 Canadian Oil Sands Good—US Oil Supply................................................................................................................................81 Canadian Oil Shales Good—Dependence...................................................................................................................................82 Canadian Oil Shales Good—Dependence...................................................................................................................................83 Canadian Oil Shales Good—Dependence...................................................................................................................................84 Canadian Oil Shales Good—Economy.......................................................................................................................................85 AT: Oil shales not viable.............................................................................................................................................................86 Canadian Tar Sands Good—Gas Prices......................................................................................................................................87 Canadian Tar Sands Good—AT: Environment...........................................................................................................................88 DA Turns case—energy prices....................................................................................................................................................89 AT: Alt energy solves need for fossil fuels.................................................................................................................................90 AT: Alt energy solves need for fossil fuels.................................................................................................................................91 AT: Alt energy solves demand for oil/gas...................................................................................................................................92 Uniqueness: no refinery expansion now......................................................................................................................................93 Uniqueness—no investments now..............................................................................................................................................94 AFF—AT: Oil refinery DA.........................................................................................................................................................95 AFF—AT: Oil refinery DA.........................................................................................................................................................96 AFF—AT: Oil refinery DA.........................................................................................................................................................97 AFF—AT: Oil refinery DA.........................................................................................................................................................98 AFF—AT: Oil shocks.................................................................................................................................................................99 AFF—AT: Oil shales good.......................................................................................................................................................100 AFF—AT: Oil shales good.......................................................................................................................................................101 AFF—AT: Oil shales good.......................................................................................................................................................102 AFF—AT: Oil shales good.......................................................................................................................................................103 AFF—AT: Tar Sands................................................................................................................................................................104 AFF—AT: Tar Sands................................................................................................................................................................105 AFF—AT: Tar Sands................................................................................................................................................................106 AFF—AT: Canada relations impact..........................................................................................................................................107 AFF—AT: China fill-in.............................................................................................................................................................108
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
3
1nc Oil Refineries DA Refineries will be expanded now. The White House 08 – (June, “Policy Memorandum: American Made Energy,” The Oil Drum, http://www.whitehouse.gov/news/releases/2008/06/20080618-9.html) There are 149 refineries in the U.S. today, refining approximately 15 million barrels of oil per day. While no new refineries have been built in the last 30-plus years, existing refineries have undergone extensive modifications to adapt to changes in demand, changes in crude oil inputs, changes in fuel outputs (e.g. gasoline vs. diesel), and costs. Over the last 10 years, total capacity increased 1.85 million barrels per day, the equivalent of adding 1 medium-sized refinery per year. These expansions all took place at existing facilities. A refinery expansion or modification requires multiple permits, and can be undertaken for several reasons, including: To increase production, for example by increasing crude oil capacity or improving the yield of certain products by adding a downstream unit process To produce different types of fuel (i.e. to change the product mix to more diesel relative to gasoline) To reduce costs, by improving reliability or switching to lower quality crude oils to comply with regulations requiring cleaner fuels and changing fuel specifications. Going forward, it is predicted that refineries will continue to need to undergo modification and expansion to meet evolving demand and evolving types of inputs. The Energy Information Administration predicts that overall future demand is expected to grow less than 0.5% per year and total capacity expansion is anticipated to flatten out starting in 2010. However, a shift in demand is predicted. Demand for petroleum-based gasoline is expected to decline by about 7% over the next 15 years while demand for diesel is expected to increase about 12% over the same time. There will also be a continued need for refinery modification to accommodate a changing mix in available crude oil. For example, refineries are and will be making investments to process the increasing quantities of heavy Canadian crude oil from tar sands. Successful completion of a refinery modification requires successful completion of the permitting processes, for example those required by the Clean Air Act and the Clean Water Act. **Insert specific link** Our link is immediate: the plan immediately destroys investor confidence in refineries Drevna, 08 - President National Petrochemical and Refiners Association (Charles, CAPITOL HILL HEARING TESTIMONY, 5/6, CQ Congressional Testimony, lexis) Refinery Capacity Expansion Projects. It should be clearly understood that requirements to substantially increase the volume of ethanol and other renewables will essentially supplant a significant portion of the need/desire for additional domestic refining capacity. Refiners must make investments today on what they believe to be the longer- term (10-15 years or more) outlook. The domestic refining industry is likely to look upon rapidly rising ethanol and other bio-fuels requirements in the coming years as adding significant more risk to investments in capacity expansions. As recently as 2006, the Department of Energy (DOE) forecast that domestic refiners were likely to add 1.5 million barrels per day of capacity between 2006-2010. Based upon perceptions of renewable market developments - developments being stoked by administration and congressional actions - current estimates suggest that expansion in the domestic refining is likely to be constrained well below 1 million barrels per day. These decisions are being re-visited in boardrooms across the refining sector as the anticipated surge in ethanol requirements/mandates in the coming years will pressure domestic, and undoubtedly some foreign refiners currently supply the U.S. market to postpone or cancel new investments in petroleum refining capability. Refineries are vital to preventing oil shocks Leng, 6 – Sunita Sue, Staff writer, The Edge Singapore, “As I Call It: Taxing oil profits is no windfall solution” 5/8, Lexis After the oil shock of the late 1970s, then US president Jimmy Carter pushed through the Crude Oil Windfall Profits Tax Act in 1980. The tax was imposed on the difference between the market price of oil and a government-determined base price. According to a study by the Congressional Research Service, the windfall profits tax was expected to raise more than US$320 billion between 1980 and 1989. However, the government only managed to collect US$80 billion. Worse, the final amount was actually only about half of this because the tax was deductible against corporate income. The study also found that the tax had the effect of decreasing domestic production by 3% to 6%, increasing US dependence on foreign oil sources.
Refining bottleneck If left to the market, soaring energy prices will force everyone to moderate their gas-guzzling ways at some point, whether it's buying a smaller car or using less air-conditioning. But that will take time and that's the demand side of the equation. What really needs to come under scrutiny is the supply side -- specifically, the refineries. Oil prices are high because there is too little refining capacity. The US hasn't built a new refinery in years. In fact, since deregulation in 1982, oil consumption has risen by a third while oil companies have reduced refining capacity by a tenth, says the Foundation for Taxpayer and Consumer Rights. Refining is the bottleneck. It needs to be addressed. And while we're there, get rid of those tax breaks and subsidies that the big oil boys enjoy. The extra money could go some way towards making those hybrid cars cheaper.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
4
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
5
1nc Oil Shock Impact The economy is on the brink now—an oil shock would throw it over the edge Hall, 8 – Kevin G (all you sucka MCs), “70s woes echo today” the New York Times, 6/16, Lexis Not since the 1970s has the U.S. economy faced such an ugly combination of a persistent energy shock, a looming recession threat and menacing inflation that stays stubbornly high - even in the face of a screeching slowdown in growth. This combination has the Federal Reserve, charged by law with both sustaining growth and curbing inflation, in a bind. It must balance the needs of protecting the economy from a downturn while protecting it against an upward spiral of prices - and doing either one can make the other far more difficult. In addition, this dilemma comes amid the worst housing slump in modern times, as well as an unprecedented crisis in credit markets whose positive outcome is far from certain. Adding to the troubles are the dive of the U.S. dollar against other currencies and rising global inflation that partly mutes whatever action the Fed takes. "This thing has the potential to really unwind to create huge negative effects," said Lyle Gramley, a former Fed governor from 1980 to 1985, one of the U.S. economy's most turbulent periods. "The Fed is walking a tightrope right now, that's for sure." Please see 1970s A4 Laurence Meyer, a Fed governor from 1996 to 2002, sees some parallels between today and the late 1970s and early 1980s, when the oil-dependent U.S. economy saw double-digit inflation largely because of an unexpected energy shock. Growth fell while infla tion rose, creating stagflation - a stagnant economy and high inflation. Today's problems, he said, reflect "the first really persistent (oil) shock we've had since the 1970s, and the inflation expectations are worse than we have had over the past decade. So we're kind of in a middle area." US economic slowdown causes a global depression, crushes hegemony and causes a US-China war. Walter Russell Mead, Henry A. Kissinger Senior Fellow for U.S. Foreign Policy at the Council for Foreign Relations, 2004. Foreign Policy, Mar/Apr. EbscoHost. Similarly, in the last 60 years, as foreigners have acquired a greater value in the United States-government and private bonds, direct and portfolio private investments-more and more of them have acquired an interest in maintaining the strength of the U.S.-led system. A collapse of the U.S. economy and the ruin of the dollar would do more than dent the prosperity of the United States. Without their best customer, countries including China and Japan would fall into depressions. The financial strength of every country would be severely shaken should the United States collapse. Under those circumstances, debt becomes a strength, not a weakness, and other countries fear to break with the United States because they need its market and own its securities. Of course, pressed too far, a large national debt can turn from a source of strength to a crippling liability, and the United States must continue to justify other countries' faith by maintaining its long-term record of meeting its financial obligations. But, like Samson in the temple of the Philistines, a collapsing U.S. economy would inflict enormous, unacceptable damage on the rest of the world. That is sticky power with a vengeance.THE SUM OF ALL POWERS? The United States' global economic might is therefore not simply, to use Nye's formulations, hard power that compels others or soft power that attracts the rest of the world. Certainly, the U.S. economic system provides the United States with the prosperity needed to underwrite its security strategy, but it also encourages other countries to accept U.S. leadership. U.S. economic might is sticky power. How will sticky power help the United States address today's challenges? One pressing need is to ensure that Iraq's economic reconstruction integrates the nation more firmly in the global economy. Countries with open economies develop powerful trade-oriented businesses; the leaders of these businesses can promote economic policies that respect property rights, democracy, and the rule of law. Such leaders also lobby governments to avoid the isolation that characterized Iraq and Libya under economic sanctions. And looking beyond Iraq, the allure of access to Western capital and global markets is one of the few forces protecting the rule of law from even further erosion in Russia. China's rise to global prominence will offer a key test case for sticky power. As China develops economically, it should gain wealth that could support a military rivaling that of the United States; China is also gaining political influence in the world. Some analysts in both China and the United States believe that the laws of history mean that Chinese power will someday clash with the reigning U.S. power. Sticky power offers a way out. China benefits from participating in the U.S. economic system and integrating itself into the global economy. Between 1970 and 2003, China's gross domestic product grew from an estimated $106 billion to more than $1.3 trillion. By 2003, an estimated $450 billion of foreign money had flowed into the Chinese economy. Moreover, China is becoming increasingly dependent on both imports and exports to keep its economy (and its military machine) going. Hostilities between the United States and China would cripple China's industry, and cut off supplies of oil and other key commodities. Sticky power works both ways, though. If China cannot afford war
In an era of weapons of mass destruction, this mutual dependence is probably good for both sides. Sticky power did not prevent World War I, but economic interdependence runs deeper now; as a result, the "inevitable" U.S.-Chinese conflict is less likely to occur. Sticky power, then, is important to U.S. hegemony for two reasons: It helps prevent war, and, if war comes, it helps the United States win. But to exercise power in the real world, the pieces must go back together. Sharp, sticky, and soft power work together to sustain U.S. hegemony. Today, even as the United States' sharp and sticky power reach with the United States, the United States will have an increasingly hard time breaking off commercial relations with China.
unprecedented levels, the rise of anti-Americanism reflects a crisis in U.S. soft power that challenges fundamental assumptions and relationships in the U.S. system. Resolving the tension so that the different forms of power reinforce one another is one of the principal challenges facing U.S. foreign policy in 2004 and beyond.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
6
Uniqueness—Refineries expanding now U.S. refineries are on the brink of expansion. McCarthy, 8 (Shawn, Global Energy Reporter, “Oil Sands Demand Spurs U.S. Refinery Boom”, June 5, lexis) American refiners are making massive investments to dramatically increase imports from Alberta's oil sands, even as they face mounting pressure in the United States over the oil sands' impact on greenhouse gas emissions and other pollution. U.S. refineries are planning to expand their capacity by 1.6 million barrels a day, and some two-thirds of that is designated to handle production from the oil sands, according to data from the U.S. Environmental Protection Agency. As well, refiners are planning to convert 800,000 barrels a day of current capacity from conventional crude to handle the Alberta imports, the EPA figures show. Refineries are expanding to process Canadian tar sands. Wall Street Journal 8 [ Ana Campoy, “Refiners Face Obstacles To Procession Cheaper, Dirtier Crude Oil” June 12, http://online.wsj.com/article/SB121322847813566247.html?mod=googlenews_wsj] Refiners faced with rising prices for premium grades of crude oil are rushing to expand their ability to process less expensive, dirtier crudes, but their efforts face concerns about pollution and global warming. Several expansion projects in the U.S. are being slowed by worries that the processing of heavier crudes produces more air pollutants and greenhouse gases that contribute to climate change. While environmentalists have long been critical of heavier crude, government officials responsible for signing off on expansion projects are echoing that unease and demanding countermeasures to reduce the amount of pollution. Last week, an Environmental Protection Agency board refused to approve a permit for a refinery expansion proposed by ConocoPhillips and EnCana Corp. in Roxana, Ill., after environmentalists raised objections. In Richmond, Calif., Friday, the city's planning commission told Chevron Corp. it will restrict the crude the company can process once it upgrades its refinery there. And BP PLC is facing challenges from environmental groups to a proposed project in Whiting, Ind. Refiners have had difficulty building plants because of community opposition and lengthy and complicated permitting processes. There have been no new refineries built in the U.S. since 1976. Refiners have circumvented these barriers by expanding existing facilities. Since 1985, U.S. refining capacity has grown 20%, even as the number of refineries has fallen, according to API, the oil industry's trade group. Refiners plan to increase the amount of crude they process by 800,000 barrels a day by 2010, a 4.5% increase from current capacity, or the equivalent of four new refineries, API says. As rising oil prices outpace refiners' ability to pass along increases to consumers in a weak economy, they are looking for ways to cut costs. Because heavier crude is more difficult to process, it is less expensive than premium grades, such as West Texas Intermediate, or WTI. Prices for WTI have jumped more than 30% since the beginning of the year to more than $130 a barrel, while Mexican Maya, a heavy grade, has gone up 27% to about $105. Meanwhile, oil producers are bringing more heavy crude into the market, a trend industry officials expect to continue. In particular, refiners are working to expand production from the Canadian tar sands, which hold large reserves of ultraheavy oil. Oil Refineries are expanding now. AFP 08 – (worldwide news agency, April 28, “Shell unveils plans for ‘biggest refinery in US,” Breitbart.com, http://www.breitbart.com/article.php?id=060428150248.kurimp3k&show_article=1) Anglo-Dutch oil group Royal Dutch Shell has announced plans to make its jointly owned Motiva refinery in Port Arthur, Texas, the biggest in the United States. Shell founded the Motiva refiniery in 1998 with Saudi Refining and is considering increasing the output at the facility by 325,000 barrels per day. "The project would make the Port Arthur Refinery the largest in the country," Shell said in a statement on Friday. Output would rise to 610,000 barrels per day, higher than the 557,000 barrels per day produced by the ExxonMobil facility in Baytown, Texas, the current biggest in the country. "Pending necessary regulatory approvals, Motiva would expect to initiate final engineering later in 2006 and begin construction in 2007," said Shell, while underlining that a final decision to expand the facility had not been taken. "The new capacity would be projected to come online in 2010." A shortage of refining capacity worldwide has been identified as one of the reasons behind the recent surge in crude oil prices. Oil companies have been accused of failing to invest adequately in new facilities.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
7
Uniqueness—Refineries expanding now The US is increasing tar sand processing-3 new refineries are planned. Canada News Group 08 [“Report: U.S. Poised To Shift Most New Refining Capacity To Dirtier Tar Sands Oil Emitting Three Times More Global Warming Emissions In Extraction” http://www.newswire.ca/en/releases/archive/June2008/04/c8399.html, June 4] WASHINGTON and TORONTO, June 4 /CNW/ - Future oil refining in the U.S. may soon get much "dirtier" -- including three times more greenhouse gas emissions in the extraction process -- as refineries place their bets on a shift away from traditional crude oil to Canadian tar sands, according to a major new report issued today by the independent Environmental Integrity Project (EIP). The Washington, D.C. EIP released its new report today in conjunction with Toronto-headquartered Environmental Defence Canada (EDC). Titled "Tar Sands: Feeding U.S. Refinery Expansions With Dirty Fuel," the report notes: Two thirds -- 1.1 million barrels per day (bpd) - of the currently proposed increase in U.S. refining capacity of 1.6 million bpd would come from refining heavier, dirtier crude oil from Canadian tar sands. At the same time, more than 800,000 bpd of existing U.S. conventional crude capacity is proposed to be converted to processing oil from tar sands, so that conventional crude refining capacity is expected to undergo a net decrease of over 300,000 bpd, and the total net increase in refining capacity to come from tar sands would be over 1.9 million bpd. Since the average capacity of an oil refinery in the United States is 116,395 bpd, the contemplated 1.9 million bpd of increased tar sand capacity would be equivalent to constructing more than sixteen new refineries dedicated to tar sands. Increased tar sand refinery capacity is contemplated in Illinois and Texas (495,000 bpd together); Indiana (205,000 bpd); Louisiana (180,000 bpd); Michigan (15,000 bpd); Montana (13,000 bpd); North Dakota (65,000 bpd); Ohio (316,120 bpd); Oklahoma (44,700 bpd); South Dakota (400,000 bpd); and Wisconsin (200,000 bpd). Eric Schaeffer, director, Environmental Integrity Project, said: "It is hard to imagine what else it is that the U.S. oil industry could do to go backwards further and faster than to rely on Canadian tar sands or similar resources in the United States. Not only would this mean significantly more pollution overall, but it would substantially boost the greenhouse gas emissions linked to global warming. The U.S. government needs to get more involved in this situation to ensure that we do not end up with an environmental setback of truly staggering proportions." Matt Price, project manager for Alberta/BC Energy and Climate and contributor to the new report, Environmental Defence Canada, said: "The tar sands project is the most destructive project on Earth. Nowhere else are we talking about ripping up an area the size of Florida, creating massive toxic lakes you can see from space with the naked eye, and giving off three times the greenhouse gas emissions to produce oil when compared with conventional crude." Although a new oil refinery has not been built in the U.S. for over 30 years, five new refineries are currently under consideration, three of which would process tar sand oil (two in North Dakota and one in South Dakota), and one of which would process oil from U.S. oil shale deposits (North Dakota), which may be as destructive to mine and as dirty to refine as tar sand oil.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
8
Uniqueness—Refineries expanding now Exxon CEO says refineries are expanding now. Alden 08 – (Rich – staff writer for NPN, NPN.com – fuel, oil, industry online, “Exxon CEO: Refinery expansion can meet U.S. petroleum needs,” http://www.npnweb.com/uploads/featurearticles/2006/npnMarketPulse/032106_mp1.asp) Exxon Mobil Corp. Chairman and CEO Rex Tillerson said on March 21 that creeping refinery capacity expansion would keep up with growing U.S. demand for refined products without the need to build a new refinery. Paul Weissgarber, head of the oil and gas practice for management consulting firm A.T. Kearney, Dallas, who heard Tillerson speak at the National Petrochemical and Refiners Association annual meeting in Salt Lake City, told NPN MarketPulse, “The issue is that it’s very, very difficult to cite a new refinery in the U.S. Nobody wants a refinery in their backyard.” The public has accepted the locations of existing refineries, Weissgarber said. For that reason, expansion projects at those locations seem likely to face less resistance. “The public’s gotten used to them being there,” Weissgarber said. Increasing capacity through expansion costs far less than building from scratch, Weissgarber added. “The economics are such that it makes more sense to continue to expand the existing refineries. Some of these expansions are as large as the typical refinery used to be in the U.S.” Asked whether expansion would add capacity sufficient to meet growing U.S. demand, Weissgarber pointed out that Big Oil “is generating huge sums of cash. Everybody’s got capital projects either planned or already in progress. My perspective is that they’re going to add more capacity than what we’re going to see in the way of demand increases over the next three to five years.” A new refinery has not been built in the United States since 1976. Last year, President George W. Bush encouraged companies to build new oil refineries on old military bases to meet growing demand for gasoline and diesel, but so far none have planned to do so, Reuters reported in its coverage of the NPRA meeting. "We don't have any plans for a greenfield refinery in the U.S., primarily because we don't think there is a need for one," Tillerson told reporters at the meeting, according to Reuters. Tillerson said U.S. refiners should be able to maintain the average annual 2-percent expansion in crude oil refining capacity to keep up with demand. U.S. markets will also rely on imports, he said."We've been able to add 2 percent per year for the past 10 years and we would expect to continue to make those capacity additions," Tillerson said. "We still have a lot of potential for expansion in existing sites." A day earlier, the U.S. Energy Information Administration said U.S. fuel production capacity is expected to grow at about that rate in the remaining years of the decade as companies invest in expansion. EIA analyst Joanne Shore said an additional 1.7 million barrels per day of capacity was expected between 2005 and 2010 and that the burst of refining capacity could allow the United States to "keep up with demand growth for a while." Shore also said that historically refinery expansions tend to exceed the capacity additions originally planned. In the past year, U.S. refining companies have revealed plant expansion plans totaling more than a million barrels per day, adding to expansion projects already on the books, according to a Reuters survey. Experts have said, however, the planned expansions will not be enough to keep pace with demand growth, leaving the United States Refinery expansion inevitable Oil & Gas journal, 8 (Global crude capacity will rise nearly 11 million b/d by 2012, March 10, lexis) Despite the removal of some fore-cast capacity additions, North America remains a significant source of capacity growth. IEA forecasts that refiners will add 1.3 million b/d of crude distillation capacity through new projects during 2007-12. This forecast includes many large-scale expansion projects that IEA assumes will be approved in the next year. The most notable expansion is the Motiva Enterprises LLC (a Shell-Saudi Aramco joint venture) 325,000 b/d expansion of its Port Arthur, Tex., refinery. IEA did not include Chevron Corp.'s 200,000 b/d expansion of its Pascagoula, La., refinery because a final investment decision has not been made, suggesting it may not start operations before 2013. US crude distillation capacity will grow 1.1 million b/d between 2007 and 2012, according to IEA. The four largest projects, all due to start up in 2010-12, contribute 700,000 b/d. Of these projects IEA was only able to confirm that Marathon Oil Corp.'s 180,000 b/d Garyville, Ind., expansion received final investment approval, which indicates that the remaining 500,000 b/d of capacity may be delayed. Rising project costs have forced several refiners to defer, or scale back, expansion plans to meet capital budgets. IEA is also forecasting substantial investment in North American upgrading capacity (Fig. 4), mostly in new coking and hydrocracking units. North American refiners will continue to invest in substantial amounts of diesel, gasoline, and kerosine hydrotreating capacity through 2012. IEA expects more than 500,000 b/d of new coking capacity centered on refineries in Northern US states and Canada.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
9
Uniqueness—Refineries expanding Refineries will be expanded now. The White House 08 – (June, “Policy Memorandum: American Made Energy,” The Oil Drum, http://www.whitehouse.gov/news/releases/2008/06/20080618-9.html) There are 149 refineries in the U.S. today, refining approximately 15 million barrels of oil per day. While no new refineries have been built in the last 30-plus years, existing refineries have undergone extensive modifications to adapt to changes in demand, changes in crude oil inputs, changes in fuel outputs (e.g. gasoline vs. diesel), and costs. Over the last 10 years, total capacity increased 1.85 million barrels per day, the equivalent of adding 1 medium-sized refinery per year. These expansions all took place at existing facilities. A refinery expansion or modification requires multiple permits, and can be undertaken for several reasons, including: To increase production, for example by increasing crude oil capacity or improving the yield of certain products by adding a downstream unit process To produce different types of fuel (i.e. to change the product mix to more diesel relative to gasoline) To reduce costs, by improving reliability or switching to lower quality crude oils to comply with regulations requiring cleaner fuels and changing fuel specifications. Going forward, it is predicted that refineries will continue to need to undergo modification and expansion to meet evolving demand and evolving types of inputs. The Energy Information Administration predicts that overall future demand is expected to grow less than 0.5% per year and total capacity expansion is anticipated to flatten out starting in 2010. However, a shift in demand is predicted. Demand for petroleum-based gasoline is expected to decline by about 7% over the next 15 years while demand for diesel is expected to increase about 12% over the same time. There will also be a continued need for refinery modification to accommodate a changing mix in available crude oil. For example, refineries are and will be making investments to process the increasing quantities of heavy Canadian crude oil from tar sands. Successful completion of a refinery modification requires successful completion of the permitting processes, for example those required by the Clean Air Act and the Clean Water Act. There is no consolidated national permitting program because there are multiple Federal, state, and local permitting authorities and requirements. This leads to excessive and uncertain timeframes for permit reviews, and the potential for conflicting permitting requirements. Completing the permitting process can take 3 - 5 years. Permits that are approved may be the target of lawsuits. The protracted appeals process introduces additional timing uncertainty. Uncertainty and delay adds further strain on supply and can lead to increased costs to consumers
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
10
Uniqueness—Canadian imports now Fuel imports from Canada are set to grow. Financial Post 08[Claudia Cattaneo-Calgary Bureau Chief, Financial Post-“Canada, the world’s oil hot spot” June 04, http://www.financialpost.com/story.html?id=562833&p=2] HOUSTON - Americans may show little appreciation or awareness at times of Canada as their top energy supplier, but in this senior global oil-industry centre, Canada is hot. It's a big change in sentiment from a few years ago, when U. S. companies would rather cozy up to Russia or the Middle East than tough it out in the frozen north. Now, the size of the oilsands, the strong Canadian currency, even the emerging Horn River natural-gas play in northeast British Columbia, a lookalike of the fabulously successful Barnett Shale near Fort Worth, Tex., are big topics of conversation in this city's grand oil towers. Ed Stelmach and Danny Williams, premiers of oil-and gas-rich Alberta and Newfoundland, respectively, are well-known, and securing close relations with them has become a priority. Royalty policies are debated and compared. Curiosity about oilsands or East Coast offshore extraction technologies runs high. Energy Magazine, a Houston-based publication that covers the global energy scene, last month named Canada Country of the Year. Indeed, industry heavyweights such as Chevron Corp. would like a lot more Canada right now. "If you want me to put one word on it, it's 'enthusiastic,' " said Gary Luquette, Chevron vice-president and one of the highest-ranking executives for the company based in the city. "Chevron has targeted Canada as one of the areas where we really would like to grow." Part of the reason is that there is a greater understanding of the oilsands, what it takes to produce them, and the U. S market for Canadian oil, said Mr. Luquette, president of Chevron North America Exploration and Production Co. The San Ramon, Calif.-based oil supermajor was an early believer in the Northern Alberta deposits, as a partner in the Athabasca Oilsands Project run by Royal Dutch Shell PLC. Fuel imports from Canada are set to grow. Financial Post 08[Claudia Cattaneo-Calgary Bureau Chief, Financial Post-“Canada, the world’s oil hot spot” June 04, http://www.financialpost.com/story.html?id=562833&p=2] HOUSTON - Americans may show little appreciation or awareness at times of Canada as their top energy supplier, but in this senior global oil-industry centre, Canada is hot. It's a big change in sentiment from a few years ago, when U. S. companies would rather cozy up to Russia or the Middle East than tough it out in the frozen north. Now, the size of the oilsands, the strong Canadian currency, even the emerging Horn River natural-gas play in northeast British Columbia, a lookalike of the fabulously successful Barnett Shale near Fort Worth, Tex., are big topics of conversation in this city's grand oil towers. Ed Stelmach and Danny Williams, premiers of oil-and gas-rich Alberta and Newfoundland, respectively, are well-known, and securing close relations with them has become a priority. Royalty policies are debated and compared. Curiosity about oilsands or East Coast offshore extraction technologies runs high. Energy Magazine, a Houston-based publication that covers the global energy scene, last month named Canada Country of the Year. Indeed, industry heavyweights such as Chevron Corp. would like a lot more Canada right now. "If you want me to put one word on it, it's 'enthusiastic,' " said Gary Luquette, Chevron vice-president and one of the highest-ranking executives for the company based in the city. "Chevron has targeted Canada as one of the areas where we really would like to grow." Part of the reason is that there is a greater understanding of the oilsands, what it takes to produce them, and the U. S market for Canadian oil, said Mr. Luquette, president of Chevron North America Exploration and Production Co. The San Ramon, Calif.-based oil supermajor was an early believer in the Northern Alberta deposits, as a partner in the Athabasca Oilsands Project run by Royal Dutch Shell PLC.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
11
Uniqueness—Tar sand inevitable Canadian Tar Sand will inevitably be developed. Varteressian 08 – (Paul M. – a Canadian oil researcher, April, HVS Canada, Hotel Online, “Northern Alberta's Hotel Industry Fixed to the Sustainability and Performance of the Province's Oil and Natural Gas Industries,” http://www.hotelonline.com/News/PR2008_2nd/Apr08_Alberta.html) Perhaps the most certain piece of Alberta's oil equation is the growing demand for its conventional and unconventional oil supply. In North America, oil is a relatively inelastic consumer good as demand for it remains constant regardless of price. According to the CIAWorld Factbook, the United States currently consumes upwards of 21 million barrels of oil per day. Through the North American Free Trade Agreement and a royalty system that, despite the recent modest increase, remains lower than the world average for oil deposits of similar capacity, Canada has strategically aligned itself with the world's largest consumer of oil. Canada currently supplies 2 million barrels of crude oil daily to US consumers.12 The amount of Alberta and Canada's oil exports is expected to grow as the industry's upgrading, refining, and transportation infrastructure grows. Moreover, global demand for oil is expected to increase at an average annual rate of 2% for the next 30 years. In the future, Alberta's oil will continue to flow south to the US increasingly west to the Pacific Rim and China, the world's fastest growing economy and second largest consumer of oil. China currently consumes approximately 6.5 million barrels of oil per day. Alberta's role in world oil production continues to grow. Cheap oil is becoming harder to find, and soon the world's inhabitants will rely on "unconventional oil" for much of its energy. International oil companies like Exxon Mobil, Royal Dutch Shell, BP, and Total have invested massive amounts of capital into Alberta. This inevitable transition from light to heavy crude has transformed the economic and physical landscape of Northern Alberta forever. The lodging sector is one of Alberta's industries that has benefitted from robust oil activity. Over the past three years, the region's hotels have sheltered more white- and blue-collar workers than ever before. It is difficult to predict the strength of Canada's currency going forward or where the price of oil will be in one, two, or 20 years. What is relatively simple to assume is that as long as it is profitable to produce a barrel of oil in Alberta, the oil industry alone-and the hotel markets that shelter under it’s existencewill prosper well into the future. Transition to renewable is not inevitable – our oil addiction guarantees we will switch to tar sands The Nation, April 24, 2008 (Mark Hertsgaard, "Peak Oil: Running on Empty" http://dissentmag.wordpress.com/2008/05/18/peak-oil-running-on-empty/) At first glance, one might think that peak oil would help the fight against climate change. After all, less available oil should translate into less oil consumption and lower greenhouse gas emissions. But modern civilization, to borrow George W. Bush's term, is addicted to oil. If peak oil arrives before the addiction is treated, the junkie will seek even more dangerous ways to get his fix. Indeed, this is already happening. In Canada, energy companies are mining so-called tar sands–a mix of sand, water and heavy crude oil that can be refined into usable petroleum. But burning tar sands is about the worst thing to do if we want to avoid catastrophic climate change because the resulting petroleum has a much greater carbon footprint than conventional oil. Currently, a dozen such projects are under way; projects awaiting approval would quadruple the emissions those projects generate. One encouraging sign: in response to a lawsuit filed by Ecojustice, the top federal court in Canada has temporarily blocked a tar sands project proposed by an ExxonMobil subsidiary on climate change grounds. "This is something which will clearly apply to every single oil-sands project that comes before environmental assessment of any kind," said Sean Nixon, a lawyer for Ecojustice Canada.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
12
Uniqueness—Tar sand inevitable The US is increasing tar sand processing-3 new refineries are planned. Canada News Group 08 [“Report: U.S. Poised To Shift Most New Refining Capacity To Dirtier Tar Sands Oil Emitting Three Times More Global Warming Emissions In Extraction” http://www.newswire.ca/en/releases/archive/June2008/04/c8399.html, June 4] WASHINGTON and TORONTO, June 4 /CNW/ - Future oil refining in the U.S. may soon get much "dirtier" -- including three times more greenhouse gas emissions in the extraction process -- as refineries place their bets on a shift away from traditional crude oil to Canadian tar sands, according to a major new report issued today by the independent Environmental Integrity Project (EIP). The Washington, D.C. EIP released its new report today in conjunction with Toronto-headquartered Environmental Defence Canada (EDC). Titled "Tar Sands: Feeding U.S. Refinery Expansions With Dirty Fuel," the report notes: Two thirds -- 1.1 million barrels per day (bpd) - of the currently proposed increase in U.S. refining capacity of 1.6 million bpd would come from refining heavier, dirtier crude oil from Canadian tar sands. At the same time, more than 800,000 bpd of existing U.S. conventional crude capacity is proposed to be converted to processing oil from tar sands, so that conventional crude refining capacity is expected to undergo a net decrease of over 300,000 bpd, and the total net increase in refining capacity to come from tar sands would be over 1.9 million bpd. Since the average capacity of an oil refinery in the United States is 116,395 bpd, the contemplated 1.9 million bpd of increased tar sand capacity would be equivalent to constructing more than sixteen new refineries dedicated to tar sands. Increased tar sand refinery capacity is contemplated in Illinois and Texas (495,000 bpd together); Indiana (205,000 bpd); Louisiana (180,000 bpd); Michigan (15,000 bpd); Montana (13,000 bpd); North Dakota (65,000 bpd); Ohio (316,120 bpd); Oklahoma (44,700 bpd); South Dakota (400,000 bpd); and Wisconsin (200,000 bpd). Eric Schaeffer, director, Environmental Integrity Project, said: "It is hard to imagine what else it is that the U.S. oil industry could do to go backwards further and faster than to rely on Canadian tar sands or similar resources in the United States. Not only would this mean significantly more pollution overall, but it would substantially boost the greenhouse gas emissions linked to global warming. The U.S. government needs to get more involved in this situation to ensure that we do not end up with an environmental setback of truly staggering proportions." Matt Price, project manager for Alberta/BC Energy and Climate and contributor to the new report, Environmental Defence Canada, said: "The tar sands project is the most destructive project on Earth. Nowhere else are we talking about ripping up an area the size of Florida, creating massive toxic lakes you can see from space with the naked eye, and giving off three times the greenhouse gas emissions to produce oil when compared with
Although a new oil refinery has not been built in the U.S. for over 30 years, five new refineries are currently under consideration, three of which would process tar sand oil (two in North Dakota and one in South Dakota), and one of which would process oil from U.S. oil shale deposits (North Dakota), which may be as destructive to mine and as dirty to refine as tar sand oil. conventional crude."
Canadian Tar Sand will inevitably be developed. Varteressian 08 – (Paul M. – a Canadian oil researcher, April, HVS Canada, Hotel Online, “Northern Alberta's Hotel Industry Fixed to the Sustainability and Performance of the Province's Oil and Natural Gas Industries,” http://www.hotelonline.com/News/PR2008_2nd/Apr08_Alberta.html) Perhaps the most certain piece of Alberta's oil equation is the growing demand for its conventional and unconventional oil supply. In North America, oil is a relatively inelastic consumer good as demand for it remains constant regardless of price. According to the CIAWorld Factbook, the United States currently consumes upwards of 21 million barrels of oil per day. Through the North American Free Trade Agreement and a royalty system that, despite the recent modest increase, remains lower than the world average for oil deposits of similar capacity, Canada has strategically aligned itself with the world's largest consumer of oil. Canada currently supplies 2 million barrels of crude oil daily to US consumers.12 The amount of Alberta and Canada's oil exports is expected to grow as the industry's upgrading, refining, and transportation infrastructure grows. Moreover, global demand for oil is expected to increase at an average annual rate of 2% for the next 30 years. In the future, Alberta's oil will continue to flow south to the US increasingly west to the Pacific Rim and China, the world's fastest growing economy and second largest consumer of oil. China currently consumes approximately 6.5 million barrels of oil per day. Alberta's role in world oil production continues to grow. Cheap oil is becoming harder to find, and soon the world's inhabitants will rely on "unconventional oil" for much of its energy. International oil companies like Exxon Mobil, Royal Dutch Shell, BP, and Total have invested massive amounts of capital into Alberta. This inevitable transition from light to heavy crude has transformed the economic and physical landscape of Northern Alberta forever. The lodging sector is one of Alberta's industries that has benefitted from robust oil activity. Over the past three years, the region's hotels have sheltered more white- and blue-collar workers than ever before. It is difficult to predict the strength of Canada's currency going forward or where the price of oil will be in one, two, or 20 years. What is relatively simple to assume is that as long as it is profitable to produce a barrel of oil in Alberta, the oil industry alone-and the hotel markets that shelter under it’s existencewill prosper well into the future.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
13
Uniqueness—investments now Growth of Canadian oil production is triggering a wave of refinery investments. Wilcox, 2008 (Mike, global head of downstream oil consulting for Wood Mackenzie, “Alberta oil sands triggers investment wave”, June 9, lexis) The projected growth of Alberta oil sands production, which has in place some 1.75 trillion bbl of resources, is triggering a wave of investments, said Wood Mackenzie Ltd., Pipeline companies and refiners plan to invest more than $31 billion by 2015 to export and distribute oil sands products and to process them in the US refining system, based on disclosed project costs. That's not counting investments in internal pipelines in Alberta, the Canadian refining and upgrading system, or undisclosed refining investment, officials said. "Overall planned investments are well positioned to ensure sufficient pipeline and refinery capacity to 2015, but any delays to key pipeline projects could result in significant bottlenecks," warned Lindsay Sword, global refinery research manager for Wood Mackenzie.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
14
Refineries on the brink Refineries are on the brink now due to newly implemented renewable fuel standards—further investments in alternative energy will drive them over the edge Drevna, 08 - President National Petrochemical and Refiners Association (Charles, CAPITOL HILL HEARING TESTIMONY, 5/6, CQ Congressional Testimony, lexis) At this point, it is still too early to evaluate this program. However, NPRA believes that the implementation of the RFS program is off to a good start. It is worthy to note, however, that the refining industry will have, over the first two years of the program, surpassed the statutory minimums for blending of renewables. It is further anticipated that refiners will continue to exceed the minimum requirements over the next several years. We believe this affirms our stated position that mandates are unnecessary and that a fuel supply, transportation and distribution system based on free market principles should be the option of choice. Oil refineries are being invested in now but we’re on the brink Chapman, 5 [Gary, Regularo Contributor to the Austin American-Statesman, “The 'peak oil' problem: It should concern us all”—4/29, Lexis] The price of oil is not only pinching consumers at the pump, it's beginning to put pressure on politicians. On Monday, President Bush walked hand-in-hand with his friend Crown Prince Abdullah of Saudi Arabia, in an attempt to convey that the White House has at least noticed gas prices well above $2 a gallon. Then on Wednesday, Bush began outlining his energy plan, which includes a lot more nuclear power plants and possibly using decommissioned military bases as sites for new oil refineries. On the same day that Bush and Abdullah met in Crawford, energy executives and experts assembled in Edinburgh, Scotland, to talk about the long-term prospects for oil in the global economy. Matthew Simmons, a U.S. investment banker, told the conference: "Demand is pulling away from supply . . . and we have to ask whether we have the resources that we think we do. It could be catastrophic if we do not anticipate when peak oil comes." The concept of "peak oil" is beginning to rattle and even terrify energy experts and policy-makers. It refers to the point -- exactly when, no one knows for certain -when the world will have reached its peak of oil production and when production will start a slow, inexorable slide to zero. No one doubts this will happen; the question is when. The price of oil in the past has fluctuated because of changes in supply and demand. But today, as Simmons noted, demand is stressing global oil production, and there is essentially no slack. This means the current price of a barrel of oil, about $55 -- which is $20 more than a year ago -- is likely to be just the beginning of a permanent rise. The world's oil producers already have admitted that they no longer control the price, as they once did. The production system is running at about 98 percent of capacity, and it is stressed at 95 percent, according to the dean of energy analysts, Charles T. Maxwell.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
15
Refineries on the brink Refineries are near the breaking point, forcing dependence on foreign oil. Saefong 04 – (Myra P - reporter for CBS.MarketWatch.com in San Francisco., CBS.MarketWatch.com, “U.S. refineries near breaking point: Output hike not an option to combat record gas prices,” http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B474AD4EC-68D0-477B-8CD5F0A29DB871C0%7D&siteid=mktw) U.S. refineries already are near a breaking point, running at around 90 percent of capacity or higher over the past year. Throw in a strong summer-driving season or a refinery or two closing for emergency repairs and you have the makings of a disaster for consumers and suppliers alike. "No new (U.S.) refineries have been built in decades," said Kevin Kerr, editor of newsletter Kwest Market Edge. The facilities that do exist are "aging and pushed to the limit," he said, calling them the "Mir Space Station of the energy business." A survey released Sunday found the average price of all grades of gas nationwide reach a record $1.77 a gallon Friday. The Lundberg Survey noted the average price is up almost 26 cents since Jan. 1. Analyst Trilby Lundberg said the spike reflects a rise in crude-oil prices and increased refinery work to prepare for higher spring and summer demand. She doesn't expect prices to rise much further. Yet other analysts say domestic refineries can't keep up with gasoline demand as it is, forcing the U.S. to import more fuel to cover its supply deficit. As much as 10 percent of the nation's gasoline need was supplied from offshore last year, according to Geoff Sundstrom, a spokesman for AAA, North America's motoring and leisure-travel organization. The U.S. imported almost 10 million barrels of crude a day in the week ended March 5, which isn't enough to meet rising demand. It's the ability to refine that oil into usable products that's a bigger issue, analysts said. "Forget the disaster that is the crude-supply problem," Kerr said. "Without a functioning refinery system in place, the whole chain breaks down. You can have all the crude in the world and no way to refine it, and all you have is a lot of crude."Doing the math Analyzing the supply-and-demand equation for the coming summer, Tom Kloza, chief oil analyst at the Oil Price Information Service, sees serious risk of market instability. Domestic gasoline production averaged 8.7 million barrels per day last summer, he said, and gasoline imports comprised 750,000 barrels per day or so. When gasoline imports declined to around 500,000 barrels per day, the market ran into trouble, Kloza said. Looking at this summer's likely scenario, he predicts the market will see gasoline demand of 9.3 million barrels a day. Given present domestic output and import levels, the market will probably use about 100,000 barrels a day more gasoline than it's bringing to the market, Kloza said. Just a 1 percent or 2 percent change in demand can have "dramatic effects" on the whole system, he said. "The homeostasis of the gasoline business in the driving season is quite delicate." Refinery constraints Charles Perry, chairman of energy consulting firm Perry Management, issued a fairly accurate assessment of today's refinery situation nearly four years ago, warning of the potential for a "refinery and distribution crisis." In a recent interview, Perry said, "The availability of [oil] products in the market has just gotten a lot tighter."
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
16
Refineries on the brink Refineries are near the breaking point, forcing dependence on foreign oil. Saefong 04 – (Myra P - reporter for CBS.MarketWatch.com in San Francisco., CBS.MarketWatch.com, “U.S. refineries near breaking point: Output hike not an option to combat record gas prices,” http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B474AD4EC-68D0-477B-8CD5F0A29DB871C0%7D&siteid=mktw) U.S. refineries already are near a breaking point, running at around 90 percent of capacity or higher over the past year. Throw in a strong summer-driving season or a refinery or two closing for emergency repairs and you have the makings of a disaster for consumers and suppliers alike. "No new (U.S.) refineries have been built in decades," said Kevin Kerr, editor of newsletter Kwest Market Edge. The facilities that do exist are "aging and pushed to the limit," he said, calling them the "Mir Space Station of the energy business." A survey released Sunday found the average price of all grades of gas nationwide reach a record $1.77 a gallon Friday. The Lundberg Survey noted the average price is up almost 26 cents since Jan. 1. Analyst Trilby Lundberg said the spike reflects a rise in crude-oil prices and increased refinery work to prepare for higher spring and summer demand. She doesn't expect prices to rise much further. Yet other analysts say domestic refineries can't keep up with gasoline demand as it is, forcing the U.S. to import more fuel to cover its supply deficit. As much as 10 percent of the nation's gasoline need was supplied from offshore last year, according to Geoff Sundstrom, a spokesman for AAA, North America's motoring and leisure-travel organization. The U.S. imported almost 10 million barrels of crude a day in the week ended March 5, which isn't enough to meet rising demand. It's the ability to refine that oil into usable products that's a bigger issue, analysts said. "Forget the disaster that is the crude-supply problem," Kerr said. "Without a functioning refinery system in place, the whole chain breaks down. You can have all the crude in the world and no way to refine it, and all you have is a lot of crude."Doing the math Analyzing the supply-and-demand equation for the coming summer, Tom Kloza, chief oil analyst at the Oil Price Information Service, sees serious risk of market instability. Domestic gasoline production averaged 8.7 million barrels per day last summer, he said, and gasoline imports comprised 750,000 barrels per day or so. When gasoline imports declined to around 500,000 barrels per day, the market ran into trouble, Kloza said. Looking at this summer's likely scenario, he predicts the market will see gasoline demand of 9.3 million barrels a day. Given present domestic output and import levels, the market will probably use about 100,000 barrels a day more gasoline than it's bringing to the market, Kloza said. Just a 1 percent or 2 percent change in demand can have "dramatic effects" on the whole system, he said. "The homeostasis of the gasoline business in the driving season is quite delicate." Refinery constraints Charles Perry, chairman of energy consulting firm Perry Management, issued a fairly accurate assessment of today's refinery situation nearly four years ago, warning of the potential for a "refinery and distribution crisis." In a recent interview, Perry said, "The availability of [oil] products in the market has just gotten a lot tighter." Most U.S. refinery construction now is on desulfurization equipment mandated for lower sulfur requirements for gasoline and diesel -- and none of it adds refining capacity, he said. About 177,000 barrels of refining capacity were added worldwide in 2003, Perry said, citing an Oil and Gas Journal survey. "That's on an 82 million-barrel base, so it added two-tenths of a percent." No new refineries have been built in the U.S. in 25 to 30 years, he said, and smaller ones that mostly produced 100,000 barrels a day or less are being shutdown. Shell (UK:SHEL: news, chart, profile) plans to close a 70,000-barrel-a-day Bakersfield, Calif. refinery in October."For a refinery to be feasible nowadays, it needs to be a minimum of 250,000 barrels per day and located over a deepwater port," Perry said. Those that do run make a total of 15 million barrels a day on average, and that figure drops by around 10 percent during any maintenance or turnarounds, which involve a production switch to a different fuel output. Expansion beyond adding desulphurization equipment is out of the question right not, Perry said. Refiners are "going to have to direct a lot of their capital to desulphurization," he said, at least through 2008.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
17
Renewables Inevitable/Free market better Allowing the free market to bring about renewables is comparatively better than a mandate—the status quo solves the aff and there’s only a risk of an external impact Taylor, 1 – Jerry, Director of Natural Resource Studies at the Cato Institute, “Free market trumps policy,” – July 17, 2001, USA Today and Cato.org The Bush administration hits the road this week to make the case that "we" need to produce more energy, that "we" need to conserve energy and that "we" need to invest more in nuclear power, clean coal and renewable fuels. A question: Who's this "we"? High prices in oil, natural gas and electricity in the West signaled to any who would pay attention that those commodities were in scarce supply. Consumers responded by cutting back on energy. Industry responded by investing in new supply -- not out of kindness, of course, but in a bid to get their share of the spectacular profits available in the energy business. And what do you know? Energy prices collapsed across the board. Free markets, not government programs, achieved all of that in a matter of months. "We" didn't need a government energy plan then, and "we" don't need one now. High prices, while politically unpopular, are the only sure ways to encourage conservation and new supply. The best energy plan is to let markets work and get the government out of the way. Sure, there may still be bumps on the road ahead, but government's record at smoothing out those energy-market bumps is abysmal indeed. Unregulated renewable investment is inevitable and better than regulation Taylor, 97 – Jerry, director of natural resource studies at Cato, “A Freer Market for Electricity Would Lower Energy Costs, Half Measures Fall Short” San Diego Union Tribune, 2/2/1997, The Cato Institute Simply put, there are no longer significant economies of scale in the electricity business. Spot and futures markets for electricity have eroded any lingering monopoly. Advances in micro-turbine technology have made self-generation a viable alternative to the grid and threaten to render central station power generation obsolete. Finally, as long as markets are theoretically contestable, monopolists invariably price as if competition were a present reality (that is the reason, incidentally, that Wal-Mart doesn't jack up prices once its competitors are neutralized; it doesn't want to tempt others into the market). Managed competition not only prevents California from achieving the kind of rate reductions and service vitality that free markets in electricity would deliver, but it also threatens a second bailout of the electricity industry in a decade or so. That's because it's aimed at creating and protecting a new market structure -- publicly controlled transmission and distribution of centrally dispatched power -- that is being rendered obsolete by market forces that no regulatory body can ultimately control. As Trigen Energy CEO Thomas Casten notes, "Central dispatch generation . . . is finished as an economically viable technology. In its place, widespread installation of smaller, more efficient generation, close to heat loads, will come to predominate and will collapse the value of much of today's generation -- and transmission -- assets." The best answer to these dilemmas is for the state to simply let go of the industry. No ratepayer bailout for utility losses. No public seizure of the grid. No more expensive subsidies. Simply tear down the laws protecting utilities from competition and let businesses have at it. If the state Legislature can't quite bring itself to trust the marketplace, let it turn the California Public Utility Commission into a specialized antitrust board to serve as a court of first resort for complaints about anti-competitive behavior in the industry. If the last several decades have taught us anything, it is that the best regulator of markets is dynamic, free and open competition. That such competition exists in electricity service is staring the industry in the face.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
18
Renewables Inevitable The market will inevitably force renewables on consumers—the only question is whether or not the aff mandates them States News Service, 8: PRESS CONFERENCE ON GLOBAL PRIVATE INVESTMENTS AND CLIMATE CHANGE, 6/9, Lexis On the current energy crisis, Assembly President Kerim said that, while soaring oil prices were affecting society at all levels -- food prices, transport costs, agriculture, material costs, among others -- it also stimulated thinking about alternative energy sources. Renewable energy now accounted for about 14 per cent of energy use, so there was a lot of potential for bolder steps, especially in wind and solar energy, and in the provision of jobs. He said that investing in that sector would lead to a host of economically viable solutions because, at the end of the day, people would realize that renewable energy could handle the same tasks cheaper and more efficiently, while also create new jobs. Ms. Lubber added that high oil prices would also force changes in consumption patterns as people started buying smaller cars and sought out clean energy products and solutions.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
19
Renewables fail Renewables are not the answer to the energy crisis Mortished 07 – (Carl – World Business Editor, June 25, The Austrailian, “Energy crisis 'cannot be solved by renewables', http://www.theaustralian.news.com.au/story/0,20867,21962585-30417,00.html) THE world is blinding itself to the reality of its energy problems, ignoring the scale of growth in demand from developing countries and placing too much faith in renewable sources of power, according to two leaders of the global energy industry. The chief executive of Royal Dutch Shell today calls for a “reality check”. Writing in The Times, Jeroen van der Veer takes issue with the widespread public opinion that green energy can replace fossil fuels. Shell’s chief gives warning that supplies of conventional oil and gas will struggle to keep pace with rising energy demand and he calls for greater investment in energy efficiency. Instead of a great conversion to wind power and solar power, Mr van der Veer predicts, the world will be forced into greater use of coal and much higher CO2 emissions, “possibly to levels we deem unacceptable”. Alternative energy sources, such as renewables, will not fill the gap, says Mr van der Veer, who forecasts that even with major technological breakthroughs, renewables could account for only 30 per cent of energy supply by the middle of the century. “Contrary to public perceptions, renewable energy is not the silver bullet that will soon solve all our problems,” he writes. The warning from Royal Dutch Shell coincides with a critique of public energy policy by Rex Tillerson, the chief executive of ExxonMobil. Speaking at the Royal Institute for International Affairs in London, Mr Tillerson pointed to a widespread failure by policymakers to understand the extent to which the aspirations of people in developing countries are fuelling growth in demand for energy. Mr Tillerson said that world energy demand would rise by 45 per cent by 2030, and fossil fuels – oil, natural gas and coal – were the only energy sources of sufficient size, adaptability and affordability to meet the world’s needs. Mr van der Veer casts doubt today on the oil and gas industry’s ability to keep up with accelerating demand. “Just when energy demand is surging, many of the world’s conventional oilfields are going into decline,” he writes. Although there is no shortage of oil and gas in the ground, Mr van der Veer says, the industry currently lacks the technology to recover even half of that resource. Mr Tillerson, speaking at Chatham House, expressed doubts about the oil industry’s ability to raise its game significantly without access to the oil reserves of the Opec countries of the Middle East. “The supply outlook for nonOpec countries will be modestly up or flat,” Mr Tillerson predicted. He was sceptical about the drive by governments to increase use of biofuels and said that a fifth of the US’s corn crop was being used to produce four billion gallons of ethanol, compared with targets of 12 billion gallons by 2012. The ExxonMobil chief criticised the EU’s carbon trading system, calling it an administratively complex system that lacked transparency and failed to deliver a uniform and predictable cost of carbon. “It’s all about moving the money around,” he said. Mr Tillerson said he would prefer a carbon tax that would enable the cost of carbon to spread through the economy in a uniform way, letting governments use the revenues to mitigate its effect by reducing employment or income taxes.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
20
Link—High demand KT refinery investment Refinery expansion is increasing now to deal with greater demand States News Service, 8 – “POLICY MEMORANDUM: AMERICAN MADE ENERGY” 6/18 Lexis Congress should pass legislation authorizing oil and gas development in the 10-02 area of ANWR. 4. REFINERIES Background There are 149 refineries in the U.S. today, refining approximately 15 million barrels of oil per day. While no new refineries have been built in the last 30-plus years, existing refineries have undergone extensive modifications to adapt to changes in demand, changes in crude oil inputs, changes in fuel outputs (e.g. gasoline vs. diesel), and costs. Over the last 10 years, total capacity increased 1.85 million barrels per day, the equivalent of adding 1 medium-sized refinery per year. These expansions all took place at existing facilities. A refinery expansion or modification requires multiple permits, and can be undertaken for several reasons, including: To increase production, for example by increasing crude oil capacity or improving the yield of certain products by adding a downstream unit process To produce different types of fuel (i.e. to change the product mix to more diesel relative to gasoline) To reduce costs, by improving reliability or switching to lower quality crude oils To comply with regulations requiring cleaner fuels and changing fuel specifications. Going forward, it is predicted that refineries will continue to need to undergo modification and expansion to meet evolving demand and evolving types of inputs. The Energy Information Administration predicts that overall future demand is expected to grow less than 0.5% per year and total capacity expansion is anticipated to flatten out starting in 2010. However, a shift in demand is predicted. Demand for petroleum-based gasoline is expected to decline by about 7% over the next 15 years while demand for diesel is expected to increase about 12% over the same time. There will also be a continued need for refinery modification to accommodate a changing mix in available crude oil. For example, refineries are and will be making investments to process the increasing quantities of heavy Canadian crude oil from tar sands.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
21
Link—High demand KT refinery investment Refineries are at maximum capacity—they will invest in new plants only if they believe that demand will stay high. Analyst Wire, 04 (Nightly Business Report, June 21, lexis). EASTABROOK: U.S. refiners blame decades of tougher environmental regulations for creating what they call a serious capacity crunch. In 1980 there were 325 refineries nationwide. Today there are fewer than half that number. Many plants have been mothballed because upgrading them to meet tighter government standards would have been too expensive. Refiners have compensated for the lost plants by expanding some existing ones. But they say those refineries are straining to meet consumers growing demand for gasoline. BOB SLAUGHTER, PRES., NATL. PETROCHEMICAL & REFINERS ASSN.: We re in a situation where the U.S. refining capacity has declined by 10 percent over the last 20 years while the U.S. demand for petroleum products has increased by over 20 percent. Obviously that s a trend that can t continue. And the answer is we need more refining capacity. EASTABROOK: Refiners also argue the U.S. infrastructure is so stretched right now that any sort of disruption could potentially cause shortages and price spikes. Just a few years ago a fire broke out at this Citgo plant, crippling it for nine months. And during that time its output was cut in half. Building new refineries would help ease the current crunch. But analysts estimate it would take 10 years and about a billion dollars to build one new plant. They say that s an investment most refiners won t make. SEAN SEXTON, ENERGY ANALYST, FITCH RATINGS: It s really a fine line between their return on capital and how much capacity is in the industry. And I don t think you ll see many companies investing in growth projects to increase capacity unless they re confident there s really going to be a really consistent demand for that increased capacity going forward. Oil demand drives refining industry growth and oil company investment. Schoen 2004 [John, Senior Producer, MSNBC, “US refiners stretch to meet demand,” November 22] The forest of oil refining towers on this sprawling industrial complex on Galveston Bay sits in the heart of the greatest concentration of refining capacity in the world. Roughly half of the gasoline consumed in the U.S. is made along this stretch of Gulf coast from Corpus Christi, Texas to New Orleans. At the Valero refinery here, miles of pipe snake through the complex in a maze of loops and neat, right-angle turns that surround and connect the towers. This refinery processes nearly a quarter of a million barrels of crude oil every day. And general manager Ralph Phillip is always looking for ways to squeeze a little more through those pipes. “Over time, if you’re a good businessman, you say: ‘Okay, I’ve got this facility, and I’m making 160,000 barrels a day,” he said on a recent tour. “’If can make 170,000, it’s worth this much money. Where do I go do that — if I can find that bottleneck in my refinery and spend some money to fix that?’” Fixing those bottlenecks is more important than ever as the U.S. gasoline market winds down from a summer of record breaking prices — as ever-growing demand reached the limits of the country’s refining capacity. As tight inventories and fears of supply interruptions sent prices soaring this spring, U.S. refiners stepped on the gas pedal. “We had such great prices and great (profit) margins for refiners that they ran as hard as they could in the second quarter and produced tremendous amount of product — one of the strongest quarters ever, if not the strongest,” said Jacques Rousseau, an analyst who follows the refining industry at Friedman, Billings, Ramsey. But even as the peak summer driving season winds down, U.S. refiners continue to operate nearly flat out. As of this week, the industry is producing gasoline and other end products at something like 98 percent of capacity. And with the overall growth in demand for motor fuels and heating oil showing no signs of slowing, prices will continue to be driven as much by tight refining capacity as by the recent run-up in crude prices. Investments in alternative energy only occur because of high demand—reducing demand will change it CityWire, 8 – “Global Themed Investments Part Five: Switched on to long-term energy returns” 6/8, Lexis One offshoot of high oil and gas prices and problems with bringing new reserves online is the growth of interest in nuclear power. Only 6% of the world energy supply comes from nuclear power, but Wheaton says this has to rise. Wheaton says investability is low due to heavy government ownership and the price of uranium, a classic nuclear play, slumped last year. But he points to miner Kazatomprom, which also makes fuel assemblies for reactors and processor Cameco as attractive ways to gain exposure to this trend. This may sit uneasily with green investors, but nuclear will have to be in the energy mix if we are to fulfil expected demand growth, Wheaton says.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
22
Link—High demand KT refinery expansion Increased oil demand is key to refinery expansion Oil & Gas journal, 8 (Global crude capacity will rise nearly 11 million b/d by 2012, March 10, lexis) Global crude distillation capacity will increase 10.6 million b/d during 2007-12--9.1 million b/d of new capacity and 1.5 million b/d of capacity creep--according to a report from the International Energy Agency (IEA) entitled "Medium-Term Oil Market Report." The expansion in refining capacity will be in response to an increase in oil demand of 9.6 million b/d by 2012. IEA feels that investment in sophisticated refinery capacity is continuing and it foresees significant improvement in refinery flexibility despite project inflation and slippage similar to that seen in the upstream sector. Current refinery investment should increase refiners' ability to process heavy, sour OPEC spare capacity that was of little interest to them during the past few years, IEA feels. Refiners will be able to upgrade more fuel oil into lighter transportation fuels, which should improve their ability to meet demand growth in gasoline and diesel. But this will affect prices and price differentials.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
23
Link—Renewables Federal renewables legislation would undermine investment in refineries. Campoy 08 – (Ana - , June 12, The Wall Street Journal, “Refiners Face Obstacles to Processing Cheaper, Dirtier Crude Oil,” http://online.wsj.com/article/SB121322847813566247.html?mod=googlenews_wsj Refiners say limits on greenhouse-gas emissions being developed by the federal government also could throw a wrench into their plans to use heavier crudes, particularly crude from Canadian tar sands. Among the biggest threats: potential laws that would penalize fuels derived from heavier, more carbon-intensive sources. Refiners say such rules don't make sense at a time when the government is pushing to minimize demand for Mideast oil. "We have all these facilities that we, as domestic refiners, have spent billions of dollars upgrading so we can run Canadian crude, and then [the government] is going to turn around and say there's going to be a significant penalty in using those?" says Charles Drevna, president of the National Petrochemical and Refiners Association, an industry group. "And in the meantime, everyone's complaining about the price of a gallon of gas." While processing heavy crude makes economic sense, breaking down thick, sticky crude into light fuels such as gasoline or diesel requires more energy, which means more greenhouse-gas emissions, says Thomas O'Connor, senior manager at ICF International, a consulting-services company. In Richmond, Chevron wants to upgrade its refinery to be able to process higher-sulfur crude, among other reasons. In the past, regulators have mostly stuck to restricting what comes out of the refinery, not what goes in. But Richmond's planning commission, which is vetting the project, is siding with activists who complained about the environmental impact of the dirtier fuel.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
24
Link—LCFS Low carbon fuel standards cut off importation of oil sands and tank the Canadian economy—it is a key issue in our relationship. Alberts, 6-24 (Sheldon, 2008, Washington correspondent for the National Post. “Obama's fight against 'dirty oil' could hurt oil sands” http://www.nationalpost.com/most_popular/story.html?id=610810) Barack Obama on Tuesday vowed he would break America's addiction to "dirty, dwindling, and dangerously expensive" oil if he is elected U.S. president -- and one of his first targets might well be Canada's oil sands. A senior adviser to Mr. Obama's campaign told reporters it's an "open question" whether oil produced from northern Alberta's oilsands fits with the Democratic candidate's plan to shift the U.S. sharply away from consumption of carbon-intensive fossil fuels. "If it turns out that those technologies don't advance . . . and the only way to produce those resources would be at a significant penalty to climate change, then we don't believe that those resources are going to be part of the long-term, are going to play a growing role in the long-term future," said Jason Grumet, Mr. Obama's senior energy adviser. The remarks amount to a shot across the bow of Alberta's oil sands industry, which is planning to boost production from 1.3 million barrels a day to 3.5 million barrels over the next decade. The industry has come under sustained attack from U.S. environmentalists over the past year because the production of its heavy oil emits an estimated three times more greenhouse gases than conventional oil. Mr. Obama has cast himself as a champion of green energy during his White House campaign, proposing a national low-carbon fuel standard that would reduce greenhouse gas emissions by 180 million metric tons by 2020. He has also promised to invest $150-billion in developing alternative energy, and to reduce American dependence on foreign oil by 35% by 2030. "The possibilities of renewable energy are limitless," Mr. Obama said in an energy policy speech Tuesday in Las Vegas. "We've heard promises about it in every State of the Union [speech] for the last three decades. But each and every year, we become more, not less, addicted to oil -- a 19th-century fossil fuel that is dirty, dwindling, and dangerously expensive." In a campaign conference call held Monday in advance of Mr. Obama's speech, the Illinois senator's top advisers were asked what impact his energy plan might have on U.S. imports from Canada's oil sands. There is "a lot of technological development underway" to reduce the carbon footprint of oil sands production, Mr. Grumet said, but there continues to be "unacceptably high carbon emissions" associated with production of the fuel. "The amount of energy that you have to use to get that oil out of the ground is such that it actually creates a much greater impact on climate change, as well as using much more energy than even traditional petroleum," he said. Mr. Obama is committed to supporting energy sources that help slow climate change if elected -- and he will reward industries that meet tough new greenhouse gas standards, Mr. Grumet said. "It's a meritocracy. We are going to support resources that diversify petroleum supplies, that bring more production to this hemisphere, and that meet our long-term obligations to reduce greenhouse gas emissions," he said. "And I think it's an open question as to whether or not the Canadian resources are going to meet those tests." Senator John McCain, the Republican presidential candidate, has also vowed to support alternative energy and reduce U.S. dependence on foreign oil. Mr. McCain has placed more emphasis, however, on the need to lower American reliance on oil from the Middle East and countries like Nigeria and Venezuela. "America imports about one-third of its oil from Canada and Mexico and no one need worry about a reliance on friendly, stable neighbours, and partners
Christopher Sands, a Canada-U.S. relations expert at the Washington-based Hudson Institute, said Mr. Obama's energy policy could pose as big a challenge to the Canadian economy as his vow to renegotiate the North American Free Trade Agreement. "What he wants to do, clearly, is to eliminate oil sources like the oil sands. He is very aware of them and the process that's generating them," Mr. Sands said. "That is a threat to the oilsands and [Canada] has to take this much more seriously." Canada is the largest supplier of oil and gas to the U.S. and Ottawa has spent several years -- particularly since the 9-11 terrorist attacks -- promoting the country as a safe and secure source of energy for the American market. in NAFTA," Mr. McCain said in a speech Monday in Fresno, Calif.
Cap and trade and LCFS trade off with processing of Canadian crude Chicago Tribune 08 [Michael Hawthorne-Tribune Reporter, “Midwest Projects Would Increase Emission Up to 40%, February 12, http://www.chicagotribune.com/news/local/chi-greenhouse_12feb12,0,6312287.story] With oil prices soaring, many leading climate scientists and environmental groups are calling for action that would offset the financial incentives to process heavy Canadian crude. They want a national policy that takes the price of carbon emissions into account."If carbon isn't considered in these huge investments, we are going to be stuck with a tremendous burden," said Henry Henderson, a former Chicago environment commissioner who now heads the Natural Resources Defense Council's Midwest office. A cap-and-trade system is one way to do that. Another is setting standards that require greater reliance on low-carbon fuels. A California initiative considers all greenhouse gases produced during fuel production, from pollution released as oil is pumped from the ground to the exhaust from tailpipes. A national version of that standard would mean oil companies could still make fuels derived from the oil sands, but they would have to balance the higher emissions with lowercarbon products, said Alex Farrell, a professor at the University of California at Berkeley.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
25
Link—LCFS A national LCFS would increase oil dependence by restricting Canadian oil The Washington Times 2008 (Stephen Dinan, June 20, “McCain oil plan fosters reliance on Middle East; U.S., Canadian sources ‘dirty’, Lexis) The presumed Republican presidential nominee called last year to expand California's low carbon fuel standard, which measures the amount of greenhouse gases needed to produce fuel and punishes use of "dirty" heavy crude oil in favor of conventional light crude or alternative fuels. Expanding that plan nationwide would force U.S. refiners to buy less American and Canadian oil - which come increasingly from dirty sources like shale and tar sands - and instead use more oil from the Middle East. "We are likely to increase our dependence on just those very countries we all worry about," said William Koetzle, senior vice president of public policy at the Institute for Energy Research, a think tank that promotes free-market solutions. "If you create disincentives for the use of Canadian oil, it'll have to be replaced with oil from another place, and that probably means oil from OPEC."
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
26
Link—LCFS LCFS discourages the switch to Canadian oil shales and tar sands and forces mid-East dependence. Washington Post 08 (Stephen Dinan “McCain Oil Plan Relies on Middle East”, June 20 http://www.washtimes.com/news/2008/jun/20/mccain-oil-plan-fosters-reliance-on-middle-east/?page=2) Sen. John McCain caps his weeklong push for U.S. energy independence with a trip Friday to Canada, but his own environmental plan discourages use of Canadian oil and drastically increases American reliance on oil from the Middle East and other potentially unfriendly places. The presumed Republican presidential nominee called last year to expand California's low carbon fuel standard, which measures the amount of greenhouse gases needed to produce fuel and punishes use of "dirty" heavy crude oil in favor of conventional light crude or alternative fuels. Expanding that plan nationwide would force U.S. refiners to buy less American and Canadian oil - which come increasingly from dirty sources like shale and tar sands - and instead use more oil from the Middle East. "We are likely to increase our dependence on just those very countries we all worry about," said William Koetzle, senior vice president of public policy at the Institute for Energy Research, a think tank that promotes free-market solutions. "If you create disincentives for the use of Canadian oil, it'll have to be replaced with oil from another place, and that probably means oil from OPEC." Mr. McCain, who just this week praised Canada as a secure source of oil, embraced a national fuel standard plan last year at a press conference with California Gov. Arnold Schwarzenegger. Mr. McCain has made his support for environmental issues a major part of his presidential campaign, and uses it as a key issue where he breaks with many other Republicans. McCain campaign spokesman Brian Rogers responded with the following statement late last night: "The concept behind California's LowCarbon Fuel Standard is to use less oil in our transportation sector. Canada joined in to this agreement self-imposing emissions standards on the extracting of their oil resources. Ultimately, an international cap and trade system will allow us to regularize the system by which countries offset and reduce their emissions, but in the short term we should look for a cleaner and more efficient way to extra to oil resources from the tar sands." The senator from Arizona has been outspoken about the need to end dependence on oil from dangerous places, but he is not the only one to embrace expanding California's standard nationwide. Sen. Barack Obama, the likely Democratic presidential nominee, last year introduced a bill in the Senate to do just that. "Beginning in 2010, we will require petroleum makers to reduce the carbon content of their fuel mix 1 percent per year by selling more clean, alternative fuels in its place," Mr. Obama told the Detroit Economic Club in May 2007. "This proposal will spur greater production and availability of renewable fuels like cellulosic ethanol and biodiesel, and it will even create an incentive for the production of more flexible-fuel and plug-in hybrid vehicles that can use these clean fuels or charge up with renewable electricity." A low carbon fuel standard looks at the entire greenhouse gas emissions it takes to drill for, transport and use fuel, known as a wells-to-wheels analysis. By that measure, heavy crude taken from Canada's tar sands or oil shale in the U.S. are judged worse than conventional light crude, which is easy to tap and bring to market. Canadian crude accounted for 18.7 percent of U.S. imports in March, which was the highest foreign source. That is expected to grow to beyond 35 percent, according to an estimate from Mr. Koetzle's group, unless a national fuel standard is created.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
27
Link—LCFS LCFS destroys oil refining capacity Koetzle, 05 (William Koetzle, Ph.D. Senior Vice President of Public Policy at the Institute for Energy Research. “IER Rebuttal to Boucher White Paper” http://www.instituteforenergyresearch.org/2008/04/13/ier-rebuttal-to-boucher-whitepaper/) Obviously the production of oil sands is more difficult than that of traditional petroleum. The production, extraction, separation, and upgrading the bitumen of oil sands requires significantly more energy than that of conventional oil.[36] Because of the greater energy used to produce these resources, the lifecycle GHG emissions from oil sands is greater than that of conventional oil. Estimates of the increase in lifecycle emissions range from 14-70%.[37] State low carbon fuel standards and/or prohibitions against using transportation fuels produced from “non-conventional” sources, therefore, have the potential to negatively impact Canadian oil imports and the United States’ energy security. For example, in the case of a low carbon fuel standard, fuel producers could achieve significant global warming intensity reductions by fuel switching from sources like Canadian oil sands to conventional petroleum products. This generates the perverse outcome whereby the United States ends up importing more petroleum from unsecure foreign sources such as western Africa and the Middle East; while, at the same time, doing nothing to reduce GHG emissions on a net basis, since the Canadian oil will simply flow to other markets such as China.[38] Obviously such an outcome is a negative viewed either through the prism of a GHG emission reduction program or for our energy security. Language like that contained in Section 526 of P.L. 110-140 is similarly suspect from a GHG emission reduction and/or energy security perspective. A plain reading of the language - “No Federal agency shall enter into a contract for procurement of an alternative or synthetic fuel, including a fuel produced from nonconventional petroleum sources, for any mobility-related use” - could be read in such a way that an agency of the federal government, the Department of Defense for example, may not be able enter into a contract to purchase oil from a refinery that uses Canadian oil sands. Again, this makes little sense from a GHG perspective - this oil will be consumed by the world market - and makes no sense for America’s long term energy security since most of the world’s conventional reserves of oil are located in unsecure regions. In fact, this language has generated significant concern within the Canadian government. Recently, Canada’s ambassador to the United States, Michael Wilson, wrote to Secretary of Defence Robert Gates about Section 526 arguing that “there is little fuel on the U.S. market that is 100% petroleum extracted only by conventional methodology” and that interpreting Section 526 to apply to all commercially-available fuel made in part from nonconventional petroleum could exclude all fuel commercially available in the United States from being eligible for purchase by the United States government.” This would result in the United States being seen as “preferring off-shore crude from other countries over fuel made in part from United States and Canadian sources.” [39] Beyond just an impact on Canadian oil, however, such initiatives imperil technological innovations designed to increase the productivity of existing oil wells in the United States as well. Enhanced Oil Recovery (EOR) are methods by which the additional reserves from existing fields can be produced; with the potential to increase the recovery of oil from these reservoirs to a rate as high as 60%.[40] These methods fall into the “unconventional” category in that they involve the use of additional steps (such as the introduction of heat in thermal recovery) and extraction efforts. One such method, CO2 injection, which uses the pressure of gas to push more oil to the well bore, is supported by DOE research[41] as both a way to increase the productivity of existing American oil fields and as a way to capture and sequester CO2. Employing EOR technology, such as CO2 injection, could increase the recoverable reserves of the United State by as much as 20 billion barrels.[42] Like oil sands, however, EOR is both unconventional and may have a slightly higher lifecycle emissions profile then conventional oil (some estimate that EOR emissions are between 2 and 19% higher).[43] This could produce the perverse outcome whereby the United States Government, following the prohibition found in Sec. 526 of P.L. 110-140, would be prevented from entering into a contract to purchase American-produced oil that was the product of American government funded research. Such an outcome makes little sense from an environmental or energy policy perspective. These examples underscore the more general point that actions which attempt to reduce GHG emissions that do not include the participation by all significant emitters, or that is blind to other considerations such as energy security, are likely to result in outcomes that do not serve the stated aim to stabilize global concentrations of greenhouse gases. In the examples here, the “best” result of such programs merely shifts emissions to other parts of the globe; the “worst: result is that it makes the United States more dependent on un-secure sources of foreign energy.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
28
Link—LCFS LCFS discourages the switch to Canadian oil shales and tar sands and forces mid-East dependence. Washington Post 08 (Stephen Dinan “McCain Oil Plan Relies on Middle East”, June 20 http://www.washtimes.com/news/2008/jun/20/mccain-oil-plan-fosters-reliance-on-middle-east/?page=2) Sen. John McCain caps his weeklong push for U.S. energy independence with a trip Friday to Canada, but his own environmental plan discourages use of Canadian oil and drastically increases American reliance on oil from the Middle East and other potentially unfriendly places. The presumed Republican presidential nominee called last year to expand California's low carbon fuel standard, which measures the amount of greenhouse gases needed to produce fuel and punishes use of "dirty" heavy crude oil in favor of conventional light crude or alternative fuels. Expanding that plan nationwide would force U.S. refiners to buy less American and Canadian oil - which come increasingly from dirty sources like shale and tar sands - and instead use more oil from the Middle East. "We are likely to increase our dependence on just those very countries we all worry about," said William Koetzle, senior vice president of public policy at the Institute for Energy Research, a think tank that promotes free-market solutions. "If you create disincentives for the use of Canadian oil, it'll have to be replaced with oil from another place, and that probably means oil from OPEC." Mr. McCain, who just this week praised Canada as a secure source of oil, embraced a national fuel standard plan last year at a press conference with California Gov. Arnold Schwarzenegger. Mr. McCain has made his support for environmental issues a major part of his presidential campaign, and uses it as a key issue where he breaks with many other Republicans. McCain campaign spokesman Brian Rogers responded with the following statement late last night: "The concept behind California's Low-Carbon Fuel Standard is to use less oil in our transportation sector. Canada joined in to this agreement self-imposing emissions standards on the extracting of their oil resources. Ultimately, an international cap and trade system will allow us to regularize the system by which countries offset and reduce their emissions, but in the short term we should look for a cleaner and more efficient way to extra to oil resources from the tar sands." The senator from Arizona has been outspoken about the need to end dependence on oil from dangerous places, but he is not the only one to embrace expanding California's standard nationwide. Sen. Barack Obama, the likely Democratic presidential nominee, last year introduced a bill in the Senate to do just that. "Beginning in 2010, we will require petroleum makers to reduce the carbon content of their fuel mix 1 percent per year by selling more clean, alternative fuels in its place," Mr. Obama told the Detroit Economic Club in May 2007. "This proposal will spur greater production and availability of renewable fuels like cellulosic ethanol and biodiesel, and it will even create an incentive for the production of more flexible-fuel and plug-in hybrid vehicles that can use these
A low carbon fuel standard looks at the entire greenhouse gas emissions it takes to drill for, transport and use fuel, known as a wells-to-wheels analysis. By that measure, heavy crude taken from Canada's tar sands or oil shale in the U.S. are judged worse than conventional light crude, which is easy to tap and bring to market. Canadian crude accounted for 18.7 percent of U.S. imports in March, which was the highest foreign source. That is expected to grow to beyond 35 percent, according to an estimate from Mr. Koetzle's group, unless a national fuel standard is created. clean fuels or charge up with renewable electricity."
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
29
Link—LCFS Tar sands are inevitable – it’s only a question of whether they’re used by the US or China. LCFS would ban them in the U.S. Perry, 8 (Mark Perry, professor of finance and economics at the Flint campus of the University of Michigan. 3-30-08. “The tar sands solution” http://www.pittsburghlive.com/x/pittsburghtrib/opinion/columnists/guests/s_559662.html? source=rss&feed=5) The tar sands hold an estimated 174 billion barrels of crude oil, making Canada's oil-sands deposits second only to Saudi Arabia in global reserves. The United States currently obtains 1 million barrels a day from Canada's tar sands. But with planned investments the daily supply could exceed 3 million barrels by 2015. But extracting heavy oil from tar sands and transporting it by pipeline for refining is a difficult and costly process. Producers are developing new drilling techniques to reduce the large volumes of natural gas and water needed to separate the oil from sand. And the oil companies, which have pledged to reduce greenhouse emissions in their operations, are making the needed investments to meet environmental regulations. Yet the greenhouse-gas issue overshadows all other considerations. The challenge is how to produce and refine enough oil to meet rising energy demand while mitigating carbon-dioxide emissions. Refiners have set a goal to improve energy efficiency 10 percent over the next decade. And one way they are making progress is by capturing excess heat from their operations to produce additional electricity. An indication of change is the way oil companies now see unconventional sources of oil like tar sands. Refineries throughout the Midwest and Gulf Coast are being retrofitted to accommodate the heavier oil. And companies are investing larger sums than ever in developing new technologies to reduce airborne and water emissions. Even though the companies are confident they can meet environmental requirements, opponents are determined to block the necessary permits. If our refineries can't take advantage of this secure source of oil from tar sands, other countries -- notably China -- will move in. We need no reminders of what this could mean -- given the economic beating we took when oil supplies were scarce in the 1970s. Today, oil imports from overseas cost U.S. consumers more than $200 billion a year and are responsible for a large share of our trade deficit. Given these facts, you'd think our political leaders would insist on a long-term commitment to shore up oil production and refining in North America. But that hasn't happened. Although President Bush has publicly welcomed production of Canadian tar sands oil, Congress last year passed legislation that prohibits the government from using alternative fuels that have a larger carbon footprint than conventional oil. As a result, the U.S. Defense Department is unable to use jet fuel made from tar sands oil even though greenhouse gas-emissions per barrel of tar sands oil have fallen 32 percent since 1990. Now California is moving to disallow the use of tar sands oil under a recently approved low-carbon fuels standard sought by environmental groups, and Illinois is among a dozen states also considering such a standard.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
30
Link—ethanol An increased use of ethanol directly decreases the need for oil refineries Doggett 07 – (Tom - ,staff writer, signonsandiego.com, The Associated Press, “US Law to Spur new refineries a bust so far,” June 15, http://www.signonsandiego.com/news/business/20070615-1058-usa-refineries-law.html) Both the Bush administration and Congress are pushing for more production of ethanol and other alternative fuels over the next decade that would reduce gasoline consumption. That's causing companies to rethink the need for expanding refineries, much less considering building new ones, according to the industry's main trade group, the National Petrochemical and Refiners Association. “Look at the conflicting messages we're getting from policy makers,” said NPRA spokesman Bill Holbrook. “You're going to stop and consider what investments you're going to make ... to continue making a product (like gasoline) that some are trying to limit distribution of,” he said. Ethanol expansion kills refinery investments. Chemical News & Intelligence, 07 (US refiners warn Congress on ethanol mandates, July, 31, lexis) On the production side, Drevna said a new and massive congressional mandate for ethanol production could undermine US gasoline supplies. He cited the Bush administration's [3]call for 35bn gal/year of biofuels production by 2017 as part of a plan to reduce US gasoline consumption by 20%. The [4]Department of Energy forecasts that US gasoline demand that year will be 161bn gallons, he noted. A 20% reduction would mean only 129bn gallons of demand. With current US gasoline production at 136bngal/year, he said US gasoline production is already in excess of the forecast 2017 demand - if the biofuels mandate is met. "It should be clearly understood that requirements to substantially increase the volume of ethanol and other renewables could essentially supplant a significant portion of the need and desire for additional domestic refining capacity," Drevna said. "The domestic refining industry is likely to look upon rapidly rising ethanol and other biofuels requirements in the coming years as adding significantly more risk to investment in capacity expansions," he said. He warned that additional congressional mandates for ethanol output will pressure domestic and foreign refiners to reconsider investments in new capacity. Increasing ethanol and biofuel production will decrease refining capacity New York Times 07 [Jad Mouawad, “Oil Industry Says Biofuel Push May Hurt at Pump, May 24, http://www.nytimes.com/2007/05/24/business/24refinery.html?_r=2&hp=&adxnnl=1&oref=slogin&adxnnlx=1214859293oNJACe+eWBfqa52WB51Pvw] In his State of the Union address in January, President Bush called for a sharp increase in the use of biofuels, along with some improvement in automobile fuel efficiency to reduce America’s use of gasoline by 20 percent within 10 years. Congress is considering legislation calling for a nearly fivefold increase in the use of ethanol. That has forced many oil companies to reconsider or scale back their plans for constructing new refinery capacity. In hearings before Congress last year, oil executives outlined plans to increase fuel production by expanding existing refineries. Those plans would add capacity of 1.6 million to 1.8 million barrels a day over the next five years, for an increase of 10 percent, according to the National Petrochemical and Refiners Association. But those plans have since been scaled back to more than one million barrels a day, according to the Energy Information Administration, an arm of the federal government. “If the national policy of the country is to push for dramatic increases in the biofuels industry, this is a disincentive for those making investment decisions on expanding capacity in oil products and refining,” said John D. Hofmeister, the president of the Shell Oil Company. “Industrywide, this will have an impact.” The concerns were echoed in a recent report by Barclays Capital, which said the uncertainty about the ethanol growth “will do little to accelerate desperately needed investment in complex United States refining units.”
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
31
Link—ethanol Increases in ethanol prevents future refinery expansions Hebert, 8 (H. Josef, Associated Press Writer, Oil Industry Scales Back Refinery Plans, June 17, lexis) WASHINGTON (AP) -- A push from Congress and the White House for huge increases in biofuels, such as ethanol, is prompting the oil industry to scale back its plans for refinery expansions. That could keep gasoline prices high, possibly for years to come. With President Bush calling for a 20 percent drop in gasoline use and the Senate now debating legislation for huge increases in ethanol production, oil companies see growing uncertainty about future gasoline demand and little need to expand refineries or build new ones. Oil industry executives no longer believe there will be the demand for gasoline over the next decade to warrant the billions of dollars in refinery expansions -- as much as 10 percent increase in new refining capacity -- they anticipated as recently as a year ago. Biofuels such as ethanol and efforts to get automakers to build more fuel-efficient cars and SUVs have been portrayed as key to countering high gasoline prices, but they are likely to do little to curb costs at the pump today, or in the years ahead as refiners reduce gasoline production. Legislations pushing ethanol is expected to cut back refining capacity Hebert, 8 (H. Josef, Associated Press Writer, Oil Industry Scales Back Refinery Plans, June 17, lexis) Only last year, the Energy Department was told that refiners, reaping big profits and anticipating growing demand, were looking at boosting their refining capacity by more than 1.6 million barrels a day, a roughly 10 percent increase. That would be enough to produce an additional 37 million gallons of gasoline daily. But oil companies already have scaled those expansion plans back by nearly 40 percent. More cancelations are expected if Congress passes legislation now before the Senate calling for 15 billion gallons of ethanol use annually by 2015 and more than double that by 2022, say industry and government officials. "These (expansion) decisions are being revisited in boardrooms across the refining sector," said Charlie Drevna, executive vice president of the National Petrochemical and Refiners Association. With the anticipated growth in biofuels, "you're getting down to needing little or no additional gasoline production" above what is being made today, said Joanne Shore, an analyst for the government's Energy Information Administration. Although plans for new refineries are viable now, new ethanol legislation will destroy them Reed Business 07 (written by staff, June 7, purchasing.com, “Ethanol supply glut in second half could depend on logistics capacity,” http://www.purchasing.com/article/CA6458591.html) Another major question mark in the energy supply chain will be how the increased use and supply of ethanol impacts the number and capacity of oil refineries in the U.S. and, eventually, the price of gas. There are some plans for new oil refineries (see sidebar) in the U.S. Some analysts feel that plans for any increase in refinery capacity may be in question—for better or worse. The Associated Press reports that "Oil industry executives no longer believe there will be the demand for gasoline over the next decade to warrant the billions of dollars in refinery expansions—as much as 10% increase in new refining capacity—they anticipated as recently as a year ago." In the past year (including President Bush's now-famous call for ethanol in his State of the Union), oil companies have scaled back refinery expansion plans by nearly 40% with more cancellations expected if Congress passes legislation now before the Sensate calling for 15 billion gallons of ethanol use by 2015 and more than double that by 2022, say industry and government officials. With the anticipated growth in biofuels, "you're getting down to needing little or no additional gasoline production," Joanne Shore, an analyst for the government's Energy Information Administration told the Associated Press. In the same report, Chevron Corp. vice chairman Peter Robertson said the energy giant is reviewing its long-term refinery plans. "Why would I invest in a refinery when [the Government] is trying to make 20% of the gasoline supply ethanol?" On the other side, Ron Lamberty of the American Coalition for Ethanol, tells the AP that all the talk about biofuels threatening gasoline production is the "latest attempt to blame ethanol on Big Oil's failure to meet our energy needs."
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
32
Link—ethanol Ethanol Legislation will stop refinery expansion The Associated Press 07 – (by staff, June 17, “Ethanol could keep the price of gas high,” http://www.msnbc.msn.com/id/19276523/) “The fact is that Americans are paying more at the pump because we do not have the domestic capacity to refine the fuels consumers demand,” Inhofe complained as he tried unsuccessfully to get into the bill a proposal to ease permitting and environmental rules for refineries. This spring, refiners, hampered by outages, could not keep up with demand and imports were down because of greater fuel demand in Europe and elsewhere. Despite stable — even sometimes declining — oil prices, gasoline prices soared to record levels and remain well above $3 a gallon. Consumer advocates maintain the oil industry likes it that way. “By creating a situation of extremely tight supply, the oil companies gain control over price at the wholesale level,” said Mark Cooper of the Consumer Federation of America. He argued that a wave of mergers in recent years created a refining industry that “has no interest in creating spare (refining) capacity.” Only last year, the Energy Department was told that refiners, reaping big profits and anticipating growing demand, were looking at boosting their refining capacity by more than 1.6 million barrels a day, a roughly 10 percent increase. That would be enough to produce an additional 37 million gallons of gasoline daily. But oil companies already have scaled those expansion plans back by nearly 40 percent. More cancellations are expected if Congress passes legislation now before the Senate calling for 15 billion gallons of ethanol use by 2015 and more than double that by 2022, say industry and government officials. Ethanol directly trades off with oil RFA 5 – (The reneable fuels association, google, http://www.ethanolrfa.org/resource/facts/energy/) The United States is increasingly dependent on imported energy to meet our personal, transportation, and industrial needs. With the rise of oil prices above $100 a barrel, the impact of our dependence on imported oil takes on greater importance. As a domestic, renewable source of energy, ethanol can reduce our dependence on foreign oil and increase the United States' ability to control its own security and economic future by increasing the availability of domestic fuel supplies. By displacing hundreds of millions of barrels of imported oil, the increasing reliance on domestically-produced ethanol is making available billions of dollars for investment in domestic renewable energy technologies.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
33
Link—oil vouchers Oil Vouchers decrease the amount of oil consumed. Feldstein 01 – (Martian - Professor of Economics, Harvard University, and President of the National Bureau of Economic Research, National Interest, “Oil Dependence and National Security: A Market-based System for Reducing U.S. Vulnerability,” http://www.nber.org/feldstein/oil.html#N_1_) A rough guess is that the value of a voucher might be about 75 cents in the first year. If the household that receives 1,000 OCVs wishes to drive 25,000 miles with a fuel efficiency of 20 miles per gallon it will need to purchase an additional 250 vouchers at a cost of about $190. Conversely, if the household that receives 1000 OCVs only wants to purchase 800 gallons of gasoline, it will be able to sell its 200 excess vouchers for $150. Although these cash amounts are not large, the voucher system creates the right incentives because each individual recognizes that the cost of another gallon of gas is both the approximately $1.30 that he pays for the gasoline and the 75 cents that the voucher is worth. The same is true for both someone who needs to buy vouchers for 75 cents and for someone with excess vouchers that he could sell for 75 cents. Achieving the same 43 billion gallon reduction in gasoline consumption by a 75 cent a gallon gasoline tax would cost the average American household about $750 a year in higher taxes and produce revenue of about $100 billion a year. Moreover, since the 75 cent value of the voucher is just an estimate, there is no guarantee that a 75 cent tax would even achieve the desired reduction. And just as the price of the voucher is likely to come down (unless the number of vouchers is reduced) as individuals shift to more fuel efficient cars, the gasoline tax would also have to be adjusted over time, making it even less likely that the policy would achieve its desired goal. The voucher system would automatically limit consumption to the desired amount and would do so in a way that gives every gasoline buyer the same incentive to conserve gasoline. (6) Since higher income households generally consume more gasoline than lower income households, the likely effect of the OCVS system would be to make higher income households buyers of vouchers while lower income households were net sellers. The most recent available data (for 1994) show that households with income below $15,000 consumed about 700 gallons of gasoline per year while those with income over $35,000 consumed an average of about 1250 gallons per year. With a distribution of 750 OCVs per household (about 25 percent less than average current consumption), the lower income households would receive about $170 from selling vouchers while the higher income households would pay an extra $150 to buy vouchers (7).
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
34
Link—carbon tax A carbon tax would discourage the production of oil from tar sands Carbon Tax Center 07 [Danial Rosenblum, “A Carbon Tax When Oil Approaches $100/Barrel?” 11/9, http://www.carbontax.org/blogarchives/2007/11/09/a-carbon-tax-when-oil-approaches-100barrel/] In addition, high oil prices encourage the development of new sources of energy with huge carbon dioxide emissions such as the Alberta oil sands projects. Tar sands development is the single largest contributor to the increase in climate change in Canada according to Greenpeace Canada. Even worse, according to a study by the Sage Centre and World Wildlife FundCanada, "voracious water consumption by Alberta's oilsands threatens the quality and quantity of water available to Saskatchewan and the Northwest Territories through the Mackenzie River system." In fact, today's New York Times cites a new study finding that "[h]igh levels of carcinogens have been found in fish, water and sediment downstream from Alberta's huge oil sands projects." A carbon tax would reduce the economic incentive for such projects by holding down the price of oil. A carbon tax actually applied to such projects would destroy their economics.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
35
Link—carbon caps/cap and trade Carbon caps would lead to a reduction in refining capacity LA Business Journal 06 [Howard Fine, “Greenhouse gas bill noxious to business” July 31, http://findarticles.com/p/articles/mi_m5072/is_31_28/ai_n16676289] Even though momentum is building for action to curb global warming, major business groups and local businesses are lining up against legislation in Sacramento that would place caps on industrial greenhouse gas emissions. The flashpoint for businesses is AB 32, by Assembly Speaker Fabian Nunez, D-Los Angeles, and Assemblywoman Fran Pavley, D-Agoura Hills, which would make California the first state to adopt the Kyoto Accord by requiring businesses to reduce emissions of greenhouse gases primarily carbon-based chemicals--to 1990 levels by the year 2020. Oil companies, electric power utilities, cement makers, chemical and steel plants and food processors would all be hit hard by greenhouse gas caps and have formed a coalition aimed at derailing the bill in the closing weeks of the legislative session. These industries say the bill would hike energy costs and force carbon emitters to cut production or move out of state. "It's already a challenge for manufacturers to grow and hire new employees in California because of high energy costs. The last thing we need is another onerous regulation that will push energy costs even higher and convince companies to take their jobs elsewhere," said Jack Stewart, president of the California Manufacturers and Technology Association. Among the Los Angeles-area facilities hardest hit would be the eight refineries in the South Bay and harbor areas, electric power plants throughout the region and cement manufacturing plants. Take the Western States Petroleum Association, which counts six L.A. County refineries among its membership--including BP plc.'s Carson refinery and Chevron Corp.'s El Segundo refinery. "If these caps are imposed, refineries would have to reduce production 17 percent to get back to 1990 carbon emission levels," said Joe Sparano, president of the association. "That's the equivalent of shutting down three average-sized refineries each producing 100,000 barrels per day of refined product." Cap and trade will decrease refineries for oil, natural gas Samuelson 08 [Robert J. Washington Post Writers Group- “The global warming solution favored by environmentalists would raise energy costs” June 2] Carbon-based fuels (oil, coal, natural gas) provide about 85 percent of U.S. energy and generate most greenhouse gases. So, the simplest way to stop these emissions is to regulate them out of existence. Naturally, that's what cap-and-trade does. Companies could emit greenhouse gases only if they had annual "allowances" -- quotas -- issued by the government. The allowances would gradually decline. That's the "cap." Companies (utilities, oil refineries) that needed extra allowances could buy them from companies willing to sell. That's the "trade." In one bill, the 2030 cap on greenhouse gases would be 35 percent below the 2005 level and 44 percent below the level projected without any restrictions. By 2050, U.S. greenhouse gases would be rapidly vanishing. Even better, their disappearance would allegedly be painless. Reviewing five economic models, the Environmental Defense Fund asserts that the cuts can be achieved "without significant adverse consequences to the economy." Fuel prices would rise, but because people would use less energy, the impact on household budgets would be modest. This is mostly make-believe. If we suppress emissions, we also suppress today's energy sources, and because the economy needs energy, we suppress the economy. The models magically assume smooth transitions. If coal is reduced, then conservation or non-fossil-fuel sources will take its place. But in the real world, if coal-fired power plants are canceled (as many were last year), wind or nuclear won't automatically substitute. If the supply of electricity doesn't keep pace with demand, brownouts or blackouts will result. The models don't predict real-world consequences. Of course, they didn't forecast $135-a-barrel oil.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
36
Link—perception Our link is immediate: the plan immediately destroys investor confidence in refineries Drevna, 08 - President National Petrochemical and Refiners Association (Charles, CAPITOL HILL HEARING TESTIMONY, 5/6, CQ Congressional Testimony, lexis) Refinery Capacity Expansion Projects. It should be clearly understood that requirements to substantially increase the volume of ethanol and other renewables will essentially supplant a significant portion of the need/desire for additional domestic refining capacity. Refiners must make investments today on what they believe to be the longer- term (10-15 years or more) outlook. The domestic refining industry is likely to look upon rapidly rising ethanol and other bio-fuels requirements in the coming years as adding significant more risk to investments in capacity expansions. As recently as 2006, the Department of Energy (DOE) forecast that domestic refiners were likely to add 1.5 million barrels per day of capacity between 2006-2010. Based upon perceptions of renewable market developments - developments being stoked by administration and congressional actions - current estimates suggest that expansion in the domestic refining is likely to be constrained well below 1 million barrels per day. These decisions are being re-visited in boardrooms across the refining sector as the anticipated surge in ethanol requirements/mandates in the coming years will pressure domestic, and undoubtedly some foreign refiners currently supply the U.S. market to postpone or cancel new investments in petroleum refining capability.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
37
Xtn—oil shocks=depression An oil shock would cause global economic depression and war with Iran Long, 6 – Stephen, ABC Transcripts Australia, 8/3/06, “Rising oil prices could cause global recession” Lexis ELEANOR HALL: The Prime Minister John Howard has described fuel prices as the greatest worry of his political life. And his stress levels may soon reach an extreme state if the predictions of a respected US economist come true. Speaking in Sydney today, Standard and Poor's New York-based chief economist David Wyss, warned today that there's a real possibility that a new World Oil Shock could cause a deep global recession if a war against Iran shut down Middle East oil supplies. Traders in the futures markets are making bets on that possibility, with economists warning a war could send the oil price skyrocketing as high as $US 250 a barrel. But there's better news today on petrol pricing in Australia from the consumer watchdog the ACCC. It has found that accusations that the petrol industry here has colluded to fix prices are unfounded. And today the ACCC has set aside those accusations saying if anything the industry is more competitive than it was a few years ago. Economics Correspondent Stephen Long has our story. STEPHEN LONG: In Canberra today, the petrol price inquiry was looking at the little picture - movements of a few cents in the price of petrol at the bowser. With Coles and Woolies now dominating distribution, critics have talked of collusion and price gouging, based on the strange coincidence of prices going up by identical sums in any given area on a given day. And price hikes coinciding with long weekends. But the ACCC's cartel busters see it differently. This is what ACCC chief executive Brian Cassidy said in answer to a question from Labor's Senator Kerry O'Brien. BRIAN CASSIDY: It seems to us that basically the retail petrol market is a competitive one. Indeed, it's probably become more competitive in recent times with the entry of Woolworths and Shell. And we've been able to track, as Woolworths and Shell have entered the market in different regions, that relative to the import price indicator, there's been reductions in the retail price of between half a cent and 3 cents a litre. STEPHEN LONG: In Sydney today,
economists were musing on the big picture, and the possibility of a supply shock that could spell disaster. David Wyss is the global chief economist for the ratings agency, Standard and Poors. He told a morning conference that we're less dependent on oil than we used to be, and only represents about a third of all energy production compared to nearly half during the 1971 oil shock. But... DAVID WYSS: That doesn't, however, mean that oil can't cause a recession. It just means the price has to go higher to cause a recession than it used to. And the potential for that to happen is unfortunately very real. If Iran not only goes out of production itself, but takes the Strait of Hormuz with it, then you're looking at shortfalls in the 20 million barrel range, probably oil prices above $250 a barrel and a pretty deep world recession. That's our scare scenario. And your guess is as good as mine as to what's going to happen out there. Strikes on Iran will include nuclear weapons—using them will lower the threshold for nuclear use snowballing to extinction. Hirsch, 6 – Jorge, Professor of Physics at the University of California at San Diego, 10/16/2006. “Nuclear Strike on Iran Is Still on the Agenda What will Congress do?” http://www.antiwar.com/orig/hirsch.php?articleid=9868. The Bush administration has radically redefined America's nuclear use policy [1], [2]: U.S. nuclear weapons are no longer regarded as qualitatively different from conventional weapons. Many actions of the administration in recent years strongly suggest that an imminent U.S. nuclear use is being planned for, and this was confirmed by Bush's explicit refusal to rule out a U.S. nuclear strike against Iran. We have all been put on notice. The fact that North Korea is now a nuclear country does not change the agenda – quite the contrary. There were fears that the U.S. would use nuclear weapons in the Iraq attack [1], [2], fears that did not materialize. Hence some will argue that the current fears of a nuclear strike against Iran may not materialize either. Some will argue that there were many other occasions in the past 60 years when the U.S. appeared to come close to using nuclear weapons and did not [1], [2], that the threshold for using nuclear weapons always was and remains extraordinarily high, and that the nuclear "saber-rattling" is just trickery to scare our opponents ( "madman theory"). These arguments are wrong. The U.S. is closer than it has been since Nagasaki to using nuclear weapons again. This year, for the first time in its history, the American Physical Society, representing 40,000 members of the profession that created nuclear weapons, issued a statement of deep concern on this matter: "The American Physical Society is deeply concerned about the possible use of nuclear weapons against non-nuclearweapon states and for preemptive counter-proliferation purposes." In the case of Iraq, our adversary was so weak that there was no way the use of nuclear weapons could have been justified in the eyes of the world. Iran is different: it possesses missiles that could strike U.S. forces in Iraq and the Persian Gulf, as well as Israeli cities. Iran also has a large conventional army. The 150,000 U.S. soldiers in Iraq will be at great risk if there is a war with Iran, and Americans will support a nuclear strike on Iran once the administration creates a situation where it can argue that such action will save a large number of American lives. In previous U.S. wars, nuclear weapons were not used because of an unacceptably high risk of triggering a nuclear conflict with the Soviet Union or China [1], [2], [3]. Because North Korea appears to have a nuclear deterrent, and because of the risk that China could get involved, there is no danger that the U.S. will attack North Korea. In fact, Bush will use the fact that North Korea has joined the nuclear club, and charges that he was not "tough enough" on North Korea, as justification for attacking Iran before it too joins the club. Never mind the fact that, unlike North Korea, Iran has stated no intention to follow that path, nor is there any evidence that it is doing so. The nuclearization of North Korea will be used by the administration as an argument for nuking Iran, which may be why the administration did everything it could to encourage it. No nuclear country is likely to intervene when the U.S. uses
nuclear weapons against Iran, so there is no military deterrent. The U.S. has now achieved vast nuclear superiority and is about to demonstrate to the world that its $5 trillion nuclear arsenal is not "unusable." It is ignoring the fact that crossing the
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
38
nuclear threshold in a war against Iran will trigger a chain reaction that in the coming years could lead to global nuclear war and widespread destruction of life on the planet.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
39
Xtn—oil shocks=nuke war Major oil shocks would plunge the world into nuclear war. Lauria 08 – (Joe - New York-based investigative journalist. A freelance member of the Sunday Times of London Insight team, he has also worked on investigations for the Boston Globe and Bloomberg News., The Huffington Post, April 14, “The Coming War with Iran: It’s About the Oil, Stupid,” http://www.commondreams.org/archive/2008/04/14/8282/) The Saudis would not mind seeing the Iranian regime go. But the Saudis may also be on the list. The US may have to destabilize and control Saudi Arabia some day too. The Wall Street Journal a few years ago revealed that in the 1970s under Nixon, Kissinger had plans drawn up for the US invasion and occupation of the Saudi oil fields. Those plans can be dusted off. The American oil wars are being launched out of weakness, not strength. The American economy is teetering and without control of the remaining oil it will collapse. There will be massive chaos in any case, when only enough oil remains for the American elite and whomever they choose to share it with. That will leave an oil-starved China and India, both with nuclear weapons, with no alternative but to bow to America or go to war. It’s not about greed any more. It’s about survival. Because the leadership of this country was initially too greedy to switch from oil to solar, wind, geothermal and other renewable alternatives, it may now be too late. Had the hundreds of billions of dollars poured into the invasion and occupation of Iraq been put into alternative energy the world might have had a fighting chance. Now that is far from certain. What is certain is that these wars are not about democracy. They are not about WMD. The coming one will not even be about Iran’s nuclear weapons project. It’s about the oil, stupid.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
40
2nc—oil shocks bad—Iran Oil shocks could cause an Iranian-Israeli nuclear conflict and global recession Woods, 8 – Richard, Staff Writer, 6/15, the Sunday Times—London, “Oil, housing, food and finance: the best and worst case scenarios for the crucial” Lexis Worst case: In a pre-emptive strike, Israel attacks Iranian military facilities to prevent it building a nuclear bomb. Iran retaliates, threatening wider conflict in the Middle East. The ensuing panic about disrupted oil supplies drives the price way above $200 a barrel. Industry and business, hammered by higher costs, retrench and lay off thousands of workers. Consumers in many countries face the double whammy of higher prices and economic slowdown. As consumers cut their spending, asset prices collapse further. Millions suffer negative equity. Living standards fall. A global recession unfolds. That would cause World War 3. Leonid Ivashov, analyst at the Strategic Culture Foundation, 4/21/2007. “Iran: the Threat of a Nuclear War,” http://www.megachip.info/modules.php?name=Sections&op=viewarticle&artid=3871.
What might cause the force major event of the required scale? Everything seems to indicate that Israel will be sacrificed. Its involvement in a war with Iran - especially in a nuclear war - is bound to trigger a global catastrophe. The statehoods of Israel and Iran are
based on the countries' official religions. A military conflict between Israel and Iran will immediately evolve into a religious one, a conflict between Judaism and Islam. Due to the presence of numerous Jewish and Muslim populations in the developed countries, this would make a global bloodbath inevitable. All of the active forces of most of the countries of the world would end up fighting, with almost no room for neutrality left. Judging by the increasingly massive acquisitions of the residential housing for the Israeli citizens, especially in Russia and Ukraine , a lot of people already have an idea of what the future holds. However, it is hard to imagine a quiet heaven where one might hide from the coming doom. Forecasts of the territorial distribution of the fighting, the quantities and the efficiency of the armaments involved, the profound character of the underlying roots of the conflict and the severity of the religious strife all leave no doubt that this clash will be in all respects much more nightmarish than WWII.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
41
2nc Trade Deficit Impact Canadian oil will inevitably enter the market—the question is whether the US or China gets there first—US control will comply with environmental regulations better and prevent a trade deficit Perry, 08 - professor of finance and economics at the Flint campus of the University of Michigan (Mark, Tulsa World (Oklahoma), "Or is using tar sands oil vital for U.S.?", 3/30, lexis) FLINT, Mich. -- At a time when saying anything good about fossil fuels is like declaring war on the environment, it may seem like wishful thinking to press for an expansion of U.S. oil refining capacity. Yet it is precisely this sort of thinking that is necessary if we are to make use of a vast, secure and reliable supply of fuel from Canada's oil sands. The tar sands hold an estimated 174 billion barrels of crude oil, making Canada's oil-sands deposits second only to Saudi Arabia in global reserves. The United States currently obtains 1 million barrels a day from Canada's tar sands, but with planned investments the daily supply could exceed 3 million barrels by 2015. But extracting heavy oil from tar sands and transporting it by pipeline for refining is a difficult and costly process. Producers are developing new drilling techniques to reduce the large volumes of natural gas and water needed to separate the oil from sand. And the oil companies, which have pledged to reduce greenhouse emissions in their operations, are making the needed investments to meet environmental regulations. Yet the greenhouse-gas issue overshadows all other considerations. The challenge is how to produce and refine enough oil to meet rising energy demand, while mitigating carbon-dioxide emissions. Refiners have set a goal to improve energy efficiency 10 percent over the next decade, and one way they are making progress is capturing excess heat from their operations to produce additional electricity. An indication of change is the way oil companies now see unconventional sources of oil like tar sands. Refineries throughout the Midwest and Gulf Coast are being retrofitted to accommodate the heavier oil. And companies are investing larger sums than ever in developing new technologies to reduce airborne and water emissions. Even though the companies are confident they can meet environmental requirements, opponents are determined to block the necessary permits. If our refineries can't take advantage of this secure source of oil from tar sands, other countries -- notably China -- will move in. We need no reminders of what this could mean -- given the economic beating we took when oil supplies were scarce in the 1970s. Today, oil imports from overseas cost U.S. consumers more than $200 billion a year, and are responsible for a large share of our trade deficit. That’s key to economic hegemony Elliot 6 Guardian News Reporter [Larry, “Is America Heading for Economic Collapse?,” http://edstrong.blogcity.com/is_america_heading_for_economic_collapse.htm] First, running a permanent trade deficit affects the structure of your economy. It means fewer manufacturing jobs where productivity tends to be higher and more jobs in the service sector, where productivity tends to be lower. The US has struck a Faustian bargain with its trading partners, particularly China, responsible for about one third of the $700bn-plus trade
China creates millions of jobs and builds modern factories that are transforming it into an industrial superpower, and it also accumulates billions of total last year. As the American economist Tom Palley puts it: "US consumers get lots of cheap goods in return for which they give over paper IOUs that cost less to print. Meanwhile,
dollars in financial claims against the US. From this perspective, trade deficits don't matter because there are no limits to either government or private borrowing, and because manufacturing doesn't matter either." The logic of this, Palley notes drily, is that the US would benefit even further if China devalued its exchange rate and ran a larger trade surplus. The second point is potentially much more explosive: it
What would happen if, as a result of global developments over the coming decades, the dollar ceased to be the reserve currency of choice. This was a point raised by Avinash Persaud, one of the financial sector's more original thinkers, in a recent lecture in New York. Persaud's argument is as follows. Throughout history, there has always tended to be one dominant reserve currency along with a host of lesser rivals. In the 19th century Britain was the pre-eminent economy and sterling was the main reserve currency. Yet currencies don't retain their dominance forever; part of Britain's problem at the time of Suez was that it was struggling to adjust to a world in which it was no longer the top-dog currency but the creditors came knocking at the door asking for their cheques to be cashed. The US is living beyond its means, hoping that nobody cashes the cheques it has been merrily writing as the current account has gone deeper into the red. That's the advantage of being a reserve currency, even though, as Persaud notes, there is no rule which says that you have to run current account deficits simply because you are a reserve currency. Britain didn't a century ago. In the decade or so up to the first world war it had a trade surplus of 5% of GDP. "That is a mirror image of the US today. The UK was in surplus by as much as the US is in deficit." That deficit has enabled the Chinese to build up their industrial strength at a rapid rate, so much so that it is probable that China - and perhaps India - will have overtaken the US as the world's largest economy (on a purchasing power parity basis, at least) by 2050. Persaud thinks that the upshot of this will be that in the next few decades the dollar will start to lose its reserve status just as sterling did in the last century. "In the case of sterling's loss of reserve is the one sketched out in the crystal ball gazing at the top of this piece.
status, world war one and two accelerated a process that had begun more slowly before and ended abruptly with debt and inflation." Today the process is also being accelerated - by wars where the end is as elusive as the enemy and by a consumerism built on a property bubble. Perhaps we will not have to wait until 2050. In my lifetime, the dollar will start to lose its reserve currency status, not to the euro but to the renminbi or the rupee. This would clearly have massive economic and geopolitical consequences. As Persaud rightly says: "If it was economically and politically painful for the UK, even though its international financial position did not begin from a position of heavy deficit, what will it be like for the US which has become the world's largest debtor. "There will be an avalanche of cheques coming home to be paid when the dollar begins to lose its status." And this "avalanche of cheques" is likely to make for the most horrendous geo-political tension.
global financial hegemony without a fight seems fanciful in the extreme.
Jheidt, Anshu, Melissa, Alexa, Krystal
The idea that the US will give up
Oil refineries DA 7 week seniors
42
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
43
2nc Trade Deficit Impact Economic hegemony key to overall hegemony. Looney, 3 – Robert, Professor of National Security Affairs at the Naval Postgraduate School, November 2003. “From Petrodollars to Petroeuros: Are the Dollar's Days as an International Reserve Currency Drawing to an End?” Strategic Insights, 2.11, http://www.ccc.nps.navy.mil/si/nov03/middleEast.asp. Political power and prestige. The benefits of "power and prestige" are nebulous. Nevertheless, the loss of key currency status and the loss of international creditor status have sometimes been associated, along with such non-economic factors as the loss of colonies and military power, in discussions of the historical decline of great powers. Causality may well flow from key currency status to power and prestige and in the opposite direction as well.[8] On a broader scale, Niall Ferguson[9] notes that one pillar of American dominance can be found in the way successive U.S. government sought to take advantage of the dollar's role as a key currency. Quoting several noted authorities, he notes that [the role of the dollar] enabled the United States to be "far less restrained…than all other states by normal fiscal and foreign exchange constraints when it came to funding whatever foreign or strategic policies it decided to implement." As Robert Gilpin notes, quoting Charles de Gaulle, such policies led to a 'hegemony of the dollar" that gave the U.S. "extravagant privileges." In David Calleo's words, the U.S. government had access to a "gold mine of paper" and could therefore collect a subsidy form foreigners in the form of seignorage (the profits that flow to those who mint or print a depreciating currency). The web contains many more radical interactions of the dollar's role. Usually something along the following lines: World trade is now a game in which the U.S. produces dollars and the rest of the world produces things that dollars can buy. The world's interlinked economies no longer trade to capture a comparative advantage; they compete in exports to capture needed dollars to service dollar-denominated foreign debts and to accumulate dollar reserves to sustain the exchange value of their domestic currencies…. This phenomenon is known as dollar hegemony, which is created by the geopolitically constructed peculiarity that critical commodities, most notably oil, are denominated in dollars. Everyone accepts dollars because dollars can buy oil. The recycling of petro-dollars is the price the U.S. has extracted from oil-producing countries for U.S. tolerance of the oil-exporting cartel since 1973.[10] America's coercive power in the world is based as much on the dollar's status as the global reserve currency as on U.S. military muscle. Everyone needs oil, and to pay for it, they must have dollars. To secure dollars, they must sell their goods to the U.S., under terms acceptable to the people who rule America. The dollar is way overpriced, but it's the only world currency. Under the current dollars-only arrangement, U.S. money is in effect backed by the oil reserves of every other nation.[11] While it is tempting to dismiss passages of this sort as uninformed rants, they do contain some elements of truth. There are tangible benefits that accrue to the country whose currency is a reserve currency. The real question is: if this situation is so intolerable and unfair, why hasn't the world ganged up on the United States and changed the system? Why haven't countries like Libya and Iran required something like euros or gold dinars in payment for oil? After all, with the collapse of the Bretton Woods system in 1971 the International Monitary Fund's Standard Drawing Rights (unit of account) was certainly an available alternative to the dollar.[12]
Nuclear war Khalilzad ‘95 (Zalmay, RAND Corporation, Losing The Moment? Washington Quarterly, Vol 18, No 2, p. 84) Under the third option, the United States would seek to retain global leadership and to preclude the rise of a global rival or a return to multipolarity for the indefinite future. On balance, this is the best long-term guiding principle and vision. Such a vision is desirable not as an end in itself, but because a world in which the United States exercises leadership would have tremendous advantages. First, the global environment would be more open and more receptive to American values -democracy, free markets, and the rule of law. Second, such a world would have a better chance of dealing cooperatively with the world's major problems, such as nuclear proliferation, threats of regional hegemony by renegade states, and low-level conflicts. Finally, U.S. leadership would help preclude the rise of another hostile global rival, enabling the United States and the world to avoid another global cold or hot war and all the attendant dangers, including a global nuclear exchange. U.S. leadership would therefore be more conducive to global stability than a bipolar or a multipolar balance of power system.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
44
Xtn—Trade deficit bad—dollar/economy An expansion of the trade deficit causes foreign investors to abandon the dollar, forcing interest rate hikes, recession, and economic disaster Shostak 6 [Frank, Scholar at the Mises Institute, “Does the widening US trade deficit post a threat to the economy?”, February 2nd, http://www.mises.org/story/2029] Most economists are extremely alarmed about the effect of the expanding deficit on the current account. In 2004 the deficit stood at $668 billion, or 5.7% of the gross domestic product (GDP). For 2005 we have estimated that the deficit was around $788 billion, or 6.3% of GDP. As a result of the ballooning deficit, the value of US net external liabilities, expressed at historical cost, jumped to $5.1 trillion in 2005 from $4.3 trillion in 2004. As a percentage of GDP, net external liabilities climbed to 41% in 2005 from 37% in the previous year and 4.9% in 1980. It is held that this increase in foreign debt cannot go on forever. If the Americans do not begin reducing their trade deficit, there will come a time when foreigners will become less willing to hold dollar denominated assets. This in turn will weaken the US dollar. Consequently, once this happens the United States will be forced to increase interest rates (maybe sharply) to continue to attract foreign investments. Higher interest rates in turn will plunge the economy into recession. In short, given the size of the current account deficit it is held that the US dollar has to plunge in a big way against most currencies, and it is not possible to avoid a painful adjustment as a result of this. It would appear that the trade deficit is a major economic problem that must be urgently addressed in order to avoid serious economic disaster. Rising trade deficit causes economic collapse – four reasons Preeg 2K [Ernest H., senior fellow at the Hudson Institute in Washington and holds a Ph.D. in economics from the New School for Social Research, member of U.S. delegations to the Kennedy and Uruguay Rounds of GATT trade negotiations, State Department Director of the Office of European Community and OECD Affairs, Deputy Assistant Secretary for International Finance and Development, and White House Executive Director of the Economic Policy Group, “The Trade Deficit, the Dollar, and the U.S. National Interest”, Hudson Institute, p. 7-8] The current record deficits, projected to continue at high levels for the next several years, and the parallel buildup of the U.S. international net debtor position to $1.5 trillion in 1998, headed to $3-4 trillion by 2005, have, or will have, substantial adverse impact on the U.S. national interest in four distinct, although to a large extent mutually reinforcing, ways: (A) The protectionist backlash against U.S. liberal trade policy. The trade deficit was used by protectionists as an argument against fast-track legislation and a new WTO round at Seattle, and this protectionist pressure will intensify if the U.S. economy weakens or falls into recession. (B) A loss of about $120 billion per year in U.S. disposable income as a result of the foreign debt buildup. In the early 1980s, when the United States was a net creditor nation, there was a net inflow of $27 billion per year in investment income. U.S. foreign investment abroad has since grown sevenfold, and if the United States, absent the trade deficit, had remained a net creditor nation, the investment income inflow, related to the different composition between U.S. investment abroad and foreign investment in the United States, would have risen greatly, perhaps to $100 billion per year. Instead, there was a net outflow of investment income of$19 billion in 1999, and this outflow will rise along with the continued current account deficits. (C) Foreign government leverage against the United States from the rapid buildup of official dollar holdings abroad during the 1990s. Foreign governments increased official dollar holdings from $432 billion in 1989 to about one trillion dollars in 1999, for reasons explained in principal conclusion 1. At some future point, large dollar holders, such as Japan and China, could threaten to sell dollars, or shift them into euros and other currencies, as bargaining leverage against the United States related to trade or national security issues. One Japanese prime minister has publicly spoken of the temptation to sell dollars, and Chinese military strategists have published studies about integrated warfare with the United States, including in financial markets. (D) Potential disruptive market volatility against the dollar, with adverse effects on the U.S. and global economies. The longer the large U.S. external deficit continues and the foreign debt increases, the more likely will be a hard landing for the dollar and the U.S. economy as described in principal conclusion 6. This is the most immediate threat, but also the most inclusive because the impact of foregoing points (A) through (C) could be mutually reinforcing to such a market-triggered hard landing when the point of unsustainability of the deficit is reached.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
45
Xtn—Trade deficit bad—soft power The trade deficit decimates soft power by making the U.S. model unattractive and ceding influence to China, reversal of trade policy must come now so its on our terms instead of theirs Roubini and Sester 5- Professor of Economics at the Stern School of Business NYU- Research Associate, Global Economic Governance Programme, University College, Oxford-July/August 2005 (Nouriel and Brad, Foreign Affairs, “How Scary is the Deficit?” http://www.foreignaffairs.org/20050701faresponse84415/brad-setser/how-scary-is-the-deficit.html) There is little doubt that U.S. external debt and the current account deficit are eroding the appeal of the U.S. approach to economic policy, an important element of U.S. "soft power." Asian policymakers, in particular, view U.S. economic policy not as a model but as a problem: the United States' "exorbitant privilege" -- Charles de Gaulle's term for Washington's ability to finance deficits by printing dollars -- comes at their expense. The United States has a particularly delicate relationship with China, which is currently the single biggest buyer of U.S. debt. To date, disagreements on other issues have not prompted China to slow its accumulation of dollar reserves, but that is not to say that it could not happen in the future. The ability to send a "sell" order that roils markets may not give China a veto over U.S. foreign policy, but it surely does increase the cost of any U.S. policy that China opposes. Even if China never plays its financial card, the unbalanced economic relationship between the United States and China could add to the political tensions likely to accompany China's rise. Economic power usually flows to creditors, not debtors. While the United States roams the world looking to sweep up any spare savings to finance its huge deficits, China roams the world looking for new places to invest its surplus savings -- including in oil and gas resources and in states that Washington has judged pariahs. This is a far cry from the early days of the Cold War, when the United States used its surplus savings to finance the reconstruction of its allies, cementing political alliances with strong economic ties. Levey and Brown are right that so far, the world's appetite for U.S. credit has bolstered the U.S. ability to be a global hegemon "on the cheap." The United States exports enough to pay for only two-thirds of its imports; after recent tax cuts, the U.S. government collects enough non-Social Security revenue to cover only two-thirds of its non-Social Security spending. Foreigners made up the difference last year, buying enough U.S. Treasuries to fund the entire budget deficit. But without access to this easy financing from foreign central banks, the U.S. government and the U.S. electorate will have to make the kinds of unpleasant choices they have thus far avoided: among guns, butter, pork, tax cuts, and low interest rates. It is far better for Washington to act now, when it can act on its own terms, than to wait until sharp falls in foreign demand for dollar debt forces it to act. The most important step, of course, is to start cutting the budget deficit rather than just talking about cutting the budget deficit. This will require reversing some recent tax cuts, not just controlling spending. Otherwise, the only way to reduce U.S. demand for foreign savings would be through a sharp decrease in private investment and consumption -- with disastrous consequences for the U.S. economy. The Bush administration has been lucky over the past few years -- the growing value of U.S.-held European assets has kept U.S. external debt from rising, and foreign central banks' willingness to buy U.S. debt has helped keep U.S. interest rates low in the face of large deficits -- but its luck could easily turn. Arguing that deficits -- external as well as domestic -- do not matter does not make them go away. Celebrating the United States' real economic strengths while ignoring the real -- and growing -- economic vulnerabilities associated with unprecedented current account deficits is dangerous.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
46
2nc NAFTA Impact Free flow of energy supplies between the US and Canada is key to sustain NAFTA Laghi, 8 – Brian, Staff Writer, the Globe And Mail, 4/23, “Harper warns U.S. that Canada will bite back on NAFTA” Lexis Prime Minister Stephen Harper issued a warning yesterday to future U.S. leaders wanting to renegotiate the North American free-trade agreement, saying Canada would drive a tougher bargain because of its position as America's biggest energy supplier. Mr. Harper made the comments at the end of a meeting with U.S. President George W. Bush and Mexican President Felipe Calderon, where the three leaders defended NAFTA against attacks from Senators Hillary Clinton and Barack Obama as they seek to become the presidential candidate for the Democratic party. Asked whether it might not be a bad idea to rethink certain aspects of the deal, Mr. Harper said he was ready for any eventuality, but warned that Canada was in a stronger position than when the Canada-U.S. free-trade agreement was negotiated during the 1980s. "We are a secure, stable [energy] supplier. That is of critical importance to the future of the United States," Mr. Harper told reporters at the end of the North American leaders' summit known as the Three Amigos. "If we have to look at this kind of an option, I think, quite frankly, we'd be in an even stronger position now than we were 20 years ago, and we'll be in a stronger position in the future." Mr. Harper said he did not want to reopen NAFTA, but he is not the first Canadian politician to link opening the free-trade deal and energy. International Trade Minister David Emerson did so in February after Mr. Obama and Ms. Clinton criticized NAFTA. The agreement prohibits Canada from cutting oil exports to the United States during worldwide shortages unless supplies are also cut in Canada. The future of NAFTA became a topic of significant discussion in Canada after both Mr. Obama and Ms. Clinton broached the idea of reopening the deal during the Democratic primaries. Ms. Clinton's position on the matter is credited with helping her win the Ohio primary last month and giving her campaign a badly needed boost. Earlier, Mr. Harper and Mr. Calderon were asked whether they have begun to think about how to deal with the new administration that will follow the U.S. presidential election in November. Mr. Harper said he foresees no difficulties and that any incoming president will quickly realize the importance of the trading relationship between the two countries. "I anticipate that Canada will have a very productive relationship with the next administration, because I'm confident that, when the facts are looked at, any president - just as any prime minister of Canada - will quickly conclude how critically important NAFTA and our North American, Canadian-American trade relationship are to jobs and prosperity." Mr. Calderon said Mexico will have a respectful relationship with whoever leads the U.S. Answering an unrelated question on rocketing oil prices, Mr. Bush reminded reporters that Canada and Mexico are the greatest suppliers to the United States and that America is grateful for that. He said that the United States is paying the price for not stepping up exploration. Canadian control of NAFTA is key to maintaining North American competitiveness and prosperity Mintz, 8—Jack, staff writer, the Financial Post, “Don’t Blame NAFTA for U.S. Job Losses” National Post, 4/4, Lexis Nevertheless, after the U.S. election, Canada has a real opportunity to set a new and more exciting agenda for NAFTA negotiations to provide new benefits to all three countries. The Security and Prosperity Partnership initiated in 2005 among the three "Amigos" was only a start to a new framework. Canada could look for a better agreement that improves the net benefits achieved from NAFTA. Easing restrictions on labour mobility, professional standards, regulations and a host of other issues would significantly benefit all three countries. A more integrated market eliminating barriers to the mobility of capital, labour, goods and services would make North America a dynamic, competitive region in a world now characterized by global supply chains. While the United States should be our most important trade relationship, we should be looking at agreements with major trading partners such as Asia and the European Union, rather than marginal agreements with countries of less economic importance. Given the growth of global trade linkages, our aim should be to capture as much value-added in Canada as possible. Canada would not only conclude more trade agreements with other countries but would also be a significant player at the World Trade Organization if we removed obstacles to trade to which other countries have objected. Instead, given our adherence to outdated policies such as agriculture price-support programs and the monopoly Canadian Wheat Board, Canada is marginalized in WTO and bilateral negotiations. It would make sense to protect our position if such measures were of economic benefit to Canada. Instead, price support programs protect milk, chicken and egg producers who charge high consumer prices, hitting most of all the poor. CWB has traded wheat at prices that recent studies have shown to be below the market price in some jurisdictions. Canadians have been free traders going back to the days of our lucrative fur trade. We should continue our tradition of ensuring open borders for trade as we have done under NAFTA. The challenge is to overcome protectionist sentiment in the United States and make sure we continue to benefit from trade with both the U.S. and other major partners. As a resource-rich country, we should press strongly our competitive advantages.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
47
2nc NAFTA Impact That’s key to heg Khalilzad ‘95 (Zalmay, Policy Analyst – Rand, Washington Quarterly, Spring, Lexis) The United States is unlikely to preserve its military and technological dominance if the U.S. economy declines seriously. In such an environment, the domestic economic and political base for global leadership would diminish and the United States would probably incrementally withdraw from the world, become inward-looking, and abandon more and more of its external interests. As the United States weakened, others would try to fill the Vacuum. To sustain and improve its economic strength, the United States must maintain its technological lead in the economic realm. Its success will depend on the choices it makes. In the past, developments such as the agricultural and industrial revolutions produced fundamental changes positively affecting the relative position of those who were able to take advantage of them and negatively affecting those who did not. Some argue that the world may be at the beginning of another such transformation, which will shift the sources of wealth and the relative position of classes and nations. If the United States fails to recognize the change and adapt its institutions, its relative position will necessarily worsen. To remain the preponderant world power, U.S. economic strength must be enhanced by further improvements in productivity, thus increasing real per capita income; by strengthening education and training; and by generating and using superior science and technology. In the long run the economic future of the United States will also be affected by two other factors. One is the imbalance between government revenues and government expenditure. As a society the United States has to decide what part of the GNP it wishes the government to control and adjust expenditures and taxation accordingly. The second, which is even more important to U.S. economic wall-being over the long run, may be the overall rate of investment. Although their government cannot endow Americans with a Japanese-style propensity to save, it can use tax policy to raise the savings rate. Nuclear war Khalilzad ‘95 (Zalmay, RAND Corporation, Losing The Moment? Washington Quarterly, Vol 18, No 2, p. 84) Under the third option, the United States would seek to retain global leadership and to preclude the rise of a global rival or a return to multipolarity for the indefinite future. On balance, this is the best long-term guiding principle and vision. Such a vision is desirable not as an end in itself, but because a world in which the United States exercises leadership would have tremendous advantages. First, the global environment would be more open and more receptive to American values -democracy, free markets, and the rule of law. Second, such a world would have a better chance of dealing cooperatively with the world's major problems, such as nuclear proliferation, threats of regional hegemony by renegade states, and low-level conflicts. Finally, U.S. leadership would help preclude the rise of another hostile global rival, enabling the United States and the world to avoid another global cold or hot war and all the attendant dangers, including a global nuclear exchange. U.S. leadership would therefore be more conducive to global stability than a bipolar or a multipolar balance of power system.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
48
Xtn—Dependence KT NAFTA Canadian exportation of tar sands and oil shales to the US is key to sustaining NAFTA—that’s key to US Canada trade relations Leonard, 8—Andrew, “Canada’s Ferocious NAFTA Growl,” Salon.com, 2/28, Lexis But all this focus on whether the Obama campaign actually fumbled the NAFTA ball in such a spectacular fashion misses the real point, which is the opportunity for a refresher course in U.S.-Canadian trade relations. Question: Who is the largest supplier of energy resources to the United States? Answer: Canada. Canada exports more crude oil to the United States than any other nation, including Saudi Arabia. All of that oil, along with a gusher of natural gas, comes free of any kind of export controls or tariffs, courtesy of NAFTA. In fact, the United States consumes almost 100 percent of Canada's energy exports. Which undoubtedly puts Canada in the driver's seat should a new president of the United States decide he or she wanted to "renegotiate" NAFTA. David Emerson, Canada's trade minister, took some pains to remind Hillary Clinton and Barack Obama of U.S. dependence on foreign (Canadian) oil on Thursday, according to a Globe and Mail story a reader kindly forwarded to me. Americans' privileged access to Canada's massive oil and gas reserves could be disrupted if Washington cancels the NAFTA accord as Democratic presidential candidates threaten, Canadian Trade Minister David Emerson warned yesterday. "There's no doubt if NAFTA were to be reopened we would want to have our list of priorities," he said. In other words, if you Yankees think you can wave a magic wand and "renegotiate NAFTA" so as to be more beneficial to Americans at the expense of Canada's interests, think again, because we'd be happy to close off the oil spigot and sell our crude, to, oh, I don't know, China. Don't mess with Canada! Can also use the cards in the block titled “xtn—dependence KT canadian trade relations”
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
49
2nc NAFTA Impact—Mexican Economy NAFTA is vital to sustaining the Mexican economy Laghi, 8 – Brian, Staff Writer, the Globe And Mail, 4/23, “Harper warns U.S. that Canada will bite back on NAFTA” Lexis "There's not a lot of excess capacity in the world." Mr. Bush also gave a spirited defence of NAFTA, noting that the deal has brought increased wealth to areas such as the U.S.-Texas border. Downgrading NAFTA would cost Mexicans jobs, he said. "When you're able to export in your neighbourhood, it helps to create jobs," he said. Consumers also have more options to buy under free trade, he said. "People who say let's get rid of NAFTA as a throwaway political line must understand this has been good for America." Mr. Calderon said amending the deal could increase the thirst for Mexicans to migrate to the United States. Mexican Economic Collapse would kill the world economy The Dallas Morning News 95 (Nov. lexis) With the exception of 1982 - when Mexico defaulted on its foreign debt and a handful of giant New York banks worried they would lose billions of dollars in loans - few people abroad ever cared about a weak
. This time, the world is keeping a close eye on Mexico's unfolding financial crisis for one simple reason: Mexico is a major international player. If its economy were to collapse, it would drag down a few other countries and thousands of foreign investors. If recovery is prolonged, the world economy will feel the slowdown. "It took a peso devaluation so that other countries could notice the key role that Mexico plays in today's global economy," said economist Victor Lpez Villafane of the Monterrey Institute of Technology. "I hate to say it, but if Mexico were to default on its debts, that would trigger an international financial collapse" not seen since the Great Depression, said Dr. Lpez, who has conducted comparative studies of the Mexican economy and the economies of some Asian and Latin American countries. peso. But now it's different, experts say
Mead 92 – Senior Fellow for US Foreign Policy at Council on Foreign Relations [Walter Russell, “Depending on the kindness of strangers,” New Perspectives Quarterly, Summer, p. 28, Academic Search Elite] If so, this new failure--the failure to develop an international system to hedge against the possibility of worldwide depression--will open their eyes to their folly. Hundreds of millions-- billions--of people around the world have pinned their hopes on the international market economy. They and their leaders have embraced market principles—and drawn closer to the West--because they believe that our system can work for them. But what if it can't? What if the global economy stagnates--or even shrinks? In that case, we will face a new period of international conflict: South against North, rich against poor. Russia, China, India--these countries with their billions of people and their nuclear weapons will pose a much greater danger to world order than Germany and Japan did in the '30s.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
50
2nc NAFTA Impact—Free Trade Extend 1nc Mintz—NAFTA is key to global free trade And, free trade is the only thing between humanity and extinction.
Maclean’s, April 22, 2005, (http://www.macleans.ca/switchboard/columnists/article.jsp? content=20050425_104234_104234) Next time the guy next door goes off on a rant about how free trade is ruining the country and how Ottawa has to do more to protect Canadian jobs, you might want to gently remind him that protectionism and tariffs only lead to higher prices, inefficient industries and a lower standard of living. Or you could just call him a Neanderthal. This approach may not win you many friends, but you'd have history on your side. A new study by economists at Michigan State University, Tilburg University in the Netherlands and the University of Wyoming suggests the Neanderthals may have died out 30,000 years ago in large part because they failed to embrace the principles of free trade. According to the researchers, Homo sapiens figured out how to divide labour and trade goods within and between regions, while the shorter, stronger Neanderthals lived in disorganized, isolated tribes. As a result, the knuckle draggers gradually disappeared from the face of the earth and Homo sapiens went on to create the wonders of the world, such as luxury automobiles, reality TV and the double mochaccino. Granted, this is only one theory among many to explain the extinction of our squat cousins. But the evidence provides some tantalizing food for thought -- especially now, as we grapple with an increasingly hostile environment for cross-border commerce. Throughout the Western world, anti-globalization protests, trade disputes and politically motivated tariff walls are clogging the arteries of commerce. And nowhere is the rise of protectionism more worrying than in that bastion of free enterprise, the United States. All of which leaves Canada with a choice. Option one: we can finally forge new ties with the exploding economic tigers in Asia and diversify our trade. Last week's tentative deal between Enbridge and PetroChina to send up to 200,000 barrels of oil a day overseas is a good step in the right direction. But given that only 1.3 per cent of Canada's exports went to China in 2003, compared to 79.7 per cent heading south, we've got a lot of ground to make up. No country will ever supplant the U.S. as our biggest trading partner, but we desperately need links with other nations to compliment it. Option two? To close our eyes to the changing world. That's the one the Neanderthals chose, and it didn't turn out so well.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
51
Xtn—NAFTA KT free trade Without NAFTA, no new economies will prosper and there will be no global free trade The US Embassy 08 – (July 1, “The Impact Of NAFTA: A US Perspective,” google, http://www.usembassy.at/en/embassy/photo/nafta_frisbie.htm) NAFTA has always been seen by the U.S. government as part of a broader economic and political strategy. Even in transmitting the NAFTA to the U.S. Congress in November 1993, President Clinton noted: "NAFTA is a critical step toward building a new post-Cold War community of free markets and free nations throughout the Western Hemisphere." U.S. trade strategy goes beyond the regional to the global level. The U.S. proposal last year in the World Trade Organization on agricultural liberalization, our recent proposal on industrial liberalization, and our exchange of proposals on services illustrate that strategy. The United States sees regional integration as a valuable, and perhaps essential, step towards the goal of global liberalization. As countries and enterprises become more comfortable with liberalization at the bilateral or subregional level, they gain confidence in opening their economies at the global level. We see subregional agreements such as NAFTA as steps on the road toward global free trade. That is also the way in which we view our recently concluded free trade agreement with Chile, the negotiations underway for a free trade agreement with Central America, and negotiation of a hemisphere-wide Free Trade Area of the America. The Bush Administration's approach is to negotiate simultaneously at the global level through the World Trade Organization, as well as at the regional, subregional and bilateral levels. This creates a constructive competition for liberalization among our trading partners. We believe the various negotiations are mutually reinforcing. NAFTA is key to global relations, free trade, and US security policy The US Embassy 08 – (July 1, “The Impact Of NAFTA: A US Perspective,” google, http://www.usembassy.at/en/embassy/photo/nafta_frisbie.htm) The United States sees regional integration as a valuable, and perhaps essential, step towards the goal of global liberalization. As countries and enterprises become more comfortable with liberalization at the bilateral or subregional level, they gain confidence in opening their economies at the global level. We see subregional agreements such as NAFTA as steps on the road toward global free trade. That is also the way in which we view our recently concluded free trade agreement with Chile, the negotiations underway for a free trade agreement with Central America, and negotiation of a hemisphere-wide Free Trade Area of the America. The Bush Administration's approach is to negotiate simultaneously at the global level through the World Trade Organization, as well as at the regional, subregional and bilateral levels. This creates a constructive competition for liberalization among our trading partners. We believe the various negotiations are mutually reinforcing. The Bush Administration also sees strong connections between our economic and security policies. Economic strength and resiliency are the foundation of our national security. The U.S. national security strategy includes as one of its priorities that we must advance global prosperity by expanding trade and investment between nations. By strengthening the economic ties between the U.S. and its partners around the world, trade agreements encourage reforms that promote long-term development, open societies and ultimately democracy and global cooperation. Two other economic dimensions of the U.S. national security strategy are: first, that we must make not only the U.S. but the global economy more resilient to economic shocks, and second, that we must help poor nations participate fully in the rising tide of prosperity. A year ago, at the Financing for Development Conference in Mexico, President Bush said: "The advance of development is a central commitment of American foreign policy." The United States is working in many ways to fulfill that commitment, through our trade policy as I noted above, but also through our aid programs and support for multilateral economic cooperation. One new facet of our overall development strategy is President Bush's proposal for the Millennium Challenge Account. This proposed $5 billion new aid program will focus on rewarding pro-growth policies in developing countries. It is built on the indisputable fact that sustainable poverty reduction can only be achieved through economic growth and improved productivity, which in turn depend on the accumulation of capital and technology. Key to poverty reduction, therefore, is the elimination of impediments to increased investment and the spread of technology - especially poor governance, weak health and education system, and excessive restrictions on economic transactions. Aid under the MCA will be directed to poor countries that are making real improvements in their performance in these three areas, and the program will include specific ways of measuring concrete results.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
52
2nc NAFTA Impact—Democracy NAFTA is key to promote democracy, environmental laws, relations, and socially productive citizens The US Embassy 08 – (July 1, “The Impact Of NAFTA: A US Perspective,” google, http://www.usembassy.at/en/embassy/photo/nafta_frisbie.htm) One of the most innovative aspects of NAFTA has been the impact on the environment and on labor standards. You will recall that the three NAFTA partners, at the urging of the United States, signed "side agreements" in these two areas. Through the North American Agreement on Environmental Cooperation, the partners are promoting effective enforcement of each country's environmental laws. The Commission for Environmental Cooperation fosters the development of regional information and technical expertise, and implements trilateral cooperative programs in such areas as sustainable agricultural production, control of dangerous chemicals, development of environmental guidelines for businesses, and strategies for conservation of natural ecosystems. In addition, the United States and Mexico cooperate through the Border Environment Cooperation Commission and the North American Development Bank to develop and finance environmental infrastructure in the U.S.-Mexico border area. More than 40 projects are now complete or underway, with an aggregate cost of approximately $1 billion, and serving about 9 million residents in the border regions. And more projects are in development. Through the North American Agreement on Labor Cooperation, the NAFTA partners have created mechanisms for cooperative activities, as well as for independent evaluations and dispute settlement related to the enforcement of labor laws. Public submissions made under this agreement have led to public hearings, ministerial consultations, and action plans to address problems raised in the submissions. In addition, NAFTA partners have established cooperative programs on industrial relations, health and safety, child labor and migrant workers issues. The impact of NAFTA is particularly dramatic on the political relationship between the United States and Mexico. For Mexico, NAFTA represented a turning point. By committing itself to outward looking, market-based economic policies, Mexico not only gained guaranteed comprehensive duty-free preferential access to the largest market in the world, it also transformed its relationship with its neighbor. Mexico's long history of distrust and resentment of the U.S., while certainly not eliminated, has definitely been mitigated. The new economic partnership with the U.S. coincided with and reinforced the political modernization underway in Mexico over the past generation. The election of Vicente Fox, the first non-PRI party president in modern Mexican history, was an important step in that modernization. The rule of law, transparency in government, broader participation by citizens in the political process, and greater freedom from central state regulation - all are values important to democracy and development, and all are values promoted and reinforced by NAFTA. NAFTA also enabled Mexico to bounce back from its 1994 financial crisis and launched the country on the path of becoming a global economic competitor. This economic resiliency and its growing economic influence have given Mexico a new international self-confidence and prominence. Starting next week, Mexico will serve as host of the negotiations toward a Free Trade Area of the Americas, scheduled to conclude in 2005. It will host the G-20 this year, and in September will host the important WTO Ministerial meeting in Cancun - all signs of the respect the world holds for Mexico's growing economic importance (not to mention Mexico's now decade-old membership in the OECD). Global democratic consolidation is essential to prevent many scenarios for war and extinction. Diamond, 95 (Larry Diamond, senior fellow at the Hoover Institution, December 1995, Promoting Democracy in the 1990s, http://wwics.si.edu/subsites/ccpdc/pubs/di/1.htm) OTHER THREATS This hardly exhausts the lists of threats to our security and well-being in the coming years and decades. In the former Yugoslavia nationalist aggression tears at the stability of Europe and could easily spread. The flow of illegal drugs intensifies through increasingly powerful international crime syndicates that have made common cause with authoritarian regimes and have utterly corrupted the institutions of tenuous, democratic ones. Nuclear, chemical, and biological weapons continue to proliferate. The very source of life on Earth, the global ecosystem, appears increasingly endangered. Most of these new and unconventional threats to security are associated with or aggravated by the weakness or absence of democracy, with its provisions for legality, accountability, popular sovereignty, and openness. LESSONS OF THE TWENTIETH CENTURY The experience of this century offers important lessons. Countries that govern themselves in a truly democratic fashion do not go to war with one another. They do not aggress against their neighbors to aggrandize themselves or glorify their leaders. Democratic governments do not ethnically "cleanse" their own populations, and they are much less likely to face ethnic insurgency. Democracies do not sponsor terrorism against one another. They do not build weapons of mass destruction to use on or to threaten one another. Democratic countries form more reliable, open, and enduring trading partnerships. In the long run they offer better and more stable climates for investment. They are more environmentally responsible because they must answer to their own citizens, who organize to protest the destruction of their environments. They are better bets to honor international treaties since they value legal obligations and because their openness makes it much more difficult to breach agreements in secret. Precisely because, within their own borders, they
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
53
respect competition, civil liberties, property rights, and the rule of law, democracies are the only reliable foundation on which a new world order of international security and prosperity can be built.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
54
Xtn—Dependence KT US-Canada Trade Relations Continued investment in Canadian resources makes US-Canada trade sustainable McCain, 8 – Senator John McCain, Presidential Candidate, CNN, McCain speech on relationship between U.S. and Canada, 6/27, Lexis We must also work to ensure reliable energy supplies and increase sources of renewable energy. As you all know, Canada is America's largest energy supplier. Not only does Canada have the second largest proven oil reserves in the world, 60 percent of the energy produced in Canada is hydroelectric, clean energy. We stand much to gain by harmonizing our energy policies, just as have gained by cooperating in trade through NAFTA. Since NAFTA was concluded, it has contributed to strong job growth and flourishing trade. Since the agreement was signed, the United States has added 25 million jobs and Canada more than 4 million. Cross-border trade has more than doubled since NAFTA came into force. We have established North America as the world's largest economic market and the integration of our economies has led to greater competitiveness of American and Canadian businesses. Because of our common market, our workers are better able to compete, and to find opportunities of their own in the global economy.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
55
AT: NAFTA Bad—Job Loss/Econ No link—NAFTA has been misunderstood as the trigger for economic problems in the US Mintz, 8—Jack, staff writer, the Financial Post, “Don’t Blame NAFTA for U.S. Job Losses” National Post, 4/4, Lexis Much of the criticism in the United States regarding NAFTA is misdirected. NAFTA is being blamed for U.S. trade deficits, illegal immigrants from Mexico and the suppression of wages and unemployment in the United States as a result of competition from low-wage economies. The truth is that many of the economic problems faced by the United States have little to do with NAFTA. The 2007 U.S. trade deficit of $709US-billion has grown as a result of Asian and petroleum trade, rather than trade with NAFTA partners. The largest trade deficit is with China, accounting for 30% of the total deficit, with another 15% being with other Pacific Rim countries. The trade deficit with OPEC countries is close to 22% of the total deficit and the shares with Canada and Mexico are 9% and 7% respectively, mostly due to oil imports. Whether any of this translates into job losses in the United States is another matter. The U.S. unemployment rate has been exceptionally low since 1994 and exports to Mexico alone have tripled since 1994. Recent U.S economic problems are the result of credit market difficulties, not trade. As for illegal Mexican immigration, NAFTA is irrelevant since the agreement did not provide for free mobility among the three countries, except for an easier approach for legal NAFTA mobility. Given that the arguments against NAFTA are so weak, it is hard to understand what a future U.S. leader might want to revisit. It would seem any negotiation taken on by the United States would end up as a minor affair, since the agenda to fix up problems under NAFTA is so light.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
56
2nc Canada Relations Impact Sustaining US-Canadian relations depends upon continued energy trade McKenna, 8 – Barrie, staff writer, the Globe and Mail, “Is Obama right for Canadians?; Experts say trade, energy and economic ties to the U.S. could suffer for Canada under Democrat leader” 6/9, lexis At a time of recession, worries among the American public are always heightened," he said. John McCain, the presumptive Republican candidate, on the other hand, is a staunch advocate of free trade. Another potentially thorny issue for the two countries is energy. Canada is the United States's largest foreign supplier of crude oil, as well as natural gas and electricity. If the United States gets serious about curbing its oil imports and cutting carbon emissions, it could have a profound impact on Canada, and particularly Alberta, argued Christopher Sands, who follows Canada-U.S. relations for the Hudson Institute in Washington. "If Obama is elected, Alberta will have a real challenge," Mr. Sands said. "They'll need to make the case that oil is plentiful and that it can be a lot cleaner." He likened the challenges facing the oil sands to the intense U.S. resistance Hydro-Quebec faced to its hydroelectric projects in northern Quebec in the 1980s. "There [is] a campaign in the U.S. to stigmatize the oil sands," he said. "It's going to take a real push back to counter that." No matter who wins in November, Ottawa is likely to face challenges over the border. US-Canada relations are key to NORAD effectiveness. Christuik, 08 (Karen Christuik, writer for the Canadian Air Force. “Celebrating 50 Years of NORAD” http://www.airforce.gc.ca/site/newsroom/news_e.asp?cat=114&id=6161) "There are no two nations like Canada and the United States that have agreed to protect each other's air space and sovereignty. When you consider the support that NORAD provides and the threats in so many domains that it counters, it is a truly outstanding relationship." Today, May 12, 2008 marks the 50th anniversary of the most significant military agreement between Canada and the US, an agreement that saw the creation of NORAD. Although originally created during the Cold War to defend North America against possible air invasion, NORAD has evolved considerably since then, particularly in response to the 2001 World Trade Center attacks. Most military personnel know NORAD as the entity that provides aerospace warning and aerospace control for North America through the command centre at NORAD-US Northern Command (USNORTHCOM) in Colorado Springs, Colo., and at three regional headquarters
Canadians play a major role in NORAD," says Major Jason Proulx, Assistant Deputy at NORADUSNORTHCOM Public Affairs. "When you look at a map that shows the NORAD airspace, you will notice that the Canadian region comprises the largest area to cover and protect - nearly 10 million square kilometres. This air coverage is particularly vital in less populated areas such as Canada's Arctic." Unquestionably, the NORAD of today is vastly different from what it was 50 years ago. In those days, in Winnipeg,Alaska and Florida. "Through [the Canadian NORAD Region at 17 Wing Winnipeg],
one of Canada's main contributions was the Distant Early Warning (DEW) Line, a massive engineering marvel of radar stations that stretched across the Arctic and remained in operation for 30 years. Two other radar systems (the Pinetree Line and the Mid-Canada Line) worked in conjunction with the DEW Line as additional sites for detection. For air defence fighter aircraft, Canada relied on nine Royal Canadian Air Force squadrons headquartered at Air Defence Command in Saint-Hubert, Que. According to Joseph T. Jockel, director of Canadian Studies at St. Lawrence University in Canton, N.Y. and author of a recent book on NORAD's history, one reason for the large number of fighter squadrons was because many people believed that if an air defence battle occurred in North America, it would take place over southern Canada. "Then, the threat shifted to missiles," explains Mr. Jockel, "and NORAD turned into more of a warning and assessment command. That is still one of its key roles - warning and assessing." One person who can speak with first-hand knowledge about the post-September 11 changes to NORAD, and the new spotlight on homeland security, is Colonel Christopher Coates, the current director of operations for 1 Canadian Air Division/Canadian NORAD Region. "We've developed procedures and means to look inward to extend our air defence capabilities over the continent," says Col Coates. "Operationally, our protection used to start at the edge of our continent, and we focused outward, trying to keep the threats at a distance." With its long and complicated history, and new threats occurring continually throughout the world, it is difficult to imagine what NORAD will look like in the next 50 years. Nonetheless, with the backbone of the first five decades behind us, the future of NORAD
"NORAD is more relevant today than ever as an interdiction force against multi-layered threats," says Gen Renuart. "Its foundation is a relationship based on sincere friendship, shared values and mutual respect. Canada has been a committed ally of the United States, and the bond of NORAD is an example of that." definitely looks bright for both Canada and the US
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
57
2nc Canada Relations Impact NORAD is key to preventing a terrorist attack against the US Miles,7 (Donna Miles, American Forces Press Service “NORTHCOM, NORAD Working to Ensure Terror Plots Against Homeland Fail.” http://terrorism-online.blogspot.com/2007/07/northcom-norad-working-to-ensure-terror.html) Officials at U.S. Northern Command are "keenly aware" of information within the newly released National Intelligence Estimate and are committed to working to ensure terrorists don't succeed in attacking the United States, a NORTHCOM official said. A declassified version of the report released yesterday notes that Islamic terrorist groups, particularly al Qaeda, are likely to remain a persistent threat to the U.S. homeland over the next three years. The report paints a picture of terrorists' "undiminished intent to attack the homeland." "We assess that al Qaeda's homeland plotting is likely to continue to focus on prominent political, economic and infrastructure targets with the goal of producing mass casualties, visually dramatic destruction, significant economic aftershocks and/or fear among the U.S. population," the report states. NORTHCOM, the Defense Department's lead agency for homeland defense, is working closely with the Department of Homeland Security and other partners to "deter and disrupt, and if necessary, confront any planned attack against the homeland," said Michael Kucharek, a spokesman for NORTHCOM and North American Aerospace Defense Command. The command is "focused on ensuring that we disrupt and defeat those who wish to kill innocent civilians by any means possible," he said. NORTHCOM maintains a representative in the National Counterterrorism Center and is connected to more than 150 operation centers throughout the United States, Kucharek explained. This network continuously evaluates all credible intelligence information to establish appropriate response force posture levels and force protection levels for Defense Department installations nationwide, he said. Meanwhile, "U.S. Northern Command has directed all subordinate commands to increase their vigilance, to take precautionary actions and to review their local force protection procedures," he said. Due to security considerations, the command does not discuss the specific types of security measures it is taking. NORAD, the U.S.-Canadian command that provides aerospace warning and control for North America, is a key player in that effort. NORAD is "standing vigilant to protect our homelands from any emerging threat by working in close cooperation and coordination with our partners in the U.S. and Canada and their respective government agencies," Kucharek said. Eight intelligence organizations within the Defense Department contributed to the National Intelligence Estimate: the Defense Intelligence Agency, National Security Agency, National Geospatial-Intelligence Agency, National Reconnaissance Office, and Army, Navy, Air Force and Marine Corps intelligence. Extinction Sid-Ahmed ’04 (Mohamed, Al-Ahram Weekly, “Extinction!” http://weekly.ahram.org.eg/2004/705/op5.htm) What would be the consequences of a nuclear attack by terrorists? Even if it fails, it would further exacerbate the negative features of the new and frightening world in which we are now living. Societies would close in on themselves, police measures would be stepped up at the expense of human rights, tensions between civilisations and religions would rise and ethnic conflicts would proliferate. It would also speed up the arms race and develop the awareness that a different type of world order is imperative if humankind is to survive. But the still more critical scenario is if the attack succeeds. This could lead to a third world war, from which no one will emerge victorious. Unlike a conventional war which ends when one side triumphs over another, this war will be without winners and losers. When nuclear pollution infects the whole planet, we will all be losers.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
58
AT: Canada backlashes to NORAD No risk of Canadian backlash on NORAD – they’re too dependent on collaboration with the US military. Battis, 07 (Samir Battis, researcher and lecturer at the Canada Research Chair in Canadian Foreign and Defence Policy at the University of Quebec. “BMD, NORAD, and Canada-US Security Relations” http://www.ploughshares.ca/libraries/Briefings/brf044.pdf) As important before as during the Cold War, the defense relationship between Canada and the United States remains important after. But every time Canada takes a position that may be seen in Washington as having a material impact on U.S. national interest, this decision must be made very carefully18 to not affect its owns. As written above, according to the key strategic documents (1994 Defense White Paper, 2005 Defense Policy Statement) Canadian memberships in the North Atlantic Treaty Organization (NATO) and the North American Aerospace Defense (NORAD) are considered as the main pillars of Canadian military security. From a Canadian perspective, to have allies to rely on ensures Canada’s defense, which has relatively small military weight and, consequently, limited ability to defend itself. In regional security area, the Canadian government declared: “Our defense relationship with the US is key for the security of Canadians. Canada’s longstanding cooperation with the US through the Permanent Joint Board on Defense and NORAD has enabled us to share the security burden for North America at a significantly lower cost and with more effectiveness that Canada could achieve on its own.19” These statements point out the Canadian dependence in global and regional relationships to ensure its own security. Further more, with theUnited States at its side; Canada is in the situation to reach a high degree of security, higher than which it could expect to achieve on its own. As written before, such a posture was already adopted since 1940 Ogdensburg Agreement20 and appears in the 1994 White Paper which quotes: “A longstanding principle of Canadian defense policy is that defending Canada is best done in a collaborative manner with the United States. Canada and the United States rely on each other for help in protecting their territory and approaches. If this collaboration is not maintained, the United States will defend the continent on its own, leaving Canada without the influence we currently enjoy as a result of this defense partnership.”
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
59
Xtn—Dependence KT US-Canada Trade Relations US processing of Canadian tar sands is vital to stimulate US-Canadian trade relations National Post, 5 – “Tar Sands Seen as Reliable Source,” March 24, 2005, Lexis "We appreciate the fact that Canada's tar sands are now becoming economical and we are glad to be able to get the access toward a million barrels a day headed toward two million barrels a day. That's, by the way, an advantage for open trade." There is more oil in Alberta's tar sands than in Saudi Arabia, and recent new technologies developed by both Canada and the United States have helped reduce the price of extracting that oil. US-Canadian trade relations are kept sustainable by oil investments McCain, 8 – Senator John McCain, Presidential Candidate, “John McCain on Energy for a Secure Nation” States News Service, 6/23, Lexis The Formation Of The OPEC Cartel And The Oil Embargo Of The 1970s Demonstrated Our Vulnerability. At the time of the oil embargo, we imported roughly one third of our oil. Today, we import almost two-thirds. Since 1973, the United States has gone from importing 6 million barrels of oil a day to 12 million barrels per day with petroleum payments comprising 41 percent of the U.S. trade deficit ($293 billion of $759 billion). While Our Dependence On Foreign Oil Does Support Our Enemies, The United States Relies On Canada And Mexico -- Our Democratic Friends And NAFTA Partners -- For Much Of Our Oil. America imports about one third of its oil from Canada and Mexico. When politicians threaten to renegotiate NAFTA unilaterally, they threaten to disrupt relations between the United States and our most stable and friendly providers of oil. These politicians also forget that Canada is the most important export market for 36 of our 50 states.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
60
Xtn—Dependence KT US-Canada Trade Relations US dependence on Canadian energy is key to sustaining trade relations with Canada Robertson, 8 – Lloyd, Reporter for CTV Television, “North American Leaders Summit” 4/22, Lexis LLOYD ROBERTSON: Prime Minister Stephen Harper laid a trump card on the table at the North American leaders' summit in New Orleans today. It came on the final day of his meetings with US President George Bush and Mexican President Felipe Calderon. All three leaders agree now is not the time to renegotiate the free trade deal. But Harper says if the deal is reopened, Canada would be in the strongest bargaining position because of American dependence on Canadian energy. CTV's Ottawa bureau chief Robert Fife has more. ROBERT FIFE (Reporter): The three leaders planted a tree in Lafayette Square to mark earth day. They chowed down on a breakfast of grits, and they met business leaders to talk about speeding the flow of commerce across the security-tight US border. But the elephant in the room was American Presidential politics and the rise of US protectionism. GEORGE W. BUSH (US President): I'm concerned about protectionism in America. FIFE: Democratic contenders Barack Obama and Hillary Clinton have been using North American free trade as a whipping post. BUSH: Now is not the time to renegotiate NAFTA or walk away from NAFTA. Now is the time to make it work better. FIFE: The Prime Minister says he's convinced the next president, Democratic or Republican, will see the benefits of a trade pact that accounts for $1 trillion of annual three way trade. But Stephen Harper says Canada will be in the driver's seat if NAFTA is reopened. That's because Canada is America's biggest supplier of oil and gas. STEPHEN HARPER (Canadian Prime Minister): That is of critical importance to the future of the United States, and if we had to look at this kind of an option, I think quite frankly, you know, we would be in an even stronger position now than we were 20 years ago. FIFE: This is Bush's fourth and final summit of the three amigos. And unlike past summits, there were few protesters. UNIDENTIFIED MAN: We are under attack! FIFE: President Bush started these summits in 2005, but he is now in the twilight of his presidency, and the prime minister is under domestic pressure to return to the days of one-on-one meetings with the president where there can be a greater focus on Canadian concerns. Robert Fife, CTV News, New Orleans.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
61
2nc Canadian economy impact Tar sand investment is vital to sustain the Canadian and US economies Timmins Daily Press, 2 “US Can’t have it Both Ways,” 1/14/2002, The daily press, Lexis l One of the best ways to reduced dependency on the Middle East, he said, is to develop the massive, untapped resources of Western Canada. l The Alberta Tar Sands has more reserves than there's oil in Alberta. In addition, he said untapped resources in British Columbia, the Yukon and the Northwest Territories could go a long way to fuel the energy-dependent economies of the United States and Canada. Paul Cellucci, the dynamic U.S. ambassador to Canada, has some some terrific ideas. Unfortunately some of them are half-baked. A case in point is Cellucci's address to the Vancouver's business community Friday night where he won support for his excellent suggestion North America must become more energy independent. By not being so dependent on the Middle East for energy, the economies of the United States and Canada would be much better off, the ambassador suggested. And one of the best places to start at developing energy independence is Western Canada, he said. "It is clear that we must reduce dependence on Middle Eastern energy," Cellucci told about 200 delegates to the Vancouver Board of Trade. "It is clear that the economies of the United States and Canada are inextricably linked. "Therefore, we must make sure that energy is available to keep the economies of both of these countries growing." Cellucci gushed about the massive oil and gas reserves as well as the abundant sources of hydro in British Columbia. He praised the untapped resources in the Northwest Territories and the Yukon before moving on to Alberta. "The tar sands of Alberta offer huge potential," Cellucci said. "There's more reserves there of oil than in Saudi Arabia." On the surface, this all sounds wonderful. Billions of dollars will be spent developing Western Canada's energy resources, tens of thousands of jobs will be created, the Canadian and U.S. economies will boom and the two countries will no longer dependent on the volatile Middle East for oil. But, hold it. According to a Canadian Press report, Cellucci is ice cold to the idea of linking sales of energy with the export of other goods, notably softwood lumber. And this at a time when thousands of Canadian forestry workers have been tossed out of work because of sky-high tariffs placed by the Americans. Mr. Cellucci, you can't have it both ways. It's clear your country wants our energy but not our forestry products, even when our workers can produce than more cheaply than your's. Ottawa had better not fall for it. Economic decline causes Quebec secession. Donald E. Nuechterlein, September 1999. Rockefeller Research Scholar at the University of California, Berkeley. “CANADA DEBATES A VARIETY OF DOMESTIC ISSUES,” http://donaldnuechterlein.com/1999/canada.html. Current opinion polls in Quebec show that pro-independence forces are somewhat below the 50 percent margin that would trigger formal negotiations with the rest of Canada on the terms of separation. The current premier, Lucien Bouchard, is a crafty nationalist who will not put the question to another referendum unless he is convinced it will obtain a majority vote. My guess is that if Bouchard has doubts about reaching at least 50 percent in favor of independence, he will first call a provincial election and hope to increase the majority of his Parti Quebecois. That would give him more confidence about winning a referendum. An important factor influencing many Quebeckers will be their degree of satisfaction with the Canadian economy. At present, prosperity reigns in most parts of the country and many Quebec voters may worry that their province will suffer economically if it separates.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
62
2nc Canadian economy impact This sets a global model for separatism. Stephane Dion, 11/21/1997. Canadian Minister of Intergovernmental Affairs. “Canada is Going to Make it After All,” http://www.pcobcp.gc.ca/aia/default.asp?Language=E&Page=PressRoom&Sub=Speeches&Doc=19971121_e.htm. In a recent article in the Boston Globe, Lester C. Thurow of the Massachusetts Institute of Technology wrote that in the new global economy, smaller states are becoming more viable than they once were, so "everyone feels much freer to opt out of big countries and create more homogenous small countries", including Quebec, which "doesn't need the rest of Canada economically." Actually, John McCallum of Canada's Royal Bank estimates that trade between two Canadian provinces is, on average, 14 times greater than trade between a Canadian province and an American state after adjustments are made for the size of the market and the distance involved. Moreover, provinces within Canada benefit from the stabilization provided by equalization and other transfer payments. Borders matter. And clearly there is much more involved in a secession than economics. Secession would be economically bad for Quebec, but it would also be morally wrong and, from a practical point of view, it would be a mess. Secession is an extreme solution, one of the most divisive acts possible in a society. The secession of Quebec would not only break up Canada. It would pit Quebecers against Quebecers, and breed intolerance in what is a very tolerant and open society. In a country as democratic, as rich, as successful and as respectful of diversity as Canada, there is nothing to justify secession. And it would send the wrong signal to the world. Canada has been a model to the world in terms of its ability to accommodate -- and celebrate -- diversity. But secession would set an unfortunate precedent. According to Daniel Elazar of Temple University in Philadelphia, there are currently some 3,000 human groups who are conscious of a collective identity. And yet
there are only 185 states recognized by the UN. The belief that every society with its own distinctive character should become a state could clearly wreak havoc on this planet. You, as Americans, with your burden of responsibilities in the world, especially want Canada to stay united. Quebec is not a failure, Canada is not a failure -- but secession would be. In the next century, when the main challenge of many states will be how to have different populations living together, Canada will be needed more than ever as a model of tolerance and openness. If we fail to preserve our unity, we will send a very sad signal to the rest of the world -- the message that even a country as blessed by fortune as Canada cannot successfully bring together populations with different languages and backgrounds. global nuclear war. Kamal Shehadi, December 1993. Research Associate at the International Institute for Strategic Studies. Ethnic Self Determination And the Break Up of States, p. 81. This paper has argued that self-determination conflicts have direct adverse consequences on international security. As they begin to tear nuclear states apart, the likelihood of nuclear weapons falling into the hands of individuals or groups willing to use them, or to trade them to others, will reach frightening levels. This likelihood increases if a conflict over selfdetermination escalates into a war between two nuclear states. The Russian Federation and Ukraine may fight over the Crimea and the Donbass area; and India and Pakistan may fight over Kashmir. Ethnic conflicts may also spread both within a state and from one state to the next. This can happen in countries where more than one ethnic self-determination conflict is brewing: Russia, India and Ethiopia, for example. The conflict may also spread by contagion from one country to another if the state is weak politically and militarily and cannot contain the conflict on its doorstep. Lastly, there is a real danger that regional conflicts will erupt over national minorities and borders.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
63
2nc—Canadian Economy Impact—US Economy Canada is key to the US economy—they are the largest trading partner. Robert Pastor, June/July 2008. Professor at and Founding Director of the Center for North American Studies at American University. “The Future of North America,” Foreign Affairs, http://www.foreignaffairs.org/20080701faessay87406/robert-a-pastor/the-future-of-north-america.html.
On January 20, 2009, if not before, a new national security adviser will tell the incoming president of the United States that he first two international visitors should be the prime minister of Canada and the president of Mexico. Almost every new president since World War II has followed this ritual, because no two countries in the world have a greater impact economically, socially, and politically on the United States than its neighbors. The importance of Canada and Mexico may, however, come as a surprise to most Americans, as well as to the new president. In the presidential campaign, instead of discussing a positive agenda for North America's future, the candidates have focused critically on two parts of that agenda, the 14-year-old North American Free Trade Agreement (NAFTA) and immigration. And overall, one could conclude from listening to the campaign that Iraq is key to U.S. national security, China is the United States' most important trading partner, and Saudi Arabia and Venezuela supply most of the United States' energy. None of these propositions is true. For most of the past decade, Canada and Mexico have been the United States' most important trading partners and largest sources of energy imports.
U.S. national security depends more on cooperative neighbors and secure borders than it does on defeating militias in Basra.
Canada key to US economy. State Department, September 2007. “Background Note: Canada,” http://www.state.gov/r/pa/ei/bgn/2089.htm. The U.S. and Canada enjoy an economic partnership unique in the world. The two nations share the world's largest and most comprehensive trading relationship, which supports millions of jobs in each country. In 2006, total trade between the two countries exceeded $500 billion. The two-way trade that crosses the Ambassador Bridge between Detroit, Michigan and Windsor, Ontario equals all U.S. exports to Japan. Canada's importance to the U.S. is not just a border-state phenomenon: Canada is the leading export market for 36 of the 50 U.S. States, and ranked in the top three for another 4 States. In fact, Canada is a larger market for U.S. goods than all 27 countries of the European Community combined, whose population is more than 15 times that of Canada. The comprehensive U.S.-Canada Free Trade Agreement (FTA), which went into effect in 1989, was superseded by the North American Free Trade Agreement among the United States, Canada and Mexico (NAFTA) in 1994. NAFTA, which embraces the 443 million people of the three North American countries, expanded upon FTA commitments to move toward reducing trade barriers and establishing agreed upon trade rules. It has also resolved long-standing bilateral irritants and liberalized rules in several areas, including agriculture, services, energy, financial services, investment, and government procurement. Since the implementation of NAFTA in 1994, total two-way merchandise trade between the U.S. and Canada has grown by 250%, creating many new challenges for the bilateral relationship. The Security and Prosperity Partnership of North America, launched by the three NAFTA countries in March 2005, represents an effort to address these challenges and others on a continental basis.
Canadian economy key to US economy Clifford Krauss, 10/8/2004. Author of “Inside Central America: Its People, Politics and History.” “Canada Economy Grows Where Others Falter,” New York Times, lexis.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 64 7 week seniors It only takes one look at this city's fast-changing skyline to see that Canada is defying the slowdown throttling much of the world economy. From Vancouver to Regina to Toronto to Montreal, cranes and earth-moving equipment are roaring at a rate not seen since the 1980's, creating high-rise condominiums in city centers, new single-family houses in the ever-sprawling suburbs, and tens of thousands of well-paying jobs. The building boom is a primary reason the frequently underperforming Canadian economy now has the fastest growth rate among the major industrial countries. Government statistics released last week showed that Canada's economy grew at a 5 percent annual rate in July, the 10th consecutive month of improving economic performance. In a new report, the International Monetary Fund forecast growth for the full year at a less torrid 3.4 percent pace, and the same in 2003 -- still, a more robust performance than in the United States. The cheerful statistics, and expectations of a big budget surplus to go with them, amount to a windfall for the governing Liberal Party at a time when infighting and cabinet scandals have forced Prime Minister Jean Chrétien to drop thoughts of running for a fourth term. He is due to step down as party leader in early 2004, but his general economic policy line has support from several of his potential Liberal successors. With 400,000 new jobs created over the last year, and unemployment declining, the Liberals expect to remain strong with their working-class voter base. They also expect to reverse the cutbacks of the 1990's and expand services. Just last week Mr. Chrétien announced that next year's budget would include new spending on urban low-income housing, health care and transportation, national parks, education and programs to aid the impoverished Indian population. The spending should ease the way for the next Liberal leader to defeat a badly divided opposition. Canada's good economic fortunes may also prove
helpful to the slowing United States economy, given that Canada buys 25 percent of all American exports.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
65
Xtn—oil sands key to Canadian economy Oil sands are key to the canadian economy Derek Brower, 1/31/2008. “Alberta’s Oil Rush,” Prospect Magazine, Lexis. But one effect of the $100 barrel is to make alternative sources of energy-and of oil-more economically viable. The discovery of the giant Tupi oil field off the Brazilian coast last November is a perfect example. Drilling in deep water to look for oil in the "pre-salt," a geological formation that has scarcely before been tapped, was only undertaken because the current high price of oil makes such expensive operations attractive to companies. Tupi could be the tip of a very large offshore field. But the biggest beneficiary of the high oil price has been Canada and its oil sands. As an unconventional source, the oil sands were until recently simply too costly to bother with. As recently as the mid-1990s, extracting a barrel of oil from the tar cost around $35. When oil prices were hovering around $10 a barrel at the end of the last century, the few companies involved in the oil sands were making a loss. That forced the developers to cut their expenses and become more efficient. This wasn't easy, because extracting the bitumen from beneath the muskeg and turning it into something that fuels an engine or makes a plastic is an expensive and energy-intensive process. For now, most of the tar extraction takes place near the surface, which allows it to be mined. Huge cutters tear up the topsoil, using enough electricity to power a city of 40,000. The tar beneath is dumped into 400-tonne trucks that haul their load to nearby plants where the oil sand is mixed with hot water to create a slurry, which is then separated into sand, water and bitumen. Refineries can't handle the heavy bitumen, so first it goes to upgrading plants where its molecules are reorganised and some of the impurities-like the sulphur that gets left to rot under the open sky-are removed to leave synthetic crude. It is this "syncrude" that is then exported and refined into oil products like fuels and plastics. The oil companies have whittled this process down to one that costs them $15-20 a barrel. And with long-term oil price futures trading at over $80 a barrel, the oil sands are now very
profitable. Every major oil company is under pressure to replace its reserves. Outside of Canada, that has become tough. Operating in other big oil-producing countries has in recent years become far riskier politically, as the balance of power has shifted away from "big oil" to energy-rich governments. So now the companies are flocking to Alberta. BP, the only large western oil company that seemed wary of the oil sands, recently joined the rush. Shell has bought control of its local subsidiary. The companies that operate in the oil sands say they will spend some $100Cbn (roughly £50bn) there in the next decade. That should increase output to 4m barrels a day in 2020, compared with 1.3m barrels a day now. The charge to the oil sands has turned Fort McMurray, once a trading post but now the centre of the boom, into the kind of frontier town northern Canada last saw during the days of the Klondike gold rush. The population of "Fort McMoney," as some call it, could grow to more than 120,000 in the next few years from around 40,000 in the early 1990s. For a town where the temperatures range from -40 degrees Celsius on a winter's day to +40 in the summer, that is some achievement. The climate isn't the only thing that is extreme about "Murray." "It gets wild," one local told me when I was there. "Guys spend hundreds of dollars a night on booze and drugs. And they fight." Casinos and prostitutes have followed the money to the city. Property prices are among the highest on the North American continent-if somewhere to live can be found at all. Drive for long enough on the clogged roads around the oil sands and you'll see tent camps and barracks housing thousands of "roughnecks" who have doubled their money by coming to Fort McMurray. Alberta is quickly turning into a petro-state. The energy sector directly or indirectly employs one in six workers. Farmers in the breadbasket of the country have dropped dairy and ranching to work in construction. And yet there are still skill shortages. Some oil companies have taken to flying workers in from as far away as Newfoundland, 4,000 km from Fort McMurray. The men stay for a two-week shift before flying home again in the company's charter. The companies have cut runways into the muskeg to land their planes. Alberta is pressing the federal government to relax rules on immigration to feed the talent pool. "We need welders," one executive told me. "Why don't you become a welder?" The consequences of this boom seem scarcely to bother politicians in Alberta. It has always been a boom and bust sort of place, with a more American, laissez-faire culture than most of the rest of Canada. "We're not dirigiste," one minister told me, "but we might have managed this boom differently." The political and business capitals of Alberta-Edmonton and Calgary-are undergoing their own booms. Calgary, once a prairie town whose chief attraction was its proximity to the ski slopes of the Rockies, is now Canada's most dynamic city. Ironically, given its role as the corporate centre of the oil sands, it is also the world's cleanest city, according to the consultant Mercer. Buildings go up with Dubai-like speed. EnCana, one of the giant companies of the sector, has commissioned Norman Foster to design "The Bow," a new 236m-high skyscraper that will be a suitable testament to Calgary's self-confidence. Torontonians still scoff at western Canadians for their backwardness. But the money, power and new immigrants are heading for Alberta, not Ontario. Yet all this brings problems. Calgary is unlikely to stay the cleanest city on the planet for much longer. A grey pall of smog already hangs over Canada's SUV capital. And Calgary's sprawl is spreading across the prairie that lies to its east, north and south; if the city could bulldoze through the First Nations reserve that borders its west, it would. And while small government in Alberta might be good for the oil sands, it isn't getting much infrastructure built. With a $6.8bn budget surplus from oil revenues in 2005, Alberta's then premier, the Falstaffian controversialist Ralph Klein, gave each citizen of the province a $400C "rebate," at a total cost of $1C.4bn. Critics said the money could have paid for a high-speed rail link. Or it could have been invested in the province's rainy-day fund, which stands at around $12bn, compared with Norway's $200bn. There are big issues for Canada itself. As the engine of the country's economy, the oil sands are powering its growth, even if, as the constitution allows, Alberta retains the bulk of the revenues from the sands. The cumulative value to Canada from the oil sands will be $790Cbn by 2020, according to Alberta Energy. Alberta will retain $630Cbn of that.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
66
Xtn—oil sands key to Canadian economy Decline in oil industry will take down the entire Canadian economy. Canadian Press, 1/28/2008. “Canada's economy depends on Alberta oil: Stelmach,” http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20080128/stelmach_oil_080128/20080128?hub=SciTech.
Canada depends on Alberta's oil-rich economy to fuel prosperity and any shut down in the province's oil industry would be felt across the country, says Alberta Premier Ed Stelmach. The Alberta leader was greeted by protesters as he joined other provincial and territorial leaders in Vancouver Monday for Council of the Federation meetings focused largely on climate change. But he was unapologetic. "It's fact,'' Stelmach told reporters. "I'm not saying that in a boastful way.'' Stelmach said he knows Alberta is being singled out by environmental
deep cuts by Alberta would be felt across Canada. "Today, the economy of Canada is dependent in large part on the economy in the province of Alberta,'' he said at a press conference at the end of Monday's meetings. groups but the premiers were told that
Price decline destroys the Canadian economy. The Ottawa Citizen, 4/14/2005. http://www.uofaweb.ualberta.ca/chinainstitute/nav03.cfm? nav03=43258&nav02=43112&nav01=43092.
Canadians had better hope the price of oil stays high and the Chinese economy remains strong, because their economy has become increasingly dependent on both, a new Statistics Canada study suggests. "Canada's surplus in trade in energy is now almost as large as all other resource exports combined, including forestry -- for long our largest export -- food and metals," it said, crediting the surge in world oil prices. Energy now accounts for more than 16 per cent of Canada's exports, more than double the 7.3 per cent in 1998, an increase that has mostly been at the expense of exports of autos, machinery and equipment. Canada is well positioned to profit from soaring energy prices down the road as well, the report said, noting that over the past decade one-third of the investment by firms in Canada has been in the energy sector. "The reliance on energy for such a large part of exports might raise questions about our vulnerability to a collapse in prices, such as for oil in 1986, 1991 and 1998," it said in the report published yesterday in Canadian Economic Observer, its flagship publication.
Canadian exports to the US are key to the Canadian economy—our evidence is specific to US trade Spivak, 8 – Ilya, Comtex News Network, “Trade Record Oil Prices With USDCAD” 5/2, Lexis Why is USDCAD Correlated with the Price of Oil? Historically speaking, the Canadian dollar has been highly correlated with the price of oil, with the two tracking each other with over 80% precision. This is not surprising - Canada boasts the world's second largest oil reserves (after Saudi Arabia). Canada is also the number one supplier to the world's largest oil importer, the United States. As the price of oil goes up, Canadian firms benefit from greater export revenues, improving Canada's trade balance and adding to positive growth in overall national income. The relationship has been particularly notable in USDCAD. This makes sense because the global price of oil is denominated in US dollars . If the Canadian dollar is over 80% correlated with the price of crude, then one would reckon that an appreciation in oil would see an analogous depreciation in USDCAD over 80% of the time. US Slowdown Holds USDCAD in Place as Oil Rallies
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
67
AT: Refineries bad—generic If the US doesn’t boost refinery capability China will—itheir impact turns are non-unique Laureshen, Du Plessis et. al 04 [ CJ-Alberta Energy Research Institute, D- Alberta Energy Research Institute / Alberta Economic Development, CM XU and KH Hung- State Key Laboratory of Heavy Oil Processing, China, Presented at the Canadian International Petroleum Conference-“ Asian-Pacific Markets-A New Strategy For Alberta Oil”, http://www.aeri.ab.ca/sec/new_res/docs/PAPER_2004-017_Final.pdf, June 8-10] Technical solutions are feasible for many of the constraints facing heavy oil and bitumen producers in Alberta, and it is likely that crude production will continue to grow as anticipated. However, the existing market issue is one that can only be solved technically with a major investment by U.S. refiners in new conversion capacity. Even then, it is doubtful that there will be enough refinery space in the U.S. to handle the volumes that are projected from Alberta in the coming 20-30years. One obvious solution is to seek new markets. The rapid economic growth in the Asian-Pacific region, which has a major dependence on Middle East oil, makes countries such as China, Japan, Taiwan and Korea attractive potential markets for Alberta crude.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
68
AT: Refineries bad—pollution Pollution from refineries is inevitable—China has already invested in Canada’s oil industry The Gazette, 2006 (“Criticism of China won't affect trade relations”, November 2006, lexis) "We are being more open, more transparent and more assertive, but we are equally being more aggressive on the trade and investment side of things," Emerson said. "There is no doubt in my mind that China will look after its economic and commercial interests." Relations between the two countries have soured since Harper's election victory in January. After meeting with Chinese President Hu Jintao at the Asia-Pacific Economic Co-operation summit this month, Harper noted that the Chinese aren't accustomed to "frank" discussions with Canadian governments. Still, Hu has said he wants to increase Chinese access to Canadian oil and gas, and Harper hasn't tried to block efforts by foreign companies to acquire Canadian resource companies, such as Switzerland-based Xstrata Plc's takeover of nickel miner Falconbridge Ltd. Canada said last week it would review rules limiting foreign ownership in the country, in a bid to boost investment from abroad. Hu told reporters during a state visit to Ottawa last year that his country wants to invest more in Canada's petroleum industry, to help feed his country's appetite for energy. Some of China's state-owned oil companies have already invested in Canadian producers. Cnooc, China's biggest oil-and- gas company, and China Petrochemical Corp., parent of Asia's largest refiner, bought minority stakes in Canadian energy firms last year. Alberta contains the largest pool of oil reserves outside the Middle East. Pollution inevitable—China has already invested billions in Canadian oil sand mines, increasing the number of refineries Harding, 2005 (Jon, Reporter for the Financial Post, “China’s Sinopec to pump cash into Syneco”, June 1, lexis) CALGARY - China's interest in the oil sands continues to grow as the country's second largest oil producer said yesterday it will invest $105-million and possibly spend billions more helping Calgary startup Synenco Energy Inc. build its $4.5-billion oil sands mine. Sinopec Group and tiny, privately held Synenco have struck a deal to create a joint-venture called Northern Lights Partnership, of which Synenco will retain a 60% interest. Asia's largest refiner of petroleum products would receive 40% of future production from the Northern Lights mining project, which is still at an early planning stage and is expected to produce 100,000 barrels of light synthetic oil a day by 2009. Through its new Calgary-based subsidiary called Sino Canada, the Chinese national would also cover 40% of the costs to develop Northern Lights. "It works out to Sinopec paying $105million for 40% of the resource, which is -- best estimate -- 1.5-billion barrels [recoverable]," said Jim Donnell, Synenco's president and CEO. "We feel very good about Sinopec," Mr. Donnell said. "They operate more than two-dozen refineries in China with a refining capacity of over three-million barrels a day. Each of those facilities have engineers, construction and design expertise. They have rich experience [to offer] as it relates to refining and upgrading." New technologies have reduced or eliminated environmental impacts of processing oil shale Bunger, Crawford et. al 04 [James W. -principal investigator for value-enhancement processing of US and Estonian kerogen oils, Peter M.-consultant in energy technology, policy, and strategic communications in Washington, DC, Harry R. Johnson principal petroleum engineer with Intek Inc., Oil and Gas Journal-“Is Oil Shale America’s answer to the peak oil challenge?” 5th Issue, August 9 In Colorado, Shell Oil Co. is currently testing a proprietary in situ conversion process (ICP), that uses sub-surface heaters to slowly convert kerogen to high yields of high-quality oil and hydrocarbon gases. The ICP process significantly reduces (and in some cases eliminates) the environmental impacts resulting from previous shale oil recovery methods. The process involves no open-pit or subsurface mining, creates no leftover piles of tailings, avoids potential groundwater contaminants associated with combustion, and minimizes unwanted byproducts and water use. Shell believes its technology could be profitable at $25/bbl, once steady-sta production is reached. There may be requirements for other in situ technologies, depending on the resource characteristics. In situ challenges are improved heating technology performance and reliability and, depending on the technology, improved groundwater protection processes.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
69
Xtn—Chinese refineries bad—environment/pollution Chinese oil refineries are comparatively worse for the environment—no regulations BBC, 8 [British Broadcasting Company WorldWide Monitoring, “China's environment watchdog admits it lacks sway to block big oil refinery”—3/4, Lexis] The country's top environmental watchdog has admitted it lacks the power to block the construction of a massive oil refinery near Guangzhou , which experts say will exacerbate air pollution problems in the Pearl River Delta. Yesterday's remarks by State Environmental Protection Administration deputy director Pan Yue follow mounting public concern over the project's impact. The mainland's largest joint venture, the US5bn dollars Sinopec and Kuwait Petroleum Corporation Enhanced Coverage Linking Kuwait Petroleum Corporation project is located in Guangzhou's Nansha district, about 40km from Yuen Long and Macau . Speaking on the sidelines of the annual session of the Chinese People's Political Consultative Conference, Mr Pan said more attention should be given to the environmental impact of the project, listed as a key development by the Guangzhou city government this year. "Environmental factors should be thoroughly considered in the overall planning of any regions and industries," he said. "However, the existing law does not make it mandatory to have an environmental assessment for the whole region before a specific project can be allowed to go ahead." Environmentalists have argued that the project, approved by the National Development and Reform Commission last year, should be halted pending the approval of environmental assessments for the whole Nansha industrial district by Sepa. Fourteen Guangdong People's Congress deputies submitted a motion last month asking the government to halt the project. They said the project, situated in the heart of the Pearl River Delta, would inevitably aggravate air pollution in Guangzhou, Shenzhen , Zhuhai , Zhongshan, Dongguan, Hong Kong and Macau. They cited concerns by mainland and Hong Kong environmentalists over pollution from the Nansha industrial district, and its effects on the air and marine environment in the region. Villagers from the district were relocated in June and refinery construction was widely expected to start this summer, the Economic Observer newspaper reported. The local government has insisted it can minimise possible environmental consequences on neighbouring cities. Mr Pan said the Nansha refinery was just one of many large environmentally sensitive projects, most notably hydropower and petrochemical plants, that Sepa had failed to check due to the lack of legal support. "The most important question we want to ask is whether environmental factors have ever been considered in authorities' approval of large hydropower and urban development projects," he said. He refused to remark on the damming of the Nu (Salween) River in northwestern Yunnan, the longest undammed river in Southeast Asia. Final preparations have started for the construction of one of the 13 proposed dams despite a lack of Sepa approval. On completion, the Nansha plant will be able to process up to 15m tonnes of oil a year and produce 800,000 tonnes of ethylene, used to make plastic. It is scheduled to begin operation in 2010. Chinese oil refineries are worse for the environment—refineries in Costa Rica prove AFP, 7 [Agence France Presse, “China oil refinery threatens Costa Rica environment: groups” 6/17, Lexis] An oil refinery would jeopardize Costa Rica's environment as planned by a Chinese company known as a polluter, environmental groups said Saturday. Oilwatch Mesoamerica and other groups warned that recent agreements between China and Costa Rica included a refinery built by China Petroleum Corporation. "We are studying the history of this company, which has little concern for the environment or human rights, two of President Oscar Arias's causes elsewhere in the world," Oilwatch Mesoamerica director Alicia Casas told AFP. Nobel Peace Prize laureate Arias broke with Taiwan and normalized relations with China on June 1 and followed up with a set of cooperation agreements. Oilwatch Mesoamerica joined with the Federation for the Conservation of the Environment to denounce a large number of accidents they said killed hundreds of people and caused a lot of pollution "through negligence" of the China Petroleum Corporation in the Chinese cities of Cangzhou, Chongqing and Kaixian. "We were surprised that one of the Beijing envoy's first announcements was construction of a mega-refinery, at a cost of billions of dollars," Casas said. She said Arias "has an obsession" with bringing this oil company to Costa Rica.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
70
Refineries Good—Oil Shocks Refineries are vital to preventing oil shocks Leng, 6 – Sunita Sue, Staff writer, The Edge Singapore, “As I Call It: Taxing oil profits is no windfall solution” 5/8, Lexis After the oil shock of the late 1970s, then US president Jimmy Carter pushed through the Crude Oil Windfall Profits Tax Act in 1980. The tax was imposed on the difference between the market price of oil and a government-determined base price. According to a study by the Congressional Research Service, the windfall profits tax was expected to raise more than US$320 billion between 1980 and 1989. However, the government only managed to collect US$80 billion. Worse, the final amount was actually only about half of this because the tax was deductible against corporate income. The study also found that the tax had the effect of decreasing domestic production by 3% to 6%, increasing US dependence on foreign oil sources. Refining bottleneck If left to the market, soaring energy prices will force everyone to moderate their gas-guzzling ways at some point, whether it's buying a smaller car or using less air-conditioning. But that will take time and that's the demand side of the equation. What really needs to come under scrutiny is the supply side -- specifically, the refineries. Oil prices are high because there is too little refining capacity. The US hasn't built a new refinery in years. In fact, since deregulation in 1982, oil consumption has risen by a third while oil companies have reduced refining capacity by a tenth, says the Foundation for Taxpayer and Consumer Rights. Refining is the bottleneck. It needs to be addressed. And while we're there, get rid of those tax breaks and subsidies that the big oil boys enjoy. The extra money could go some way towards making those hybrid cars cheaper. Lack of refinery capacity is driving up high prices Murdoch, 5 [Scott, Staff Writer, Northern Territory News, September, “No Oil Price Relief in Sight,” Lexis] GLOBAL refinery constraints are expected to keep world oil prices at current highs with little relief expected in the next few years. A dour forecast by Abare, the agricultural research agency, found oil consumption rose by 3.7 per cent in the past year around the world. However, despite volatility in the spot price market during the past few months, the high is seemingly here to stay. But while the prices are punishing for the consumer, the nation has earned $6.3 billion in the past year through exporting oil. The Abare study found the price has been exacerbated by refining capacity constraints, particularly in the US. The situation is expected to worsen in the wake of Hurricane Katrina. The powerful Organisation of Petroleum Exporting Countries (OPEC) said on the weekend it would consider releasing more oil in a bid to ease the price. However, the cartel is already pumping nearly 2 million barrels per day above its quota. The global impact of the petrol price impost was due to be revealed overnight when the US Fed Reserve met to set interest rates. The central bank was tipped to raise the official cash rate for the 11th consecutive quarter to 3.75 per cent. Abare analyst David Bailey said the current oil shock had now become a supply-side story despite the situation being continually blamed on demand. "The underlying causes of the higher prices over the past few months have been supply disruptions as a result of adverse seasonal conditions," he said. Petrol prices at the bowser have soared to record highs in the past week across the country.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
71
Refineries Good—High Oil Prices High oil prices are a result of low refining capacity, not peak oil. The Pennisula 08 [“Refining capacity shortfalls behind high oil prices” 625http://www.thepeninsulaqatar.com/Display_news.asp? section=Local_News&subsection=Qatar+News&month=June2008&file=Local_News2008062521757.xml] doha • The Deputy Premier and Minister of Energy and Industry, H E Abdullah bin Hamad Al Attiyah, said yesterday the Ras Laffan condensate refinery will be operational next year and plans are afoot to expand the refinery in a second phase. As for the current global oil situation, Al Attiyah said the oil market was well-supplied but refineries were unable to cope with the huge amount of crude. "There is more floating crude oil and no buyers, especially since most refineries in the world lack refining capacity and cannot treat more crude oil," he told reporters at a function in Ras Laffan Industrial City. However, he said there was a big shortage of diesel worldwide because of high demand and limited output from the refineries. There is a need for investing in and providing incentives to build more refineries, the minister said, adding that there was a reluctance to invest in refineries because the margin was very low. Besides, he said, many countries impose a lot of restrictions on building of refineries. "We find that there is more oil in the market but lack of refineries to treat this crude oil and what we are feeling today is a shortage in products but there is no shortage in supply of crude oil," the minister said. Shortage of refineries has caused high oil prices. Reuters 08 (Lin Noueihed, June 17, “Refining shortage cause of high oil price: UAE”, http://uk.reuters.com/article/oilRpt/idUKL17674841200806170) DUBAI (Reuters) - High oil prices are due to a shortage of refining capacity in industrialized nations, the United Arab Emirates Oil Minister Mohammed al-Hamli said in remarks published on Tuesday. "There are not enough refineries to meet growing demand," Hamli told the Gulf News daily."A shortage of refineries is one of the main reasons behind the increasing prices as a result of the policies adopted by industrialized nations not to invest in new refineries due to environmental concerns, while the sector needs substantial new investments." OPEC has consistently said that fundamentals are not to blame and that high oil prices are due to factors beyond its control such as U.S. dollar weakness, speculation and international politics as well as a lack of refining capacity. But concerns over globally rising prices have prompted Saudi Arabia to host a meeting of producers and consumers on June 22 to discuss rising oil. Reports that Saudi Arabia plans to boost output initially helped ease prices but the effect was offset by U.S. dollar weakness, propelling oil to a record high of almost $140 a barrel on Monday The UAE is one of the few members of OPEC with the spare capacity available to boost output, along with Saudi Arabia. In Abu Dhabi to meet Hamli on Monday, British Energy Minister Malcolm Wicks told Reuters that the UAE had not made any promise to boost output. The refinery bottleneck is causing oil prices to be high. Gulf News 08 [Ahmed A. Elewa, “High Oil Prices Cut Refinery Investment”, June 16, http://www.gulfnews.com/business/Oil_and_Gas/10221589.html] A shortage of refineries is one of the main reasons behind the increasing prices as a result of the policies adopted by industrial nations not to invest in new refineries due to environmental concerns, while the sector needs substantial new investments," Al Hamili said. The US has not established any new refineries for more than two decades, while global oil demand is expected to grow by 12.7 million barrels per day, or 15 per cent by the year 2015, according to a report by the British Treasury. "We would welcome the decision by any producing country with extra capacity to increase production, yet this decision lies in the hands of these countries, not for us to decide," Wicks said. "The reason for my visit is to discuss the issue and the likely agenda of Jeddah's meeting." He attributed rising prices to the growing demand from emerging markets, speculation and developments in financial markets.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
72
Refineries Good—High Oil Prices The refinery bottleneck is causing oil prices to be high. Gulf News 08 [Ahmed A. Elewa, “High Oil Prices Cut Refinery Investment”, June 16, http://www.gulfnews.com/business/Oil_and_Gas/10221589.html] A shortage of refineries is one of the main reasons behind the increasing prices as a result of the policies adopted by industrial nations not to invest in new refineries due to environmental concerns, while the sector needs substantial new investments," Al Hamili said. The US has not established any new refineries for more than two decades, while global oil demand is expected to grow by 12.7 million barrels per day, or 15 per cent by the year 2015, according to a report by the British Treasury. "We would welcome the decision by any producing country with extra capacity to increase production, yet this decision lies in the hands of these countries, not for us to decide," Wicks said. "The reason for my visit is to discuss the issue and the likely agenda of Jeddah's meeting." He attributed rising prices to the growing demand from emerging markets, speculation and developments in financial markets.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
73
High Oil Prices Bad—Economy High oil prices are hamper economic recovery. We are headed for a deeper recession. Hallagen 2008 (Liam - Chief Economist at Prosperity Capital Management, Feb 6, The Telegraph, “US staring at double-dip recession as calls for higher interest rates grow,” http://www.telegraph.co.uk/money/main.jhtml? xml=/money/2008/06/01/ccliam101.xml) US consumers - still America's economic engine room - are adjusting to the realities of "$4 a gallon gasoline". Inflation is on everyone's mind. The hope had been that Bush's $150bn emergency tax rebates - which began arriving in bank accounts last month - would provide households with a shot in the arm. But the truth is, even before the rebate has been fully delivered, its impact has been largely offset by inflation. While the US government's positive fiscal boost is a one-off, high oil prices will continue to hobble the world's largest economy for the foreseeable future. Crude prices aren't expected to fall sharply any time soon. So, it won't be long before any positive effect from the tax rebate is completely swamped. The Fed has long been able to lower interest rates despite inflationary pressures. The dollar's reserve currency status has traditionally given the US central bank room for manoeuvre. The world has now changed. So weak is the US currency, so large are the country's debts, and so powerful is this "structural" oil price shock that even an overtly political central bank like the Fed can no longer do what it wants. So this inflation spike will harm the US not only via escalating costs and lower spending power but, as the markets have now reluctantly concluded, by forcing the Fed to raise rates just when the broader economy so badly needs them to fall. In a recent private seminar, I heard Greenspan say: "If we allow inflation to re-emerge, growth rates will slow, living standards will suffer and we could well see US stagflation. And the only way you can truly contain inflation is by raising rates." It doesn't help Bernanke that his predecessor has the brass neck to offer advice he refused to follow himself. But with producer price inflation above 6 per cent and one-year inflationary expectations hitting a record 7.7 per cent last month, US rates must rise. And that's why America's economic turmoil is going to get a lot worse before it gets better. We're looking at a double-dip recession. Recessions affect the global economy – triggering other depressions Stein 02 (Charles, Business Columnist for the Globe , Boston Globe , March 31, Lexis) A coincidence? No way. More than any time in the recent past, the United States is the key player in the world economy. "We are the only locomotive of growth," said Nariman Behravesh, chief economist at DRI-WEFA, a Lexington forecasting firm. America's dominance is a function both of our strength and the rest of the world's weakness. Europe and Japan, for different reasons, aren't in a position to make much of a contribution. How did we get here? And what are the implications of our leadership role? The answer to the first question is easier. America is more critical to the world's economy, in part, because it represents a growing slice of the pie. According to Economy.com, a Pennsylvania research firm, the United States now accounts for 32 percent of the world's economic output, up from 25 percent in 1990, and 24 percent in 1980. The numbers climbed because America grew faster than its competitors, especially in the 1990s, and because the US dollar, the measuring stick, has appreciated in value. The laws of arithmetic dictate that when you get as big as America, you have a major impact on the other players in the game. In some countries that impact is particularly large. In Singapore, for example, exports to the US account for 27 percent of the gross domestic product. In Hong Kong, the comparable number is 28 percent. In Mexico, about 25 percent. Simply put, when we stop buying, these countries stop selling. And growing. Serious economic decline leads to global war and extinction. Bearden 00 (T.E., LTC U.S. Army (Retired), June 24 , “The Unnecessary Energy Crisis: How to Solve It Quickly,” http://www.freerepublic.com/forum/a3aaf97f22e23.htm) History bears out that desperate nations take desperate actions. Prior to the final economic collapse, the stress on nations will have increased the intensity and number of their conflicts, to the point where the arsenals of weapons of mass destruction (WMD) now possessed by some 25 nations, are almost certain to be released. As an example, suppose a starving North Korea launches nuclear weapons upon Japan and South Korea, including U.S. forces there, in a spasmodic suicidal response. Or suppose a desperate China-whose long-range nuclear missiles (some) can reach the United States-attacks Taiwan. In addition to immediate responses, the mutual treaties involved in such scenarios will quickly draw other nations into the conflict, escalating it significantly. Strategic nuclear studies have shown for decades
The real legacy of the MAD concept is this side of the MAD coin that is almost never discussed. Without effective defense, the only chance a nation has to survive at all is to launch immediate full-bore pre-emptive strikes and try to take out its perceived foes as rapidly and massively as possible. As the studies showed, rapid escalation to full WMD exchange occurs. Today, a great percent of the WMD arsenals that will be unleashed, are already on site within the United States itself. The resulting great Armageddon will destroy civilization as we know it, and perhaps most of the biosphere, at least for many decades. that, under such extreme stress conditions, once a few nukes are launched, adversaries and potential adversaries are then compelled to launch on perception of preparations by one's adversary.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
74
Xtn—high oil prices bad—economy High oil prices spur a recession and will continue to a depression. Hargreaves 08 (Steve - CNNMoney.com staff writer, March 7, “$100 oil hurts, just like a recession: Economists, once so dismissive of pricey crude's economic impact, say it's going to hurt,” CNNMoney.com, http://money.cnn.com/2008/03/07/news/economy/oil_recession/?postversion=2008030715) "You have a very significant restraint on consumer spending," said Chris Lafakis, an associate economist at Moody's Economy.com, an economic consultancy. "It acts as a tax would." Lafakis said consumers spend an extra $5 billion each year for each $1 increase in the price of crude. When economists were predicting that oil wouldn't negatively impact the economy, they based their assertion on a price of about $80 a barrel. But if oil stays at $100 a barrel for the next 12 months, consumers will have shelled out an extra $100 billion on oil by next year. That's an extra $100 billion not being spent at the mall, mega-mart or multiplex. "The entire stimulus package could be drained by higher energy costs," Lafakis said, referring to the $120 billion lawmakers will refund to taxpayers in an effort to keep the economy out of recession. "That has the potential to turn a mild recession into something more dark."
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
75
AT: Refineries cause high prices Refineries aren’t responsible for high prices—hardly any money goes to them Leonard, 8 [Andrew, staff writer, Salon.com, “Why gas is so expensive” 5/29, Lexis] The relatively small percentage of the price of a gallon of gas that goes toward refinery profit margins pokes some holes in the notion that environmental regulations -- at least as applied to refineries -- are a primary villain in inflicting high gas prices on the public. According to this theory, which seems to get more media time with every nickel jump in the price of a gallon of gas, "extremist" air quality regulations combined with legal harassment by environmental activists have inhibited refinery owners from building new refineries. Central to this proposition is the idea that the real bottleneck for gas prices is not in the supply of oil, but in the ability to process it and refine the oil into gasoline. An example of how this works came after Hurricane Katrina, when numerous refineries in the Gulf Coast region were knocked out of commission, and the price of gas spiked because the remaining refineries couldn't make up the difference. If environmentalists hadn't prevented new refineries from being built, argued the critics, there would have been enough slack in the system to avoid such oil shocks. It is true that no new refineries have been built in the United States since 1976 and hundreds have closed down. Between 1985 and 1995, laments the California Energy Commission, 10 refineries closed in California alone. It is also true that overall refining capacity is down, in both California and the entire United States. But total production of gasoline is up, nearly 20 percent, since 1976. Instead of building big new refineries, refinery owners closed smaller, inefficient -- unprofitable -- facilities and expanded and improved the production lines at their existing complexes.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
76
Refineries good—gas prices Refineries are key to checking rising gas prices. The Toronto Star, 2007 (Laura Bobak, Refinery woes oil sector's Achilles' heel, July 11, lexis) Refineries are the crucial middlemen in the process by which viscous black sludge is processed into the clear, flammable liquid consumers depend upon to get to work, run errands, transport children and visit family and friends. "Gasoline markets continue to be vulnerable to short-term refinery outages or other supply disruptions and can be expected to remain volatile throughout the summer," Natural Resources Canada said in its June 8 "Fuel Focus" report. Meanwhile, federal statistics show profit margins for refiners are up, as wholesale prices soar as a result of the supply disruptions. But don't be too quick to blame all price hikes on refiners: their profits represent only one small portion of the price of a litre of gas, and they don't always control the factors that lead to increases. After oil arrives at a refinery, it is broken down into basic components through a convoluted process that uses heat, pressure and chemical reactions to create end products such as gasoline, heating oil, jet fuel and diesel fuel. The process is further complicated by the fact refiners must blend, purify and fine-tune gasoline to meet vehicle manufacturers' specifications and government emissions standards. Operating a refinery costs millions of dollars, while building one can cost billions - one reason these massive shiny jungles of piping are few and far between. Refining crude involves heating the oil in furnaces. The resulting liquids and vapours are released into the skyscraper-like distillation towers that are a hallmark of refineries. After separation and purification, they can be revamped into other products. The exact cost of refining oil is competitive information, but Ted Stoner, a vice-president with the Canadian Petroleum Products Institute, says a major component, after the capital cost of the refinery and workers' wages, is the cost of energy to fuel the furnaces. "Refineries are continuously seeking out energy conservation ideas to keep their energy bills at a minimum," Stoner said. When fires or equipment failures disrupt refinery production, the shutdown ripples through the downstream supply chain. Uncertainty about future supplies can add a risk premium to prices, notes Canada's Competition Bureau, and seasonal variations in demand also contribute to price fluctuations. Shortages have resulted in increased wholesale prices from refiners over the last three years - by about six cents per litre in eastern markets and 10 to 12 cents per litre in Western Canada, according to Natural Resources Canada. "Refining margins continue to increase, reflecting the supply/demand imbalance for gasoline across North America this spring," says its report, noting more than 30 distinct events so far this year have reduced refining capacity. "In the face of robust demand, gasoline inventories have been drawn down and wholesale prices have been driven up as markets try to rebalance. These increases reflect the higher costs associated with new fuel specifications, the tighter supply in the west and improved returns for refiners." In the U.S., a spring punctuated by refinery outages caused a gasoline supply crunch, leading to May's record U.S. gasoline prices. Those prices have moderated recently as refineries have come back on line and started producing more gas. Refineries are crucial to prevent sky-high gas prices. Moore, 2005 (Adrian, Ph.D. in Economics, vice president of research at Reason Foundation, Katrina Reveals Gas Price Folly, September 1, lexis) The ongoing fallout from Katrina sheds light on our woeful energy policies, demonstrating that we are so vulnerable that even a temporary shutdown of oil refineries in one corner of the country will have a huge impact on gasoline prices across the country and in California. Why? Supply and demand. And not simply the supply of oil we get from the Middle East, Venezuela, and others. A new oil refinery has not been built in the United States since 1976. During that time, our gasoline use has increased over 25 percent. The nation's 149 existing refineries have been running at maximum capacity trying to meet record demand and, as a result, not only do we import oil, we actually have to import 10 percent of our daily gasoline from refineries overseas. So when Hurricane Katrina or a refinery fire or anything else causes even just a few refineries to shut down for awhile, there is absolutely no excess capacity nationwide to make up the difference, and prices at the pump skyrocket. For the wealthiest, most powerful nation in the world this is a ridiculous situation that will only get worse as our insatiable demand for gasoline keeps growing and refinery capacity falls further behind in the coming years. Just a few new refineries would alleviate the problem and help keep our gas prices lower and steadier.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
77
Refineries good—oil supply Refineries are critical to cushion the US against oil supply disruptions. Furchtgott-Roth 07 (Diana - former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute, May 11, The New York Sun, “Get Pumped,” http://www.nysun.com/opinion/get-pumped/54275/) "Surprises get priced," president of EPRINC, Lucian Pugliaresi, says. He writes, "Rising gasoline demand in the U.S., combined with unscheduled refinery closings, looming strikes, limited spare replacement capacity, longer turnaround times for scheduled maintenance, and refining factors are all contributing." No new refinery has been built in America for 30 years. For those reasons and others, refiners' inventories of gasoline are low. Inventories serve as a cushion against disruptions of supply. So does spare refining capacity, of which there is none. Inventories have declined from February highs, and now stand at 192 million barrels, equivalent to about three weeks of supply, barely above the low point of 190 million barrels that occurred just after Hurricane Katrina. Unforeseen shutdowns have dropped the national average for refinery capacity utilization down to 88% from the usual 93%. Sinclair Oil's refinery in Wyoming is shut for 10 days of maintenance due to a power outage on May 6. It would ordinarily refine 71,500 barrels of oil a day into gasoline, diesel, and jet fuel
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
78
Refineries good—US Canada Relations Energy imports are a key component of U.S.-Canadian relations. Ek and Fergusson 07 – (Carl and Ian F., Foreign Affairs, Defense, and Trade Division congressional researchers, May 15, “Canada-US Relations,” Order code 96-397, http://209.85.215.104/search?q=cache:jkhCWkWD0wJ:www.fas.org/sgp/crs/row/96397.pdf+US+oil+Canada+relations+improve+benefit+importing+tar+sands+good&hl=en&ct=clnk&cd=9&gl=us&client=saf ari) Canada is the United States’ largest supplier of energy — including oil, uranium, natural gas, and electricity— and the energy relationship has been growing. Canada is the world’s seventh largest petroleum producer, and its reserves are believed bysome to be second onlyto those of Saudi Arabia; Canada’s sources of oil include traditional and offshore wells and, increasingly, Alberta’s tar sands. Canada provides 17% of U.S. oil imports and supplies 18% of U.S. natural gas demand. Canada is particularly valued because it is reliable source of energy, a key factor contributing to U.S. economic security — it is not a member of OPEC. The two countries are cooperating on the development of pipeline construction projects. China recently has begun to show increasing interest in Canada’s oil sector, a development that is believed to have “caused some consternation in Washington.” Canada also a net exporter of electricity to the United States, and the North American electricity grid is closely interconnected. Following the August 2003 blackout, the two sides have worked to develop improved standards for electricity transmission reliability. 45 Bilateral Trade Issues. The United States and Canada enjoy the largest bilateral commercial relationship in the world; the U.S. State Department estimates total two-way trade at $1.4 billion per day.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
79
Oil Investment Good—Prices Lack of oil investments will increase prices—turns the case Lowe,0 8 [John; Executive Vice President, Exploration and Production, ConocoPhillips—Before the Select Committee on Energy Independence and Global Warming U.S. House of Representatives, http://www.conocophillips.com/NR/rdonlyres/ B4168205-5A4E-473E-A78D-8F561FC4BD25/0/Markey_Testimony_written.pdf] One of the biggest drivers of global oil prices has been sustained global economic growth since 2004, which led to strongerthan-expected energy demand growth. In fact, real growth in global gross domestic product between 2004 and 2007 of nearly 5 percent per year was about 40 percent higher than the average growth rate since 1980.11 Due to this economic prosperity, between 2004 and 2007 oil demand grew by 2 percent per year, almost twice the rate experienced from 2000 to 2003. Nearly half of the demand growth since 2000 has been in developing Asian nations that have reached a highly energyintensive stage of economic growth. In these nations, rising per-capita income also enables a larger proportion of the population to afford affluent lifestyles similar to those in the United States. Although responsible for only 12 percent of global oil demand growth since 2000, the United States, with just five percent of the world’s population, still accounts for 24 percent of global oil demand.12 A second reason for high global crude oil prices is constraints on expanding conventional supplies, in particular, rising resource nationalism that limits access to resources for development. Figure 3 below shows that in the 1960s, 85 percent of global oil and natural gas reserves were available for direct development by international oil companies, versus only 7 percent today. In addition, rising competition for access to the resources that are open for development has enabled host governments to dictate fiscal terms that are so onerous that publicly traded oil companies cannot economically pursue them. Morgan Stanley estimates that the tax rates of major oil companies have increased from about 30 percent to 45 percent since 2000.13 In some cases, governments change fiscal terms after investments have been made or increase taxes on existing production, even in mature producing areas in otherwise stable countries (Alaska in the United States, and the United Kingdom). Such actions can make it uneconomic to invest the capital required to slow decline rates in existing fields. As mentioned earlier, resource access is also very limited in the United States, where an estimated 40 billion barrels of technically recoverable oil resources are either completely off limits or subject to significant lease restrictions. Similar restrictions apply to more than 250 trillion cubic feet of recoverable natural gas resources.14 Failure to invest in oil refineries exacerbates the energy crisis—turns the case Brettell, 8 [Joe, “FUELING SOLUTIONS TO HIGH GAS PRICES; [1]” US Fed News Service, Proquest, 6/8] A comprehensive energy plan must also include a way to upgrade our energy infrastructure and increase refining capacity. While refinery capacity has been increased by more than 20% since 1985, a new oil refinery has not been built since 1976! This lack of investment in energy infrastructure makes us vulnerable to natural disasters; note the rise in gas prices after Hurricane Katrina or other supply chain problems. According to the U.S. Energy Information Administration, if current domestic refinery expansion plans were allowed, domestic refining capacity would increase by about 800,000 barrels per day, the equivalent of four new refineries, by 2010. While these additional refineries are desperately needed, they are being held up by excessive red tape. Congress needs to fast-track these expansions plans and examine ways to deliver increased supplies of cheaper gas to ease the burden on Colorado families as soon as possible. While tapping our abundant domestic resources and increasing refining capacity are excellent short and mid-term solutions, only the development of safe and reliable alternative fuels, along with a fresh perspective on existing resources such as wind, nuclear and solar energy, will serve as a permanent long-term solution to this problem.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
80
Oil Investment Good—Economy Oil refinery investments are key to the economy PR Newswire, 7 – “U.S. Investment Monitor Shows Large Investments in Energy and Technology Projects Increased Average Project Size to Five-Year High in 2006” 11/6, Lexis The report analyzed major U.S. business investment projects in each state announced during 2006, which had a minimum of $20 million of capital invested or 20 jobs retained or created. The average capital investment per job created or retained rose from $177,000 in 2000 to $324,000 in 2006. The announced new projects included in the study account for $111 billion in total capital investments and 347,000 new and retained jobs in the U.S. in 2006. "Both capital investment and employment drive economic growth and are the focus of state economic development strategies," said Tom Neubig, Director of QUEST. "These investments, which pursue locations with advantageous criteria, serve as indicators of a region's long-term economic growth and competitiveness." The 20 largest projects account for $40 billion of capital investment, more than 30 percent of the total investment in projects included in the USIM. Semiconductor and energy sectors announced 14 of the 20 largest capital investments. Energy projects accounted for half of the 20 largest investments, and represent more than $20 billion in capital investment. Although investments in fossil fuels captured a smaller share of the total energy sector in 2006 than in prior years, the largest 20 projects included five oil refineries, three liquified natural gas terminals and two coal gasification facilities. Federal and state incentive mechanisms, coupled with increased consumer demand for petroleum alternatives, stimulated a significant amount of investment in alternative energy projects. U.S. ethanol production capacity accounted for 57% of alternative energy investments in 2006. "The energy sector continued to reshape the geographic profile of major capital investments as new ethanol facilities attracted investment to the farm belt," said Andrew Phillips, principal author of the study. "Despite this trend toward petroleum alternatives, oil and gas projects in Texas contributed to its first place ranking in 2006." The report also confirms that the U.S. continues to offer attractive investment opportunities for foreign companies. Approximately 26 percent ($29 billion) of capital investment projects in the U.S. were announced by non-U.S. companies. "Globalization has made companies more cost conscious, and the mobility of labor, capital, and consumers makes it easier for companies to locate their operations almost anywhere," said Neubig. "Within the U.S., states are competing to retain and attract capital investments from companies worldwide and must carefully evaluate their state and local tax systems and economic development strategies to remain competitive." Nuclear war Mead ‘92 (Walter Russell, Senior Fellow – Council on Foreign Relations, New Perspectives Quarterly, Summer, p. 30) The failure to develop an international system to hedge against the possibility of worldwide depression- will open their eyes to their folly. Hundreds of millions-billions-of people around the world have pinned their hopes on the international market economy. They and their leaders have embraced market principles-and drawn closer to the West-because they believe that our system can work for them. But what if it can't? What if the global economy stagnates, or even shrinks? In that case, we will face a new period of international conflict: South against North, rich against poor. Russia. China. India-these countries with their billions of people and their nuclear weapons will pose a much greater danger to world order than Germany and Japan did in the 1930's.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
81
Canadian Oil Sands Good—US Oil Supply Oil refinery investment for making use of Canadian resources is high now—this will create a sustainable basis for future oil Edmonton Journal, 6 “Oil futures a safe investment for young workers: This is not a sunset industry, energy minister says” Gordon Jaremko, The Edmonton Journal. SECTION: ALBERTA OIL & GAS REPORT; Pg. E1, Lexis The plan will spell out a strategy for making the most of Alberta oil, natural gas, coal, electricity and renewable energy, including wind and sunshine, the minister said. Melchin said youth will be sent a message: "This is a great, long-term industry. So go to school and get the skills to be part of it, and do not be fearful it's a sunset industry." High priority will be given to value-added development by encouraging investment in oilsands upgraders, refineries and petrochemical projects, Melchin indicated. The policy will try to repeat, in fields such as fuels and chemical manufacturing, the province's success in the 1990s of stimulating oilsands projects by deferring provincial royalties until construction costs are paid off. "We want to challenge industry," Melchin said. "We need to look at the tax, royalty and regulatory framework to make sure it signals to industry what we want to facilitate." Visiting official delegations from the world's hottest oil growth market, China, have already been firmly told Alberta does not want to be only a source of raw, discount-priced bitumen for other countries' energy and manufacturing industries, Melchin said. Sources of encouragement to think big have included the traditional customer for about 60 per cent of Alberta production: the United States. Expectations are high and rising in Washington, D.C., where the province figures prominently in annual forecasts of global oil supplies by the U.S. Department of Energy's economic research arm. Three years after the U.S. Energy Informatio n Administration officially accepted Alberta's oilsands reserves count of 175 billion barrels, the forecast for the province's production is improved. As the second-largest economically recoverable oil stockpile in the world after Saudi Arabia's legendary reserves, the northern
Canada will stand out as the world's fastest growing oil producing country if annual average oil prices stay at $50 US a barrel or more, EIA 20-year global projections indicate. Canadian oil output is forecast bitumen is now rated as likely to be well tapped due to the 116-per-cent jump in annual average oil prices to $57 US per barrel for 2005 from $25.90 in 2001.
to hit 6.4 million barrels a day by 2025, up 120 per cent from about 2.9 million. Canada climbs world oil rankings from twelf th-biggest producer to fourth, after the former Soviet Union (with a forecast 19.6 million barrels daily in 2025, up 75 per cent), Saudi A rabia (11 million, up 20 per cent) and the U.S. (11 million, up 18 per cent). "The upward movement is definitely in the oilsands," EIA oil market analyst Dan Butler said in an interview. "There is a lot of optimism." Oil in the $50 range has emerged as the agency's most likely reference case forecast, although $90 is rated as possible if consumers ignore price hikes and demand continues to outstrip production growth. A price decline is also plausible before 2010 if conservation spreads at the same time as about 5.5 million barrels a day of new production starts from projects in Africa, the Caspian Sea region and the North Sea, Butler said. But the fall is expected to be gentle by historical standards, to $29 a barrel instead of the $10-to-$21 industry hardship range in which oil stagnated in between 1986 and 1999. At a winter conference, oilsands developers said their projects are built to stay profitable even if markets dip below $30. American forecasters also acknowledge an
Canadian supplies are dependable. "There are not many safe, predictable places in the oil world like Canada," Melchin said in describing Alberta's message to the U.S. "That makes us unique. We are probably one of the prime places on the planet to look for future growth." American forecasters also rate Africa and Central and South America as capable of production increases exceeding 100 per cent over the next 20 years because their oil industries are just developing. But as in the Middle East, the regions' political risk clouds the industry and investment outlooks. The oilsands spell the prospect of reduced American oil dependence on the Middle East. "We recognize your reserves. You are second after Saudi Arabia. Iraq is no longer second," Butler said. "Certainly from the security aspect the U.S. is interested in, that's a good thing. "Volumes of oil in your neighbour's yard are a lot more important than the volumes that are over in the Persian Gulf," Butler said, adding that Washington is also heartened by prospects of Mexican growth. Canada is already the top U.S. import source. American purchases of Canadian oil and refined products averaged more than 1.9 million barrels a day in 2005, which was about 16 per cent of total U.S. imports and well ahead of second-place Saudi Arabia's 1.5 million barrels daily. energy trade and investment message from Melchin and Alberta's envoy in Washington, former provincial energy minister Murray Smith:
Canadian oil sands are crucial to US oil supplies Lowe, 08 [John; Executive Vice President, Exploration and Production, ConocoPhillips—Before the Select Committee on Energy Independence and Global Warming U.S. House of Representatives, http://www.conocophillips.com/NR/rdonlyres/ B4168205-5A4E-473E-A78D-8F561FC4BD25/0/Markey_Testimony_written.pdf] Heavy oil The Canadian oil sands are projected to become an increasingly important source of oil for the United States, particularly considering recent declines in heavy oil production in Mexico, Venezuela and California. The Canadian oil sands are projected to approach 20 percent of U.S. oil supplies by 2020.8 ConocoPhillips has a leading land position in the Canadian Athabasca oil sands and is actively investing to produce this oil, and then transport it to the United States for processing at our refineries. We have access to over 15 billion barrels of net potential oil resources, and plans are in place to increase our net production to about 400,000 barrels per day over the next decade. In 2008 alone, we are spending $900 million in development capital on the Canadian oil sands.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
82
Canadian Oil Shales Good—Dependence Canadian oil shale eliminates mid-East dependence and lowers prices. The Heritage Foundation 07 [ Daniel Fine PhD., “Oil Shale: Toward a Strategic Unconventional Fuels Supply Policy”, March 8, http://www.heritage.org/Research/EnergyandEnvironment/hl1015.cfm] The national security argument, or the energy security argument, centers on foreign oil import dependency. If shale is commercialized by 2012, we can, under production from Colorado alone, eliminate dependency on Middle East oil by 2020. The President wants to lower it by 20 percent by 2017. Shale production will eliminate it altogether, and that dependence is roughly 2.3 million barrels a day. The projection is that when it is commercialized, with the ramp-up that will occur, and with everything favorable—that is, world price—we would be at 2 million barrels a day, or the objective of the Department of Energy in the shale process. Currently, we're getting 2.2 million barrels a day from the entire Middle East: 19 percent of our total imports. Our major sources of imports are Canada and Mexico—that is, North America—and oil shale would expand a North American domestic energy source, which minimizes and reduces foreign oil dependency with GDP benefits to the American people. Some of the projections are that when shale is commercialized in the next three to five years, the market price will decrease at least $5 a barrel. That's conservative, but that depends on supply and demand worldwide and the growth of economies worldwide. Oil shale will eliminate foreign oil dependence Fine, ’07 (Daniel, co-editor of Resource War in 3-D: Dependence, Diplomacy and Defense, “Oil Shale: Toward a Strategic Unconventional Fuels Supply Policy,” The Heritage Foundation, April 26, http://www.heritage.org/Research/EnergyandEnvironment/hl1015.cfm, Accessed 06-30-08) How long can oil shale last? There is enough shale to sustain United States consumption of crude oil easily through 2120. One of the arguments in the energy security debate has been foreign oil import dependence. Some elements of the national security community in Washington have joined the alternative fuels community, the biofuels community, under the notion that we are dependent upon potentially hostile supply sources after 9/11, which could be disrupted or politically manipulated. The national security argument, or the energy security argument, centers on foreign oil import dependency. If shale is commercialized by 2012, we can, under production from Colorado alone, eliminate dependency on Middle East oil by 2020. The President wants to lower it by 20 percent by 2017. Shale production will eliminate it altogether, and that dependence is roughly 2.3 million barrels a day. The projection is that when it is commercialized, with the ramp-up that will occur, and with everything favorable—that is, world price—we would be at 2 million barrels a day, or the objective of the Department of Energy in the shale process. Currently, we're getting 2.2 million barrels a day from the entire Middle East: 19 percent of our total imports. Our major sources of imports are Canada and Mexico—that is, North America—and oil shale would expand a North American domestic energy source, which minimizes and reduces foreign oil dependency with GDP benefits to the American people. Some of the projections are that when shale is commercialized in the next three to five years, the market price will decrease at least $5 a barrel. That's conservative, but that depends on supply and demand worldwide and the growth of economies worldwide.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
83
Canadian Oil Shales Good—Dependence Oil shale solves US energy independence for the next 400 years. Henry, 07 (Darrell Henry, contributing editor, Western Business Roundtable. “Oil Shale: The Future of U.S. Energy Security” 11-16-07. http://www.redorbit.com/news/science/1146906/oil_shale_the_future_of_us_energy_security/index.html) Total world resources of oil shale are estimated at 2.6 trillion barrels of oil, with the Green River formation in Colorado, Utah and Wyoming containing an estimated 1.2 trillion to 1.8 trillion barrels- the largest deposits in the world. Even by conservative estimates, there are 800 billion barrels of recoverable oil from oil shale in the area, an amount three times greater than the proven oil reserves of Saudi Arabia. INCREASED DOMESTIC ENERGY SECURITY Energy independence is essential to preserve America's economic strength and national security. A recent report by the U.S. Department of Energy is the latest reminder that reducing our dependence on foreign imports of oil and refined products is essential to achieving the energy security objective. Import reductions can be achieved in two fundamental ways: by reducing demand for oil through conservation and efficiency, and increasing production of fuels from domestic resources, including alternatives, biofuels and unconventional fuels. Oil shale has the potential to increase domestic energy security and make the U.S. less reliant on foreign sources of energy. "The disturbing irony is that the world epicenter of anti- American hatred and terror is also the epicenter of our number one source of energy," said former New York Governor George Pataki. In public opinion poll after poll, an overwhelming majority of citizens-nearly 85%-express strong support for weaning the U.S. from increasing foreign energy addiction. They want America to be as energy independent as possible. Soon, new American technologies can help Western oil shale do just that. 21ST CENTURY TECHNOLOGY The greatest challenge to realizing the vast potential of oil shale in Colorado, Utah and Wyoming has been technology, extracting the resource in an economically viable and environmentally responsible way. With U.S. demand for petroleum products topping 20 million barrels per day, oil shale could be used to meet a quarter of that demand-800 billion barrels of recoverable resources, which would last more than 400 years. A new era has begun for Western oil shale. We are closer to finding viable techniques for extracting the resource in an economically feasible and environmentally responsible way, with cutting-edge research and development under way by private companies in the region. Oil shale must be mined and processed to generate oil similar to that pumped from the ground, but extracting oil from oil shale is more complex than conventional oil recovery and historically, more expensive. There are several methods to extract oil from shale; some are advancements to traditional techniques while others are being tested for the first time in the Green River formation. Some companies are using new technology to improve on the traditional method of accessing oil shale. Oil shale is first mined and then heated to a high temperature (retorting); the resulting liquid is then separated and collected. An alternative experimental process is referred to as "in-situ retorting." This involves heating the oil shale while it is still underground and then pumping the resulting liquid to the surface. Shell Oil Co. has U.S. Bureau of Land Management research and development leases and is moving stage-by-stage to prove up and resolve the issues around extraction of shale through a proprietary process known as "thermally conductive in-situ conversion." Shell has carried out a small field-test, the Mahogany Demonstration Project South, on its private property in Rio Blanco County, Colorado, using an in-ground heating process to recover oil and gas from the shale formation. The process involves heating underground oil shale using electric heaters placed in deep vertical holes drilled through a section of oil shale. The volume of oil shale is heated during a period of two or three years until it reaches 650[degrees]F to 700[degrees]F, at which point oil is released from the shale. The released product is gathered in collection wells positioned within the heated zone. The field results have given confidence in Shell's insitu conversion process. A commercial decision on using this technology is anticipated early in the next decade, though possibly later depending on the sequence and outcome of research activities. THE EFFECT OF EPACT 2005 Without the oil-shale provisions in the Energy Policy Act of 2005 (EPACT 2005), federal oil shale land would remain unavailable to the private sector, as it has since 1930 when President Herbert Hoover issued Executive Order No. 5327, withdrawing oil shale from leasing. Even though President Harry S. Truman issued Executive Order No. 10355 in 1952, authorizing the Secretary of the Interior to rescind the Hoover order and lift the moratorium, to date it has not been lifted. (Limited leasing agreements in the 1970s were "prototypes" constructed so as not to have the effect of lifting the moratorium.) With EPACT 2005, Congress provided clear direction in federal energy policy by instructing the Department of the Interior to develop a commercial leasing program and lift the leasing moratorium. With the exception of Shell, which is operating on private property, there has been no significant money put into oil- shale development on federal land since the prototype program in the 1970s. EPACT 2005 was passed in August 2005, prior to the deadline for application of the leases in September 2005, and it is generally agreed among applicants and observers that it was the passage of EPACT 2005 and the prospect of obtaining additional contiguous acreage that generated enthusiasm for the experimental lease applications. Some members of Congress wish to restore the barriers that have been in existence for nearly a century. If Congress succeeds in re- enacting barriers, we can expect the following: * America's commercial oil-shale production will continue to be sidelined until the federal government provides clarity in its regulatory regime and leasing program; * industry, and, more importantly, Wall Street, will perceive the proposed legislation as hostile to oil shale. This is a dangerous direction and could slow or halt any investment until favorable government policy is expressed; * current lessees are likely to be discouraged from making large investments. In the case of the Utah lease, the 5,120-acre preference may not be sufficient to support a full-scale operation. Without a clear path to
* loss of oil shale as one of our domestic resources will exacerbate a future supply crisis. As we've seen from hurricanes Katrina and Rita in 2005 and the conflicts in the Middle East, the U.S. is highly vulnerable to supply disruptions, and with continued competition for the world's oil supply from China, India and other burgeoning economies, there is some urgency to begin the process. development, investors prudently will likely hold back from investing further in oil shale; and
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
84
Canadian Oil Shales Good—Dependence Oil shale development will eliminate energy dependence by 2020. Fine, 07 (Daniel Fine, Ph.D., Co-editor of Resource War in 3-D: Dependence, Diplomacy and Defense, lecture at the Heritage Foundation. “Oil Shale: Toward a Strategic Unconventional Fuels Supply Policy” 4-26-07. http://www.heritage.org/Research/EnergyandEnvironment/hl1015.cfm) How long can oil shale last? There is enough shale to sustain United States consumption of crude oil easily through 2120. One of the arguments in the energy security debate has been foreign oil import dependence. Some elements of the national security community in Washington have joined the alternative fuels community, the biofuels community, under the notion that we are dependent upon potentially hostile supply sources after 9/11, which could be disrupted or politically manipulated. The national security argument, or the energy security argument, centers on foreign oil import dependency. If shale is commercialized by 2012, we can, under production from Colorado alone, eliminate dependency on Middle East oil by 2020. The President wants to lower it by 20 percent by 2017. Shale production will eliminate it altogether, and that dependence is roughly 2.3 million barrels a day. The projection is that when it is commercialized, with the ramp-up that will occur, and with everything favorable—that is, world price—we would be at 2 million barrels a day, or the objective of the Department of Energy in the shale process. Currently, we're getting 2.2 million barrels a day from the entire Middle East: 19 percent of our total imports. Our major sources of imports are Canada and Mexico—that is, North America—and oil shale would expand a North American domestic energy source, which minimizes and reduces foreign oil dependency with GDP benefits to the American people. Some of the projections are that when shale is commercialized in the next three to five years, the market price will decrease at least $5 a barrel. That's conservative, but that depends on supply and demand worldwide and the growth of economies worldwide. There's been a great deal of excitement about biofuels, and as you know, in Mexico and New Mexico and Arizona, the prime base for a staple tortilla is white corn. Because of the biofuels investment, U.S. farmers are beginning to turn their crops from food to fuel, and white corn has almost disappeared from the market. Even though Mexico has a NAFTA quota of 460,000 tons a year, Mexico is not getting it, so the price of tortilla corn in Mexico has had people demonstrating in the street and has caused low-income families difficulties in buying daily bread. I introduce that in contrast to the notion that we have a resource that has no impact whatsoever on food supply. Canadian oil shale eliminates mid-East dependence and lowers prices. The Heritage Foundation 07 [ Daniel Fine PhD., “Oil Shale: Toward a Strategic Unconventional Fuels Supply Policy”, March 8, http://www.heritage.org/Research/EnergyandEnvironment/hl1015.cfm] The national security argument, or the energy security argument, centers on foreign oil import dependency. If shale is commercialized by 2012, we can, under production from Colorado alone, eliminate dependency on Middle East oil by 2020. The President wants to lower it by 20 percent by 2017. Shale production will eliminate it altogether, and that dependence is roughly 2.3 million barrels a day. The projection is that when it is commercialized, with the ramp-up that will occur, and with everything favorable—that is, world price—we would be at 2 million barrels a day, or the objective of the Department of Energy in the shale process. Currently, we're getting 2.2 million barrels a day from the entire Middle East: 19 percent of our total imports. Our major sources of imports are Canada and Mexico—that is, North America—and oil shale would expand a North American domestic energy source, which minimizes and reduces foreign oil dependency with GDP benefits to the American people. Some of the projections are that when shale is commercialized in the next three to five years, the market price will decrease at least $5 a barrel. That's conservative, but that depends on supply and demand worldwide and the growth of economies worldwide.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
85
Canadian Oil Shales Good—Economy Developing the oil shale industry would have huge economic benefits. Henry, 07 (Darrell Henry, contributing editor, Western Business Roundtable. “Oil Shale: The Future of U.S. Energy Security” 11-16-07. http://www.redorbit.com/news/science/1146906/oil_shale_the_future_of_us_energy_security/index.html) Development of this vast domestic resource could supply the U.S. energy needs for up to 400 years. This presents an opportunity to improve the national energy security position and reduce the instability caused by dependence on foreign sources of energy. Oil shale's economic benefits would be substantial, not just to our impacted communities, but to American consumers at large. Based on a 3-million-barrel-per-day production rate, estimates are the industry would generate: * $20 billion annually in revenues through lease bonus payments, royalties on production and corporate income taxes. Roughly half of those profits would likely go to federal, state and local governments; * several hundred thousand jobs in direct industry employment, plus the associated ripple effect; and * an estimated 3% to 5% decline in, world oil prices, which would benefit consumers and business users in the U.S. by about $15 billion to $20 billion a year.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
86
AT: Oil shales not viable Technological progress makes oil shales viable. Fine, 07 (Daniel Fine, Ph.D., Co-editor of Resource War in 3-D: Dependence, Diplomacy and Defense, lecture at the Heritage Foundation. “Oil Shale: Toward a Strategic Unconventional Fuels Supply Policy” 4-26-07. http://www.heritage.org/Research/EnergyandEnvironment/hl1015.cfm) Why should we not call shale an official strategic fuel in the United States, and why not commercially develop it in a most aggressive way? The technology issue is moving significantly in terms of progress. For example, one major development is the Shell Oil project in Colorado. Shell has established some leadership; it has been in Colorado for 30 years. It has invested, in terms of research and development, a significant amount of its own revenues and is moving toward commercialization. Shell has Bureau of Land Management research and development leases and is moving stage by stage to prove up and resolve all the issues around extraction of shale through a proprietary process called the in-situ conversion process. Understanding ICP requires a visualization that eliminates the surface retort heating and disposal of shale rock as a mining-industrial process. Shell is going underground. The refinery of shale will be underground, with almost no surface impact. This is a breakthrough change in technological capability, and it makes shale accessible. Shell is confident that it can recover shale oil with the price of West Texas intermediate oil at around $25 a barrel. Older studies have always argued—again, using the 1970s know-how and data—that surface processing would create prohibitive costs extending to intractable problems of reclamation; and water use in the older studies, as I said, was projected at three barrels of water to one barrel of oil shale oil. However, Shell is going underground into the shale formation with electrical heaters. The U.S. can transition to oil shale production Feulner, ’07 (Edwin J., President of the Heritage Foundation, “Ethanol isn't worth getting pumped up about, but oil shale might be,” March 22, The Heritage Foundation, http://www.heritage.org/Press/Commentary/ed032107a.cfm, Accessed 0630-08) Fortunately, there's another possibility. If scientists can overcome some technological challenges (as well as environmental objections), oil shale has the potential to provide more than a trillion barrels of domestic oil. Dr. Daniel Fine of MIT recently reported that 750 billion barrels worth of oil shale have been discovered so far in Colorado alone. That's enough to power the U.S. economy through 2030. In fact, he says, if we begin full-scale production within five years, we could completely end our dependence on OPEC by 2020. Instead of supporting thugs such as Venezuelan President Hugo Chavez, we could leave them high and dry. Of course, there's a reason the U.S. economy doesn't already run on oil shale: It's difficult to collect and refine. But technology is changing that. Fine points out that Shell Oil has developed a technique that uses underground heaters to transform crude oil shale into burnable petroleum before it's even brought to the surface. This allows it to be extracted with far less above-ground pollution. Meanwhile, Chevron came up with technology that uses significantly less water to cool the refining machinery. That means processing oil shale is becoming environmentally safer and less expensive. And speaking of the environment: These methods of harvesting oil shale force excess carbon back into the ground, so even Al Gore should support them. Plus, they're becoming more cost-effective every year. Fine estimates we eventually could produce a barrel of oil for $25. And, he says, the Defense Department has found that shale actually produces jet fuel that is far better than average.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
87
Canadian Tar Sands Good—Gas Prices Current investments in Canadian tar sand derived oil will help stabilize gas prices Evanoff, 6 [Ted, Knight Ridder Tribune Business News, Proquest, 9/21] Maybe you never think of where it comes from, but there's probably West Texas sweet in your car's gas tank, or Saudi light. And soon you may have Alberta tar. Many Indianapolis drivers will burn more gasoline made from Canadian tar sand, a move that might help stabilize pump prices a bit, once London oil giant BP upgrades a massive oil refinery near Gary. The company's BP America unit Wednesday pledged $3 billion over four years, starting in 2007, to reconfigure its 1,400-acre plant at Whiting for more Canadian crude while vulnerable deliveries diminish from Texas and the Middle East. Known as BP Whiting, the largest U.S. inland refinery will be reworked to run on 90 percent Canadian heavy crude piped 1,600 miles to Northwest Indiana from near Fort McMurray, Alberta. "Energy security is one of the key elements," said BP Whiting spokesman Tom Keilman. "This will give us more capability to refine more crude from the oil sands." Canada, already the United States' largest crude supplier, is stepping up output at a time when Americans nationwide have grown more concerned about energy independence. Texas' oil reserves are tapping out. And U.S. supplies can appear at risk from Middle East political turmoil as well as the storm- prone Gulf of Mexico. After Hurricanes Katrina and Rita lashed the Gulf Coast last year, gas prices shot above $3 a gallon nationwide. Those record gasoline prices, though, have set off an oil boom in Canada's Alberta province. Oil geologists say some 85,000 square miles of sand beneath forests of spruce and fir are loaded with oil tar. It's the largest proven oil reserve after Saudi Arabia. Plans are afoot to invest as much as $110 billion on the oil sands. In terms of spending, it would be the world's largest industrial development. It would bring sand to the surface, remove the grit, bury waste in a landfill and pump the resulting crude oil to refineries. China is considering its own pipeline from Alberta to Canada's Pacific coast, though the United States is Alberta's largest customer. Daily, about 1.7 million barrels of Canadian crude enter the United States, or about 9 percent of total U.S. consumption. Developments now planned in Alberta could double Canada's flow to the United States. If that happens, Canada would sell more oil to the U.S. than Saudi Arabia and Venezuela combined. Once the Whiting project is completed, Keilman said, Canada will supply up to 90 percent of BP Whiting's crude, compared with about 30 percent now. The plant daily refines 16 million gallons of petroleum products, including about 9 million gallons of gasoline. The new equipment will raise the 1,300-employee refinery's gasoline output about 15 percent, Keilman said, and could help ease the price spikes that result from shortages in crude supplies. BP Whiting will continue output over the next four years without a break while the new technology is installed, Keilman said. "It doesn't mean Indianapolis is going to be in a better position than Chicago if there's a catastrophe that interrupts oil supplies from the Gulf," said Maggie McShane, executive director of the Indiana Petroleum Council, a trade group. "It does mean our reliance as a region on a source of petroleum is better."
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
88
Canadian Tar Sands Good—AT: Environment Tar sands would drastically improve US energy security – environmental costs are exaggerated. Owens, 08 (Mackubin T. Owens, Adjunct Fellow of the Ashbrook Center, a professor of national security affairs at the Naval War College in Newport, RI, and editor of Orbis, the journal of the Foreign Policy Research Institute.) World demand for oil continues to grow—and is likely to keep on climbing. While economic growth in China and India is the source of much of this increase in demand for oil, US demand is also part of the equation. Americans currently consume about 20 million barrels of oil daily, of which about 60% is imported. The Energy Information Administration (EIA) expects imports to reach 70% by 2025. The reason: domestic oil production is projected to fall 17% by 2025 (assuming no production from the Arctic National Wildlife Reserve). To make matters worse, the world’s spare production capacity is at its lowest level in 30 years, equal to only one percent of world demand, making the market extremely sensitive to political and economic uncertainty, hurricanes, and terrorism. This situation threatens US energy security. Energy security is not to be confused with "energy independence." While energy independence is a pipe dream, energy security is achievable. The key to enhanced energy security is an increase in the supply of energy. Unfortunately, energy security is often sacrificed because of environmental concerns. A case in point is the exploitation of "oil sands," geologic formations containing deposits of bitumen (heavy crude oil)—a viscous, solid or semisolid form of crude oil that does not easily flow at normal ambient temperatures and pressures, making it relatively difficult and expensive to process into gasoline, diesel fuel, and other products. Canada possesses substantial oil sands. Indeed, Canada’s oil sands reserves are approximately equal to the world’s total reserves of conventional crude oil. According to oil industry analysts, 174 billion barrels of crude oil is trapped in the oil sands of Alberta. Since Canada is our No. 1 source of imported oil, the Alberta oil sands constitute a vast, secure, and reliable supply of crude oil, which also creates thousands of well-paying jobs. Currently, about 1 million barrels per day are piped from Alberta to U.S. refineries in the Midwest and Gulf Coast, and several refineries and pipelines are investing heavily to increase their refinery and pipeline capacity so they can use more of the Canadian oil sands, with planned expansion to three million barrels per day by 2015. Such investments will increase America’s energy security and reliability, reducing the risk of supply disruptions. But the exploitation of oil from oil sands oil typically requires enhanced extraction and refining methods, which has led environmental groups and some public policy makers to raise concerns about the environmental consequences both of the Canadian oil sands mining process and expansion of petroleum refineries capable of refining crude oil from oil sands, particularly in the Midwest. Arguing that expanding the use of oil from oil sands will result in the destruction of the Canadian Boreal Forest and increase greenhouse gases, environmental groups have issued challenges to the environmental permits required for oil sands extraction and refinery expansion. Such environmental challenges to the expanded use of oil sands pose a real danger to U.S. energy security, while doing little if anything to reduce global greenhouse emissions. Since refining oil sands is capital intensive, refiners need to have certainty regarding the availability of the resource. Such regulatory roadblocks make it less likely that oil companies will make the necessary investments to exploit this vast resource. In addition, challenges by environmentalists are likely to be used as precedents for hampering development of tar sands in California and the substantial deposits of oil shale in the American West. The fact is that it is possible to extract, refine, and transport crude oil from oil sands in an environmentally responsible manner. Oil companies have developed mitigation measures that conform to permit constraints based on current rules and regulations. The public must understand that the additional mitigation measures demanded by environmental groups may make the exploitation of oil sands less economically viable, undermining US energy security. Of course, environmental concerns are valid, but they need to be placed in proper context. All economic decisions involve "trade-offs." Unfortunately, environmentalists often act as though the value of a pristine environment is infinite, permitting no trade-offs at all. When such a view takes hold in policy debates, the consequences can be severe. Environmental concerns have become a centerpiece of the US political economy, but they must be balanced against the requirement for affordable energy and energy security.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
89
DA Turns case—energy prices Disad turns the case: production of refining capabilities is vital to lowering energy prices overall Lowe, 08 [John; Executive Vice President, Exploration and Production, ConocoPhillips—Before the Select Committee on Energy Independence and Global Warming U.S. House of Representatives, http://www.conocophillips.com/NR/rdonlyres/ B4168205-5A4E-473E-A78D-8F561FC4BD25/0/Markey_Testimony_written.pdf] We must point out that as our nation develops policies to increase supplies of renewable and alternative energy supplies, we must not overlook the vital need to also encourage the development of conventional supplies of oil and natural gas. To focus strictly on one and not on both, is certain to create supply problems in the near future. As Congress periodically debated the architecture of a national energy policy, the industry has consistently stressed the need for more resource access. Gaining this access is, in fact, critical to lowering energy prices. Yet, domestic access restrictions are increasing. To illustrate this point, during the most recent energy bill debate, the House of Representatives voted to ban drilling in Colorado’s Roan Plateau Basin, a potentially prolific natural gas producing area, further decreasing the areas of the U.S. accessible to resource development. Development of domestic natural gas offers the dual benefits of improving U.S. energy security and lowering carbon dioxide emissions. We cannot see a viable policy solution to either challenge without an increased role for domestic natural gas.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
90
AT: Alt energy solves need for fossil fuels Our evidence is comparative—investing now in oil refineries is better for the short term than alternative energy Lowe, 08 [John; Executive Vice President, Exploration and Production, ConocoPhillips—Before the Select Committee on Energy Independence and Global Warming U.S. House of Representatives, http://www.conocophillips.com/NR/rdonlyres/ B4168205-5A4E-473E-A78D-8F561FC4BD25/0/Markey_Testimony_written.pdf] ConocoPhillips believes there are several concrete steps that Congress can take to enhance the nation’s future energy security. We want to first emphasize that despite the current tight market, the world is not short of energy supplies. Rather, it lacks sufficient political will to develop the vast fossil fuel and alternative resources that are available. Additionally, it is vital to point out that there is no “silver bullet” that would quickly and inexpensively replace fossil fuels and create energy security. Instead, the United States must bring all economic sources of energy to the marketplace. Doing so will require strong political leadership and determination, as well as, sound insight into the realities of the energy market. We need no less than a national commitment to achieve security of both near- and long-term energy supply and policies that outline a clear path to follow. ConocoPhillips believes that a sound U.S. energy policy must incorporate the six actions explained below. Encouraging conventional supplies Although the United States has only 3 percent of the world’s remaining oil and natural gas proved reserves, this is due in part to governmental policy. We could increase U.S. reserves by drilling in the vast onshore and offshore areas that are currently off limits. Altogether, these areas are estimated to hold 80 billion barrels of recoverable oil and natural gas equivalent – enough to double current U.S. reserves. Industry critics frequently charge that since one area or another only offers a few months or years of supply, it should not be developed. ConocoPhillips believes that it is economic folly to instead transfer $8 trillion dollars – the possible market value of these potential resources at current oil prices – to other countries through imports instead of keeping that money at home and gainfully employing thousands of Americans. Unless Congress acts to improve access to domestic resources, the United States must accept oil import dependence at the current rate of about 60 percent, or even higher in the future. Therefore, the federal drilling moratoria on non-sensitive lands should be suspended and rilling allowed under strict environmental oversight. Industry technology and operating practices have made quantum leaps in the years since these moratoria were enacted. Our national vulnerability no longer allows the luxury of ignoring so much energy potential. It is often said by those opposed to providing more access that, “We cannot drill ourselves out of our domestic energy situation.” That is true, as is the fact that, “We cannot expect an aggressive program to develop alternative and renewable fuels to provide needed energy security overnight no matter how aggressively we develop them.” A balance of both is required. To satisfy projected demand, the United States and the world also need OPEC nations, and particularly those with large reserve holdings, to expand their production capacity. We are concerned about the mixed signals that U.S. policymakers are giving these countries. On one hand the United States urges them to increase production, while on the other it threatens to back out a substantial portion of Middle East oil imports, or to sue OPEC. These countries may not expand their production capacity to the extent that is needed if they do not believe there is a sustained market for their crude oil. Congress should also facilitate the building of the critical infrastructure needed to deliver energy supplies to the public. The United States needs more ethanol unloading and blending terminals, more pipelines and power transmission lines, and more refinery expansions. But duplicate and overlapping federal and state laws, and overly long and difficult regulatory processes, discourage or delay such infrastructure additions, particularly for refineries. For example, ConocoPhillips applied in May 2006 for a permit to expand our Wood River refinery in Illinois, and we still do not have a final permit. At our refinery in Wilmington, California, local permit challenges and litigation have threatened an ultra-low-sulfur diesel fuel project since 2004. An expansion at our Rodeo refinery near San Francisco took 28 months to permit and only after a compromise was reached with the state Attorney General. These expansions are designed to increase supplies of transportation fuels – precisely as Congress would wish. In cases like these, where infrastructure is clearly needed to serve the national interest, Congress should expedite federal and state permitting processes to ensure a balance between federal, state and local and special interests.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
91
AT: Alt energy solves need for fossil fuels Ignoring fossil fuel investments for alternative energy will drive up energy prices Lowe, 08 [John; Executive Vice President, Exploration and Production, ConocoPhillips—Before the Select Committee on Energy Independence and Global Warming U.S. House of Representatives, http://www.conocophillips.com/NR/rdonlyres/ B4168205-5A4E-473E-A78D-8F561FC4BD25/0/Markey_Testimony_written.pdf] With potential advances in technology and infrastructure improvements, these obstacles can be overcome, but we must realize that alternatives cannot be developed overnight and that our dependence on conventional resources will continue into the foreseeable future. Overestimating how quickly the United States can transition to new fuels will likely lead to inadequate development of conventional supplies and higher prices at the pump. Most energy demand projections indicate that even with rapid penetration of alternative- energy technologies, accompanied by substantial reductions in carbon dioxide emissions, fossil fuels must still supply at least two-thirds of global energy by 2030.2 Indeed, there is an apparent misunderstanding of the enormous scale of fossil-fuel use – for example, the world currently consumes 86 million barrels per day of oil – or 40,000 gallons per second. There is also a lack of understanding of the enormous scale of existing infrastructure or the ongoing investment required merely to maintain existing production. For example, the United States has 200,000 miles of oil pipelines and 280,000 miles of natural gas pipelines that required a century of construction.3 Oil and natural gas must serve as important bridge fuels as we move toward alternative sources. If the United States is to improve its energy security, Congress must ensure that the nation has sufficient conventional oil and gas supplies, even as it works to develop alternative energy supplies. Figure 1 below shows how much oil production will need to be added to replace the decline in existing conventional oil production and expand supplies. It will take unprecedented investment to achieve the production levels required to satisfy global oil demand. In fact, the International Energy Agency estimates that through 2030, nearly $10 trillion of investments in oil and natural gas exploration and production, refining, transportation and infrastructure will be required, averaging about $400 billion annually.4 Continued fossil fuel investments are vital to sustain energy supplies—we will need it for at least a decade before alternative energy can fill in Lowe, 08 [John; Executive Vice President, Exploration and Production, ConocoPhillips—Before the Select Committee on Energy Independence and Global Warming U.S. House of Representatives, http://www.conocophillips.com/NR/rdonlyres/ B4168205-5A4E-473E-A78D-8F561FC4BD25/0/Markey_Testimony_written.pdf] Fossil fuels will continue to provide an important bridge to the time when alternative energy sources are available in significant quantities. This bridge is likely to be necessary for decades given the scale of the world’s current energy consumption and the massive infrastructure investment and construction that would be needed to replace existing energy infrastructure. Thus, it is important that the energy industry retain the capability and opportunity to invest sufficient capital in economically attractive traditional oil and gas opportunities in order to continue meeting U.S. and global energy demand.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
92
AT: Alt energy solves demand for oil/gas Demand for oil and gas is inevitable—lack of refineries guarantees that we won’t be able to meet that demand Porter, 7 – Michelle, Telegraph-Journal, 1/26, “Irving project shows faith in oil demand, says analyst” Lexis Irving Oil's proposal for a new refinery in Saint John signals a confidence that consumption of petroleum will not flag in the coming decades. "In ten, twenty and thirty years people are going to still be driving their cars," predicted Kevin Scott, director of refining growth for Irving Oil Ltd., during a press conference Thursday after announcing that the company has filed an application for environmental permits from federal and provincial governments for the project. "The demand isn't going to change a whole lot." It's a confidence that Halifax-based oil industry consultant Bill Simpkins says is not misplaced. Recent discussions surrounding energy efficiency - including U.S. Presdient George W. Bush's announcement that the United States will cut back on gasoline consumption by 20 per cent - are not new, Simpkins said Thursday. "This reminds me of discussions back in the '70s," he said. "We have had a lot of these discussions around conservation, but it really isn't changing demand. We continue to have this love affair with large vehicles." Prices are fluctuating, he said, citing prices that have dropped from the $70US range to the mid-$50 range (light sweet crude futures for March delivery closed at $54.23 Thursday). But, Simpkin said, a drop in demand is nowhere in sight. "What are we going to replace petroleum with?" he asked. "Right now there's nothing there that will replace petroleum products." Simpkins believes that the investment in a second oil refinery is one that will pay off because alternative energies are not yet ready to overtake petroleum. "While there will always be a place for alternative energy, until we become a hydrogen or fuel-cell society there will always be a demand for petroleum products." Scott said Irving looked at the impact of conservation efforts upon demand when it considered the viability of the project. The company concluded that "ultimately petroleum will form the main energy source for North America for many years to come," he said. Despite President Bush's announcement, Scott is confident that the United States will remain the major buyer of Irving's gasoline.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
93
Uniqueness: no refinery expansion now Massive regulations and lawsuits are holding up refinery construction. States News Service, 08 (It’s Past Time to Expand Domestic Refining Capacity, June 20, lexis) A new refinery has not been built in the United States since 1976, and the refineries that we do have are operating at or near capacity. In fact, in 2007, according to the Energy Information Administration, the United States imported 148 million barrels of finished gasoline for use in our cars and trucks. That is on top of the billions of barrels of crude oil we imported. For too long, we have not taken the proper steps to strengthen the energy infrastructure here in the United States that will make us energy secure. Instead, for decades now, we have depended on oil, both crude and refined, from abroad. Often times, this oil comes from unfriendly nations, and the money we send to these states gets used in nefarious ways against our very own interests. The time has come to make the investments in our nation's energy infrastructure to help reduce our dependence on foreign oil. There is no doubt, we must continue to invest in the future with renewable and alternative technologies like wind, solar, biomass, geothermal and the like. But we need more time to invest in these technologies. In fact, renewable energy sources-hydroelectric, geothermal, wind, solar, and biomass- only met about 7 percent of America's total energy needs in 2006, according to the Energy Information Administration. No matter how much we would like to say we can quickly wean this nation off it's addiction to fossil fuels, there simply is no quick fix. So, in the mean time, while we continue to develop the renewable and alternative technologies of tomorrow, we must produce more fuel here at home today. However, even if we were to produce more oil, we simply do not have the capacity to refine it in order to turn it into the fuel we use to power our cars and trucks. Massive regulations and skyrocketing litigation costs have prevented the construction of a new refinery for over three decades.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
94
Uniqueness—no investments now Oil companies are not investing in refineries now because of fear of declining demand. The Canberra Times, 2007 (Why oil companies are not investing in more refineries, May 24, lexis) The recent rise in oil prices is attributed to refinery shortages in the US ("Fuel prices set to spike", 22 May, p7). The really interesting question is: why has inadequate refining capacity in the US now led to rising prices, when this factor has not operated in the past. (Witness the very low global oil prices until the last four years or so). Why is it that, in recent years, oil companies, in the world's biggest oil market by far, have not undertaken the level of new investment which is more than adequate to meet demand, as they have always done in the past? There is one fundamental reason for this: they are not willing to risk the massive investment dollars required, when they are not really confident that there will be the strong, increasing volume of oil throughput needed to justify this investment. In other words, when it comes to the acid test, oil companies have shown that they are not confident that there will be increasing volumes of oil available, as in the past.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
95
AFF—AT: Oil refinery DA Refining capacity is irrelevant—it’ll have no impact on oil and gas prices Davidson, 8 – Paul, Staff Writer, USA Today, “Oil refineries can't keep pace with demand” 6/13, Lexis No new refinery has been built in the United States in the past 32 years. Capacity at existing refineries has increased about 1% a year, failing to keep pace with demand, says Aaron Brady, a Cambridge Energy Research Associates analyst. Until recently, the tight supplies and surging demand allowed refiners, such as major oil companies, to charge a premium of about $9 a barrel of oil, or 21 cents per gallon of gasoline, Brady says. This year, however, high crude oil prices and lower U.S. demand have forced refiners to live with razor-thin margins. That means if crude prices fall, some of the drop could be offset by higher profits for refiners. The good news: Refiners worldwide are sharply expanding capacity. Oil consortium Motiva plans to double capacity at its Port Arthur, Texas, facility by 2010, creating the largest U.S. refinery. Most of the new equipment is designed to process heavy crude oil, which is more abundant and cheaper than light, sweet crude but more expensive to refine. The bad news: Refining makes up just 10% of the price of gas, so boosting capacity won't help much. "Adding refining capacity is not going to have a significant impact on the price of gasoline," says Kevin Lindemer of financial analysts Global Insight. And much of that refining infrastructure will take three to five years to build, says analyst Robert Linden of Pace Global Energy Services. Even so, it should help stabilize gasoline prices if crude oil costs fall or a hurricane shuts down Gulf Coast refineries, Brady says. No impact to oil refinery investment—capacity is high no matter what Robertson, 8 – Peter, Vice Chairman of the Chevron Corporation, “Rising Gasoline Prices,” Committee on House Judiciary Subcommittee on Antitrust & Competition Policy Task Force, CQ Congressional Testimony, 5/22, Lexis In the U.S., consumers have begun to respond to the high fuel prices by using less. Recent figures from EIA suggest that petroleum product demand in the U.S. has fallen 1.4 percent over the first two months of the year, compared with the same period last year. Gasoline production at U.S. refineries was at record levels over the first quarter of 2008, leaving inventories at their highest levels in a decade. Capacity increases at existing refineries have added the equivalent of 10 new refineries over the past decade. Overall refining capacity has increased by 20 percent since 1985 even though there are 57 fewer refineries (See Appendix chart #7). That retail fuel prices still remain high underscores the fact that many factors are in play, and, unfortunately, there are no short-term fixes to today's price levels. Finally, it is important to note that the U.S. transportation fuel markets are not only well supplied but also highly competitive. We are the sixth largest U.S. refiner and operate five of the nation's roughly 150 refineries. Our market share is less than six percent. Marketing operations are similarly competitive. Chevron is the fourth largest U.S. branded marketer operating under the Chevron and Texaco brands. We have roughly 9,700 of the country's 168,000 branded stations. And it's important to note that 95 percent of our stations are operated by independent business people, who must compete aggressively against at least 40 other companies.
Increased production can’t stop runaway oil prices. Reuters, June 17, (byline Mariam Karouny and Alastair Sharp, “Oil supply boost won't lower prices: Iraq,” Reuters, http://www.reuters.com/article/GCA-Oil/idUSL172587220080617?sp=true, Accessed 06-30-08) Any increase in world oil output would not have a significant impact on record-high crude prices that are being driven by speculation, Iraq's oil minister said on Tuesday. Regulations needed to be introduced to stabilize oil markets, Hussain alShahristani said in an interview with Reuters. "I do not think increasing any amount in the international market will have a significant impact on the prices," he said. "It is up to the stock exchange and the regulations in the industrialized nations. It is not something OPEC can contribute to," he said. "We did not see any impact on the prices from the Saudi's previous increase," he said. Top oil exporter Saudi Arabia is poised to boost production in July to its highest level in decades as it looks to tame runaway oil prices. Saudi Arabia already raised output in May. Oil prices have doubled in a year to hit a record close to $140 a barrel on Monday. Saudi Arabia has called a hastily convened meeting of oil producers and consumers in Jeddah on June 22 in an effort to stabilize the market.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
96
AFF—AT: Oil refinery DA No link—their disad assumes a mandated reduction in gasoline usage in addition to alternative energy Drevna, 08 - President National Petrochemical and Refiners Association (Charles, CAPITOL HILL HEARING TESTIMONY, 5/6, CQ Congressional Testimony, lexis) To illustrate the point further, the President's proposal which calls for use of 35 billion gallons per year of renewable fuels, primarily ethanol, also requires a 20% reduction in the use of gasoline by the same time. The Energy Information Administration projects that gasoline demand in 2017 will be 161 billion gallons. A 20% reduction of this figure would result in 129 billion gallons of gasoline. In 2006, U.S. production of gasoline was 136 billion gallons and net imports of finished gasoline equaled 7 billion gallons. Therefore, the target for gasoline use in 2017 is below today's U.S. production levels. This would transform the U.S. from a net importer to a net exporter of gasoline. Meanwhile, demand for other petroleum-based fuels such as diesel is still expected to increase. If U.S. refiners expand capacity to meet rising demand for petroleum products other than gasoline, they will naturally produce more excess gasoline for export at the same time. A fundamental policy question regarding the efficacy of exporting domestic supplies of transportation fuels under the guise of reducing domestic consumption of that same fuel under a continuing supply/demand imbalance must be addressed.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
97
AFF—AT: Oil refinery DA No impact—more refineries are unnecessary—no new oil is coming and refineries can handle any possible increase in oil production NPR, 6/17/08—National Public Radio, “Do we need more oil refineries?” Lexis Dr. KEN DEFFEYES (Author, "Beyond Oil: The View from Hubbert's Peak"): Well, if world oil production is not increasing, and in fact, seems to be in the process of decreasing, you need fewer refineries, not more refineries. And if there were a shortage of refining capacity right now, crude oil would be piling up unrefined, and the price of crude oil would go down. In case you haven't noticed, the price of crude oil is going up sharply, so building more refineries won't make crude oil appear at the entry side of the refinery. PESCA: You're saying our refineries, the U.S. refineries, can handle all the oil they're being given to refine. Dr. DEFFEYES: That's right. And the - my analysis says, world oil production is not going to go up. PESCA: The American Petroleum Institute says that while a new refinery has not been built for 30 years, capacity expansions in existing refineries have amounted to the equivalent of 10 new refineries over the past 10 years. I mean, maybe you could quibble a little bit with the numbers, but is that generally true? It's not the number of new refineries. The existing refineries just keep growing and growing to handle the capacity? Dr. DEFFEYES: They do keep growing, and so far, we haven't seen what I mentioned earlier, of oil piling up on the dock, waiting to go in to the refineries. PESCA: If this is an era of record profitability for oil companies, and if their profits are somewhat dependant on supply and demand, aren't they pretty happy with the amount of refining capacity that we have, otherwise they'd try to built some more refineries somewhere? Dr. DEFFEYES: Well, if there were refinery shortage, they'd be doing what they did in the past. Find an island somewhere, like Aruba, and build a giant refinery. PESCA: New York Senator Charles Schumer was criticizing the oil industry, and at a time when rusty refineries in his words, were constantly breaking down and here's one thing he said. I don't know any other industry where an equipment breakdown in one company, benefits every other company by raising prices. Is the senator's assessment of how it works accurate? Dr. DEFFEYES: I'm not sure about that one. Are the floods in the American Middle West right now raising the price of corn? Yes. Now, do we need another Iowa to keep the price of corn stable? (Soundbite of laughter) PESCA: I see what you mean. That's an excellent analogy. So building more refineries would that help a little, help a lot, won't do a damn thing, or would wind up hurting us? Dr. DEFFEYES: I think it won't do a thing. PESCA: All right, Professor Kenneth Deffeyes is the author of "Beyond Oil: The View from Hubbert's Peak." He will join us for more conversations about solutions to the energy and oil crisis. Thank you again, Professor. Dr. DEFFEYES: You're welcome.
Processing Canadian crude increases green house gas emissions by 40% Chicago Tribune 08 [Michael Hawthorne-Tribune Reporter, “Midwest Projects Would Increase Emission Up to 40%, February 12, http://www.chicagotribune.com/news/local/chi-greenhouse_12feb12,0,6312287.story] While greenhouse gases from the tailpipes of cars get the most attention, the refineries that keep cars and trucks running also contribute to global warming. Fuel must be burned to make gasoline from oil, generating carbon-dioxide pollution. The huge increases in greenhouse gases are a largely hidden consequence of an industry wide trend to buy more Canadian crude. Vast reserves of tar-soaked clay and sand lying under the swampy forests of northern Alberta are seen as a profitable and reliable source of oil, but the heavy petroleum requires more energy to process. Other oil companies declined to discuss projected increases in global-warming pollution, but researchers have calculated that refining the Canadian petroleum produces 15 percent to 40 percent more carbon dioxide emissions than conventional oil. With no greenhouse-gas regulations in place, the companies face no costs for the extra pollution they will churn into the atmosphere. "This is a glaring example of how our energy policy and climate policy are at cross purposes," said Judi Greenwald, director of innovative solutions at the Pew Center on Global Climate Change. "Companies are making decisions that really don't make sense on a national level when you fail to take climate change into account." The industry's move toward heavy petroleum comes as oil companies aggressively promote their investments in renewable energy and involvement in efforts to fight global warming.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
98
AFF—AT: Oil refinery DA It is too risky to invest in refineries now. Westfall, 07 (Lynn, chief economist for Tesoro, E&E News-- OIL AND GAS: Tesoro's Lynn Westfall gives refinery industry's take on gas prices, demand for alternatives, July 10, lexis) Lynn Westfall: It seems like that would be the obvious thing to do, but it hasn't made economic sense in the past and it still doesn't make economic sense. If you're asking someone to build a refinery you're asking them basically to spend about seven or eight years, which is how long it would take to build a refinery. So, during that time period you're spending billions of dollars and getting no income for seven to eight years. And after that, even at today's high refining margins, it would take another 10 to 12 years to pay off that investment. So asking someone to build a new refinery is basically asking them to take a 20 year bet that refining margins are going to stay high. And, at the same time, most developed countries in the world are doing their best to lower demand for our major product, which is gasoline. So that's a very unclear investment decision for most companies. Monica Trauzzi: Isn't that part of the risk of being part of the refining industry though? Isn't that a risk that you have to take? Lynn Westfall: That's a risk that in the past we were willing to take when you could build a new refinery in three or four years. And before there was even any talk about gasoline has issues with global warming, we want more ethanol, no renewables. So I think, in the past when it was a less risky proposition, it was a level we were willing to take. But now it's just not really - it's gone above our risk tolerance.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
99
AFF—AT: Oil shocks No impact to oil shocks—the economy has changed the third time around Dechaux, 7—Delphine, “Less damage in third oil shock” Herald Sun Australia, 5/5/07, Lexis THE world is enduring a third ''oil shock'' as crude prices trade at record levels close to $US100 a barrel after a sustained surge over the past three years, according to economists. But unlike the oil shocks of 1973 and 1980, this time the global economy remains solid, even amid the added threat of the US housing crisis. ''There is no doubt we are in the third oil price shock,'' said Leo Drollas, chief economist at the Centre for Global Energy Studies in London. ''Because since 2004 . . . prices have gone from $US30 to almost $US100.'' OPEC ministers meeting in Abu Dhabi today to decide on output quotas for the cartel argue that the oil price spike does not reflect the supply-demand situation. Rather they believe prices have surged because of geopolitical concerns, such as that over Iran's nuclear program. In the run-up to the 1980 oil shock prices had more than doubled. Francois Lescaroux, an economist at IFP, a French state-run energy research body, said majority opinion was that the first two oil shocks were due to supply factors. ''Everyone agrees this time that demand factors are pulling up prices,'' he said. The oil price shock of 1973 occurred after Arab members of OPEC halted shipments of crude to the United States, Western Europe and Japan for their perceived support of Israel in its battle against Syria and Egypt during the Yom Kippur War. Following the oil embargo, the price of crude jumped above $US10 a barrel for the first time. The second oil crisis, in 1979, followed the Iranian Revolution. By the start of 1981, oil prices had surged to $US39, which, adjusted for inflation, is the equivalent of $US101 a barrel today. Yahia Said, a professor at the London School of Economics, said political unrest was a common factor in all three oil shocks. ''In the first case, it was the Yom Kippur War of 1973, in the second case it was the Iraqi invasion of Iran (after the Iranian Revolution). In this case it is tensions around Iraq and Iran,'' he added. ''The shock this time has not had the same negative repercussions in terms of inflation or in terms of recession. ''It means that the economies as the result of the previous two shocks have managed to reduce the impact of high oil prices, especially in developed countries,'' he added.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
100
AFF—AT: Oil shales good Oil shale production is impossible – the omnibus spending bill banned commercial regulations Loris, ’07 (Nick, Research Assistant at the Heritage Foundation, “Omnibus Prohibits Oil Shale Development,” The Heritage Foundation, December 18, http://www.heritage.org/Research/EnergyandEnvironment/wm1754.cfm, Accessed 06-30-08) Adopted by the House of Representatives on December 17, the omnibus appropriations bill prohibits funding for oil shale commercial regulations. Without these regulations, commercial production of oil shale is impossible. The oil shale industry experienced several hiccups in the 1970s, and innovation has a long way to go before the resource becomes viable, but its potential is enormous. The United States is estimated to have more than 2 trillion barrels worth of oil shale resources. Spending bills should not include policy riders that stand in the way of U.S. energy independence. Dr. Daniel Fine of MIT reported that 750 billion barrels worth of oil shale have been discovered in Colorado alone.[1] That amount is enough to potentially power the U.S. economy for many decades. Furthermore, if full-scale production begins within five years, the U.S. could completely end its dependence on OPEC by 2020.[2] The oil shale provision reads as follows: None of the funds made available by this Act shall be used to prepare or publish final regulations regarding a commercial leasing program for oil shale resources on public lands pursuant to section 369(d) of the Energy Policy Act of 2005 (Public Law 109-58) or to conduct an oil shale lease sale pursuant to subsection 369(e) of such Act.[3] Without these regulations in place, these lands will not be able to be leased and/or developed for exploration of oil shale production. The technology to collect and refine oil shale is developing at a rapid pace, and private companies are willing to invest in it. Shell Oil commenced a research and development project on oil shale 30 years ago and continues to invest a considerable portion of its own revenue into commercializing the shale. An estimated 1.2 trillion to 1.8 trillion barrels of oil is available in the Green River Formation, an area which expands through most of Colorado and parts of Utah and Wyoming.[4] The recoverable oil refined from oil shale would provide another resource for fuel production. According to the U.S. Department of Interior and Bureau of Land Management, a moderate estimate of 800 billion barrels of recoverable oil from oil shale in the Green River Formation is three times greater than the proven oil reserves of Saudi Arabia.[5] The investment in technology and R&D is making the process cheaper and safer for the environment. In effect, methods of harvesting oil shale force excess carbon back into the ground. Dr. Fine estimates that oil shale production could by economical to produce when oil is selling at $25 per barrel.[6] The omnibus provisions would undoubtedly slow progress being made in the oil shale industry, effectively putting another viable, domestic source of energy "off limits." As such, the oil shale prohibition would severely reduce the potential for oil shale to decrease U.S. dependence on imported oil. If Congress passes the omnibus in its current form, the oil shale provision is one more reason for President Bush to exercise his veto authority.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
101
AFF—AT: Oil shales good Oil shale mining causes global warming, environmental destruction, and contributes to water scarcity. NRDC, 07 (Natural Resources Defense Council, a national organization of scientists, lawyers and environmental specialists dedicated to protecting public health and the environment. “Controversial Oil Substitutes Sharply Increase Emissions, Devour Landscapes” 6-11-07. http://www.nrdc.org/media/2007/070611.asp A 2005 study by the RAND Corporation estimates it would require a 1200-megawatt power plant just to unlock just 100,000 barrels of shale oil a day (less than 1 percent of our total oil demand). Large enough to serve half a million people, the power plant alone would burn 5 million tons of coal each year and release 10 million tons of global warming pollution. Moreover, each barrel of shale oil produced by the conventional mining method consumes between 2.1 and 5.2 barrels of water, a commodity already scarce in the region. Runoff from mine tailings – 150,000 tons a day; 55 million tons a year – would threaten water supplies used by cities, farms, and wildlife. “Oil shale development is all talk and no gain. It presents huge risks to both the economic and environmental lifeblood of this state. At a bare minimum we need to do serious testing and evaluation on a pilot basis before we even consider unleashing this technology on a large scale,” said Bob Randall, an expert with WRA. Oil shales and tar sands are an environmental disaster – they increase water scarcity, pollution cause more warming and destroying ecosystems Argonne National Laboratory, 06 (Report for the Bureau of Land Management in Washington, DC. “Summary of Public Scoping Comments for the Oil Shale and Tar Sands Resources Leasing Programmatic Environmental Impact Statement” March 2006. ostseis.anl.gov/documents/docs/OSTS_PEIS_Scoping_Summary_Report060310.pdf) Questions about the amount of water that OSTS development technologies would require and how the technologies would impact surface and groundwater were the most frequently stated concerns in the public comments. Concerns were raised regarding the requirements of the Colorado River Compact. Specifically, commentors observed that the processes would consume large amounts of water in a region where water resources are very limited. Many commentors questioned specifically where the water would be obtained from and who would lose water in order to provide needed water to OSTS development. It was stated that other industrial development would be limited because there would be no remaining water resources. Concerns were also raised that river flows would be significantly reduced. A commentor recommended that all private industry conducting shale extraction be required to institute water recycling programs. Water quality issues included concerns that highly saline runoff would be toxic to the flora and fauna of streams and rivers, or that discharged waste water with increased temperature would harm riparian ecosystems. Compliance with the terms of the Colorado River Salinit Compact was identified as an issue of concern. In addition, commentors expressed concern that leachate from the process wastes would cause contamination of groundwater and surface waters, and some commentors expressed concern about impacts on groundwater quality as a result of the proposed in situ retorting process being developed for oil shale. Air Quality, Noise, and Visual Impacts. The identified air quality concerns involved emissions from the process equipment and emissions from other associated sources (e.g., transportation vehicles and new power plants required to provide energy for the OSTS development projects). The commentors requested that the potential emissions of criteria pollutants and hazardous pollutants from mining, retorting, processing plants, and power plants be quantified. It was requested that regional three dimensional transport modeling be conducted to estimate the air quality impacts. Many commentors also expressed concerns about emissions of greenhouse gases and associated impacts on global warming. Another prevalent concern was that haze and dust from OSTS development would decrease air quality in Class I areas. Many commentors stated opposition to adverse impacts to the visual landscape from processes such as surface mining, and stated that the great beauty of the areas potentially impacted should be preserved for future generations. Soil and Vegetation Impacts. Commentors expressed concern that the large amounts of new infrastructure needed to support the project would require large amounts of land. Commentors observed that surface mining (if used) would have severe adverse impacts on landscapes, which would be compounded by the sensitive nature of the areas. Concerns were also noted that in situ technology (if used) would require that vegetation be stripped from much of the land, thus requiring long recovery periods. Other identified issues were erosion and/or compaction of soil due to clearing of vegetation and new development, urban sprawl, impacts of the project on agriculture and grazing, and the spread of noxious weeds. Waste Generation and Disposal. Commentors requested that options for disposal of the huge volumes of overburden and waste rock (e.g., spent shale) generated by OSTS development be addressed in the PEIS. Concerns were voiced that hazardous leachate could be produced from these wastes, thereby causing groundwater and surface water contamination (see Water Quantity and Quality discussion above). Ecology and Wildlife. A few commentors noted the unique nature of some of the large mammal populations in the study area, including pronghorn antelope, mountain lion, elk, mule deer, moose, bighorn sheep, black and grizzly bears, and gray wolves, and expressed concern that the leasing of public lands for OSTS development would reduce their available habitat.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
102
AFF—AT: Oil shales good Oil shale development is logistically impossible and an environmental disaster. Udall, 5 (Randy Udall, director, Community Office for Resource Efficiency. “The Illusive Bonanza: Oil Shale in Colorado” http://www.aspencore.org/images/pdf/OilShale.pdf) As a rule, nations don’t tap oil shale unless they are destitute. The world’s primary producer has been Estonia, a Baltic nation lacking in coal, natural gas, oil, or hydropower. When Russian natural gas and nuclear power became available, Estonia began to phase out its shale oil industry. Elsewhere, small amounts of shale have been mined in China, Brazil, and Russia. Most recently, a well-funded and much-ballyhooed Australian oil shale experiment failed. Tellingly, one partner in that bankrupt project was Suncor, a successful developer of Canadian tar sands. After losing $100 million, Suncor now appreciates the critical distinctions between tar sands and oil shales. There are two ways to produce shale oil. Typically, the rock is mined like coal. After being loaded and trucked to a processing plant, the shale is crushed and fed into an enormous kiln (or “retort”), where it is roasted to 1,000 degrees F. The heat “cracks” the kerogen, whose distilled vapors can be refined into a liquid fuel. Retorting oil shale is capital intensive, messy, inefficient, and polluting. It consumes lots of energy and water. The slag, swollen in volume and contaminated with arsenic, must be safely disposed. The entire process is so costly and laborious that global production has never exceeded 25,000 barrels a day, compared to today’s 84,000,000 barrels of total oil production. Retorting a million barrels each day, as some propose, would entail mining and disposing of 700 million tons per year, digging the world’s deepest open pit mines, constructing a hundred retorts, and platting new cities to house tens of thousands of workers. In sum, it would be the largest mining operation in the world. Oil shales cannot solve energy independence – renewable energy is a better option. Udall, 5 (Randy Udall, director, Community Office for Resource Efficiency. “The Illusive Bonanza: Oil Shale in Colorado” http://www.aspencore.org/images/pdf/OilShale.pdf) What contribution can oil shale make to energy security? Producing 100,000 barrels per day of shale oil does not violate the laws of physics, if the price of conventional crude rises high enough it might be economic. But the nation is currently consuming 100,000 barrels of oil every seven minutes. Increasing the efficiency of America’s automobiles by two miles per gallon would save ten times as much fuel each year, saving consumers $40 billion at the pump. The National Academy of Sciences has stated that bolder efficiency targets—cars, trucks, and SUVs getting 30, 40 or 50 miles per gallon—are doable and affordable. An aggressive national commitment to fuel efficiency is not optional, it’s inevitable. In time, a more efficient fleet could save 20 times as much petroleum as oil shale will ever provide. Dreams and hype aside, oil shale is the poorest of the fossil fuels, containing far less energy than crude oil, much less even than hog manure, peat moss, corn pellets, household garbage, or Cap’n Crunch. A meager amount of energy, tightly bound up in an enormous volume of rock, oil shale seems destined to remain an illusive bonanza, the petroleum equivalent of fool’s gold.
Oil Shale development poisons the water supply. Natural Resources Defense Council 07 [Western Colorado Congress, Western Resource Advocates, Colorado Environmental Coalition, “Oil Shale Development Will Threaten Water Supplies, June 7] Oil shale development also poses a potentially serious threat to water quality. The process of transforming the kerogen in shale into oil leaves behind salts and numerous toxic, water-soluble chemicals that could leach into the groundwater that is the source of much of the region’s surface water during the critical time when flow is lowest. Flushing these chemicals from the oil shale production zone, as several companies propose, would also create large volumes of highly saline water that will require further treatment. But like oil shale production itself, the technical feasibility of isolating and treating contaminated groundwater has not been demonstrated. The toxic chemicals left behind in the spent shale could potentially pollute important water sources including the Colorado River and some of its tributaries.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
103
AFF—AT: Oil shales good Oil shale development requires massive amounts of water—increases scarcity Natural Resources Defense Council 07 [Western Colorado Congress, Western Resource Advocates, Colorado Environmental Coalition, “Oil Shale Development Will Threaten Water Supplies, June 7] Producing oil from shale uses water on site both during and after production (to cleanse the production zone after the oil has been extracted). For example, Shell recently disclosed in a permit application for its small research and demonstration site that it will have to rinse its underground production area over 20 times, requiring up to 4 acre-feet each day for over two years and resulting in massive water disposal challenges. A 2005 analysis by the RAND Corporation concluded that the Colorado River’s main stem and several tributaries would be “highly impacted” regardless of which technologies for oil shale development are employed. A 2006 analysis by a Los Alamos researcher concluded that the White River could support a 500,000-barrel per day commercial operation if a 16,000 acre-ft reservoir is built in the watershed and extractions are limited to 70,000 acre-feet per year. However, the Bureau of Land Management envisions a one- to three-million barrel-per-day production level. The Los Alamos report calls for a regional assessment of the cumulative impact of the oil shale industry to water resources in the Colorado River Basin. The water needed onsite for oil production is only part of the puzzle. Water is also required to produce the enormous amounts of electricity necessary to convert the kerogen in the rock into utilizable fuels. The new power production needs of a one million barrel-per-day operation would be about 150,000 acre-feet of water per year, according to the Los Alamos analysis. Taking into account the water required for onsite production and offsite power generation, the commercial-scale oil shale production rate proposed could consume over 300,000 acre-feet of water per year. For comparison, this amount of water could supply the household needs for two cities the size of Denver. Next week, the State of Colorado is expected to submit its comments on the preliminary draft Oil Shale and Tar Sands Leasing Programmatic Environmental Impact Statement (PEIS), a document that could determine the future of vast swaths of Colorado’s West Slope. The State of Colorado, along with 13 other state and local governments, is a cooperating agency on the Programmatic EIS and was supposed to be a full partner in its preparation. On May 14, however, the BLM denied a request by Colorado Governor Ritter and Wyoming Governor Freudenthal for more time to review the seven-volume, 2000page draft.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
104
AFF—AT: Tar Sands Tar sand extraction produces 2.5 times as much greenhouse gases as conventional oil RAN 08 [Rainforest Action Network-Investigative Organization, ran.org/fileadmin/materials/comms/mediacontent/brochures/Tarsands_comp.pdf] Extracting heavy oil from tar sands and transporting it by pipeline for reining is a difficult and costly process. Oil companies have failed to reduce emissions of the large amounts of energy to separate the oil from the sand which is intensifying greenhouse gas emission. Yet, oil companies have not addressed emissions of heat-trapping carbon dioxide in refinery air permits pending before federal and states environmental agencies. From extraction to reining the climate change impacts are vast. Global-warming pollution from oil refineries is expected to soar by as much as 40 percent during the next decade, a dramatic increase that runs counter to regional and national efforts to curb heat-trapping gases and reduce America’s oil consumption. Tar sands oil is the worst type of oil for the atmosphere. A barrel of tar sands oil produces 2.5 times as much greenhouse gases as a barrel of conventionally produced oil because so much energy is required to separate the tar from the sand and upgrade the tar to oil.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
105
AFF—AT: Tar Sands Tar sands are exceedingly expensive, environmentally destructive, and unsustainable. Leggett, ’05 (Jeremy, former member of the UK Government Renewables advisory board, The Empty Tank, Random House, New York. p. 41-43) Canada's National Energy Board puts production from the tar sands at 1 million barrels a day in 2004. The Canadian Association of Petroleum Producers forecasts an increase in supply to 2.6 million barrels a day by 2015.46 Not a lot of progress in ten years then. Even if all current expansion [end page 41] plans for Alberta's tar sands come to fruition they will produce only 3 million barrels a day by 2012. These are almost unnoticeable percentages of projected global demand." And even this has not been achieved without problems. The Petroleum Review reports "gargantuan cost over-runs" in the three projects operating at present in the tar sands area, and "a crescendo of scale backs and postponements" as a consequence." This is because heavy oil is both difficult and expensive to extract. To yield a barrel of oil by mining tar sand that is exposed at the surface, two tons of sand have to be dug up, from which the oil must be separated in giant washing machines, and then huge volumes of tailings have to be dumped into giant sludge ponds. But much of the tar sand is underground. To get that out requires steam injection of high temperature (up to 200°C) and the use of solvents, as we saw in Chapter 2. The environmental problems are only beginning at that point. Colossal amounts of water have to be heated, vast amounts of natural gas have to be used to do that, and it all involves major greenhouse gas emissions. The amount of water needed by the current small, unconventional oil-extraction industry in Canada is creating problems as things stand. Consider the following. Alberta's environment minister, Lorne Taylor, told a seminar on water management in June 2004 that the oil industry would eventually have to stop pumping water down wells for conventional enhanced oil recovery. Communities, farmers, ranchers, and other landowners are becoming increasingly concerned about loss of freshwater, she said, and the province risked not having enough water in the future to sustain the population and protect the health of lakes and rivers. I emphasize, these concerns were about conventional oil production, not the much more water-intensive unconventional production techniques." Ironically, concerns are emerging that Canadian gas is depleting so fast that there won't be enough power available to heat water for the tar sands operations anyway. The Petroleum Review reported in November 2004 that the operations were using 0.6 billion cubic feet of gas a day. If production reaches 2.2 million barrels a day, the draw on gas could be as much as 2.5 billion cubic feet per day. The Review notes coyly that this would "place significant demands on dwindling supplies." Canadian marketable natural gas production in 2003 totaled 16.8 billion cubic feet per day, a decrease from 17.3 in 2002. Despite record gas well drilling in 2003, production decreased by approximately 3 percent." [end page 42] One critic told the Oil & Gas Journal that the amount of gas needed to extract the oil reserves that the magazine had so generously credited to Canada amounted to two or three times Canada's gas reserves. The only way the 300-plus billion barrels could be extracted, he figured, was to build nuclear power plants dedicated to the job. That might take rather too long for unconventional oil to fill the gap created by the conventionally depleting oil of the Middle East " The energy levels required to heat the water are such that carbon dioxide emissions are more than three times greater than those of conventional oil production. 53 Canada has ratified the Kyoto Protocol, the United Nations treaty aiming to begin the process of cutting greenhouse gas emissions. We will discuss this treaty and its seriousness further in Chapter 5.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
106
AFF—AT: Tar Sands Tar sands cause global warming and environmental devastation – plus, they’re too energy intensive to be a viable oil alternative. NRDC, 07 (Natural Resources Defense Council, a national organization of scientists, lawyers and environmental specialists dedicated to protecting public health and the environment. “Controversial Oil Substitutes Sharply Increase Emissions, Devour Landscapes” 6-11-07. http://www.nrdc.org/media/2007/070611.asp To get at tar sands, companies use huge amounts of natural gas – enough to heat 4 million homes last year alone – to generate steam that is pumped deep under ground. In other cases, vast open pit mines are used to dig the material out. Either way, the industrial mix of roads, pipelines, pits and heavy equipment cause irreparable damage across the rare and irreplaceable habitats of Canada’s vast Boreal Forest, home to more than 40 percent of North America’s waterfowl. Toxic tailings threaten regional water supplies. From start to finish the process generates three times the global warming emissions of conventional gasoline. Emissions from tar sands production totaled 125 million tons in 2003. “The irony is that extracting energy from the Alberta tar sands actually requires an input of massive amounts of energy. It’s counterproductive, could contribute triple the global warming pollution as conventional oil, and devastates the environment. It just doesn’t make sense,” said NRDC senior attorney Susan Casey-Lefkowitz. Tar Sands cause deforestation and massive pollution. Casey-Lefkowitz, June 16, 2008, (Susan, Senior Attorney with the Natural Resources Defense Council, “Natural Resources Defense Council to Oil Companies: Stop Tar Sands Fuel” http://vcr.csrwire.com/node/8630) Recently, 500 ducks mistook a lake of toxic tar sands waste in Alberta for one of the many pristine waters in Canada’s Boreal forests. Once coated with the oily residue, the ducks couldn’t fly away and they all died. Many had flown from the United States on their way to have their young in the Boreal. The deceptive waters of the enormous waste lagoons were likely too attractive for them on their long trek north. Tar sands oil is just as deceptive as a solution to our energy needs. The death of 500 ducks was one more warning about harm caused by mining and drilling Canada’s Boreal forests for the tar sands oil that lies deep under the surface. Beneath the carpet of blue waters and green forests of the Province of Alberta, the tar sands are sand mixed with a sticky substance called bitumen. This bitumen – after using lots of energy and water – can be turned into synthetic crude oil, and from there into fuel for our cars, trucks and airplanes. In addition to the problems of torn up forests and toxic lagoons, the process for making the synthetic crude produces three times the greenhouse gases per barrel as conventional oil production. While companies like BP are posting record high profits, they are making others pay for the damage they are causing at the local and global levels. At a time when our government and the oil companies should be making major investments to kick our oil addiction, the big oil companies like BP, Exxon, Shell, Chevron and ConocoPhillips are wallowing in the tar sands. Instead of investing in clean energy in this time of declining world oil reserves, these companies are putting their resources into destroying critical wetlands, forests, local communities, and our global climate for the dirtiest oil.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
107
AFF—AT: Canada relations impact Relations with Canada are deep and resilient. Ek and Fergusson 07 – (Carl and Ian F., Foreign Affairs, Defense, and Trade Division congressional researchers, May 15, “Canada-US Relations,” Order code 96-397, http://209.85.215.104/search?q=cache:jkhCWkWD0wJ:www.fas.org/sgp/crs/row/96397.pdf+US+oil+Canada+relations+improve+benefit+importing+tar+sands+good&hl=en&ct=clnk&cd=9&gl=us&client=saf ari) Regardless of the occasional rancor of U.S.-Canadian trade disputes, there is little danger that such conflicts would ever escalate into a full-blown trade war. The Canadians in particular have a strong incentive to resolve feuds and maintain close trade ties with the United States. The Canadian economy is heavily export-oriented, and its largest trading partner by far is the United States, takes more than 80% of Canada’s exports and is the source of nearly two-thirds of its imports. And although sharp disputes still plague the enormous bilateral trade relationship, it is important to bear in mind that such disputes normally affect only 2% of trade.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
108
AFF—AT: China fill-in No impact to their China arguments—Canada sending supplies to China just guarantees other international supplies come to the US Edmonton Journal, 6 “Oil futures a safe investment for young workers: This is not a sunset industry, energy minister says” Gordon Jaremko, The Edmonton Journal. SECTION: ALBERTA OIL & GAS REPORT; Pg. E1, Lexis EXCESS TO ASIA U.S. forecasts do not stake claims on all the new production expected from the oilsands. "If volumes reach the levels Canadian analysts talk about, there could easily be a desire to send some to Asia," Butler said. Washington forecasts acknowledge plans by Terasen Inc. and Enbridge Inc. for new oilsands pipelines to fill ocean tankers at expanded terminals on the British Columbia coast. Both firms continue to seek shipper signatures on contracts to use the proposed new lines from Edmonton to Kitimat as the key item needed to build the projects. Overall, American supplies will improve even if Canadian oil exporters widen their horizons, Butler predicted. Alberta deliveries across the Pacific Ocean to China and India would free up other international supplies to flow to the U.S. Atlantic seaboard, he said. But Washington expects Canadian oil marketers to stay focused on the U.S. as the lowest-cost export destination.
Jheidt, Anshu, Melissa, Alexa, Krystal
1
Oil Refineries DA Oil Refineries DA..........................................................................................................................................................................1 1nc Oil Refineries DA...................................................................................................................................................................3 1nc Oil Shock Impact....................................................................................................................................................................5 Uniqueness—Refineries expanding now......................................................................................................................................6 Uniqueness—Refineries expanding now......................................................................................................................................7 Uniqueness—Refineries expanding now......................................................................................................................................8 Uniqueness—Refineries expanding..............................................................................................................................................9 Uniqueness—Canadian imports now..........................................................................................................................................10 Uniqueness—Tar sand inevitable................................................................................................................................................11 Uniqueness—Tar sand inevitable................................................................................................................................................12 Uniqueness—investments now...................................................................................................................................................13 Refineries on the brink................................................................................................................................................................14 Refineries on the brink................................................................................................................................................................15 Refineries on the brink................................................................................................................................................................16 Renewables Inevitable/Free market better..................................................................................................................................17 Renewables Inevitable.................................................................................................................................................................18 Renewables fail...........................................................................................................................................................................19 Link—High demand KT refinery investment.............................................................................................................................20 Link—High demand KT refinery investment.............................................................................................................................21 Link—High demand KT refinery expansion...............................................................................................................................22 Link—Renewables......................................................................................................................................................................23 Link—LCFS................................................................................................................................................................................24 Link—LCFS................................................................................................................................................................................25 Link—LCFS................................................................................................................................................................................26 Link—LCFS................................................................................................................................................................................27 Link—LCFS................................................................................................................................................................................28 Link—LCFS................................................................................................................................................................................29 Link—ethanol..............................................................................................................................................................................30 Link—ethanol..............................................................................................................................................................................31 Link—ethanol..............................................................................................................................................................................32 Link—oil vouchers......................................................................................................................................................................33 Link—carbon tax.........................................................................................................................................................................34 Link—carbon caps/cap and trade................................................................................................................................................35 Link—perception.........................................................................................................................................................................36 Xtn—oil shocks=depression........................................................................................................................................................37 Xtn—oil shocks=nuke war..........................................................................................................................................................39 2nc—oil shocks bad—Iran..........................................................................................................................................................40 2nc Trade Deficit Impact.............................................................................................................................................................41 2nc Trade Deficit Impact.............................................................................................................................................................43 Xtn—Trade deficit bad—dollar/economy...................................................................................................................................44 Xtn—Trade deficit bad—soft power...........................................................................................................................................45 2nc NAFTA Impact.....................................................................................................................................................................46 2nc NAFTA Impact.....................................................................................................................................................................47 Xtn—Dependence KT NAFTA...................................................................................................................................................48 2nc NAFTA Impact—Mexican Economy...................................................................................................................................49 2nc NAFTA Impact—Free Trade...............................................................................................................................................50 Xtn—NAFTA KT free trade.......................................................................................................................................................51 2nc NAFTA Impact—Democracy..............................................................................................................................................52 Xtn—Dependence KT US-Canada Trade Relations...................................................................................................................54 AT: NAFTA Bad—Job Loss/Econ.............................................................................................................................................55 2nc Canada Relations Impact......................................................................................................................................................56 2nc Canada Relations Impact......................................................................................................................................................57 AT: Canada backlashes to NORAD............................................................................................................................................58 Xtn—Dependence KT US-Canada Trade Relations...................................................................................................................59 Xtn—Dependence KT US-Canada Trade Relations...................................................................................................................60
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
2
2nc Canadian economy impact....................................................................................................................................................61 2nc Canadian economy impact....................................................................................................................................................62 2nc—Canadian Economy Impact—US Economy......................................................................................................................63 Xtn—oil sands key to Canadian economy..................................................................................................................................65 Xtn—oil sands key to Canadian economy..................................................................................................................................66 AT: Refineries bad—generic.......................................................................................................................................................67 AT: Refineries bad—pollution....................................................................................................................................................68 Xtn—Chinese refineries bad—environment/pollution................................................................................................................69 Refineries Good—Oil Shocks.....................................................................................................................................................70 Refineries Good—High Oil Prices..............................................................................................................................................71 Refineries Good—High Oil Prices .....................................................................................................................................................................................................72 High Oil Prices Bad—Economy ................................................................................................................................................73 Xtn—high oil prices bad—economy...........................................................................................................................................74 AT: Refineries cause high prices.................................................................................................................................................75 Refineries good—gas prices........................................................................................................................................................76 Refineries good—oil supply........................................................................................................................................................77 Refineries good—US Canada Relations.....................................................................................................................................78 Oil Investment Good—Prices......................................................................................................................................................79 Oil Investment Good—Economy................................................................................................................................................80 Canadian Oil Sands Good—US Oil Supply................................................................................................................................81 Canadian Oil Shales Good—Dependence...................................................................................................................................82 Canadian Oil Shales Good—Dependence...................................................................................................................................83 Canadian Oil Shales Good—Dependence...................................................................................................................................84 Canadian Oil Shales Good—Economy.......................................................................................................................................85 AT: Oil shales not viable.............................................................................................................................................................86 Canadian Tar Sands Good—Gas Prices......................................................................................................................................87 Canadian Tar Sands Good—AT: Environment...........................................................................................................................88 DA Turns case—energy prices....................................................................................................................................................89 AT: Alt energy solves need for fossil fuels.................................................................................................................................90 AT: Alt energy solves need for fossil fuels.................................................................................................................................91 AT: Alt energy solves demand for oil/gas...................................................................................................................................92 Uniqueness: no refinery expansion now......................................................................................................................................93 Uniqueness—no investments now..............................................................................................................................................94 AFF—AT: Oil refinery DA.........................................................................................................................................................95 AFF—AT: Oil refinery DA.........................................................................................................................................................96 AFF—AT: Oil refinery DA.........................................................................................................................................................97 AFF—AT: Oil refinery DA.........................................................................................................................................................98 AFF—AT: Oil shocks.................................................................................................................................................................99 AFF—AT: Oil shales good.......................................................................................................................................................100 AFF—AT: Oil shales good.......................................................................................................................................................101 AFF—AT: Oil shales good.......................................................................................................................................................102 AFF—AT: Oil shales good.......................................................................................................................................................103 AFF—AT: Tar Sands................................................................................................................................................................104 AFF—AT: Tar Sands................................................................................................................................................................105 AFF—AT: Tar Sands................................................................................................................................................................106 AFF—AT: Canada relations impact..........................................................................................................................................107 AFF—AT: China fill-in.............................................................................................................................................................108
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
3
1nc Oil Refineries DA Refineries will be expanded now. The White House 08 – (June, “Policy Memorandum: American Made Energy,” The Oil Drum, http://www.whitehouse.gov/news/releases/2008/06/20080618-9.html) There are 149 refineries in the U.S. today, refining approximately 15 million barrels of oil per day. While no new refineries have been built in the last 30-plus years, existing refineries have undergone extensive modifications to adapt to changes in demand, changes in crude oil inputs, changes in fuel outputs (e.g. gasoline vs. diesel), and costs. Over the last 10 years, total capacity increased 1.85 million barrels per day, the equivalent of adding 1 medium-sized refinery per year. These expansions all took place at existing facilities. A refinery expansion or modification requires multiple permits, and can be undertaken for several reasons, including: To increase production, for example by increasing crude oil capacity or improving the yield of certain products by adding a downstream unit process To produce different types of fuel (i.e. to change the product mix to more diesel relative to gasoline) To reduce costs, by improving reliability or switching to lower quality crude oils to comply with regulations requiring cleaner fuels and changing fuel specifications. Going forward, it is predicted that refineries will continue to need to undergo modification and expansion to meet evolving demand and evolving types of inputs. The Energy Information Administration predicts that overall future demand is expected to grow less than 0.5% per year and total capacity expansion is anticipated to flatten out starting in 2010. However, a shift in demand is predicted. Demand for petroleum-based gasoline is expected to decline by about 7% over the next 15 years while demand for diesel is expected to increase about 12% over the same time. There will also be a continued need for refinery modification to accommodate a changing mix in available crude oil. For example, refineries are and will be making investments to process the increasing quantities of heavy Canadian crude oil from tar sands. Successful completion of a refinery modification requires successful completion of the permitting processes, for example those required by the Clean Air Act and the Clean Water Act. **Insert specific link** Our link is immediate: the plan immediately destroys investor confidence in refineries Drevna, 08 - President National Petrochemical and Refiners Association (Charles, CAPITOL HILL HEARING TESTIMONY, 5/6, CQ Congressional Testimony, lexis) Refinery Capacity Expansion Projects. It should be clearly understood that requirements to substantially increase the volume of ethanol and other renewables will essentially supplant a significant portion of the need/desire for additional domestic refining capacity. Refiners must make investments today on what they believe to be the longer- term (10-15 years or more) outlook. The domestic refining industry is likely to look upon rapidly rising ethanol and other bio-fuels requirements in the coming years as adding significant more risk to investments in capacity expansions. As recently as 2006, the Department of Energy (DOE) forecast that domestic refiners were likely to add 1.5 million barrels per day of capacity between 2006-2010. Based upon perceptions of renewable market developments - developments being stoked by administration and congressional actions - current estimates suggest that expansion in the domestic refining is likely to be constrained well below 1 million barrels per day. These decisions are being re-visited in boardrooms across the refining sector as the anticipated surge in ethanol requirements/mandates in the coming years will pressure domestic, and undoubtedly some foreign refiners currently supply the U.S. market to postpone or cancel new investments in petroleum refining capability. Refineries are vital to preventing oil shocks Leng, 6 – Sunita Sue, Staff writer, The Edge Singapore, “As I Call It: Taxing oil profits is no windfall solution” 5/8, Lexis After the oil shock of the late 1970s, then US president Jimmy Carter pushed through the Crude Oil Windfall Profits Tax Act in 1980. The tax was imposed on the difference between the market price of oil and a government-determined base price. According to a study by the Congressional Research Service, the windfall profits tax was expected to raise more than US$320 billion between 1980 and 1989. However, the government only managed to collect US$80 billion. Worse, the final amount was actually only about half of this because the tax was deductible against corporate income. The study also found that the tax had the effect of decreasing domestic production by 3% to 6%, increasing US dependence on foreign oil sources.
Refining bottleneck If left to the market, soaring energy prices will force everyone to moderate their gas-guzzling ways at some point, whether it's buying a smaller car or using less air-conditioning. But that will take time and that's the demand side of the equation. What really needs to come under scrutiny is the supply side -- specifically, the refineries. Oil prices are high because there is too little refining capacity. The US hasn't built a new refinery in years. In fact, since deregulation in 1982, oil consumption has risen by a third while oil companies have reduced refining capacity by a tenth, says the Foundation for Taxpayer and Consumer Rights. Refining is the bottleneck. It needs to be addressed. And while we're there, get rid of those tax breaks and subsidies that the big oil boys enjoy. The extra money could go some way towards making those hybrid cars cheaper.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
4
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
5
1nc Oil Shock Impact The economy is on the brink now—an oil shock would throw it over the edge Hall, 8 – Kevin G (all you sucka MCs), “70s woes echo today” the New York Times, 6/16, Lexis Not since the 1970s has the U.S. economy faced such an ugly combination of a persistent energy shock, a looming recession threat and menacing inflation that stays stubbornly high - even in the face of a screeching slowdown in growth. This combination has the Federal Reserve, charged by law with both sustaining growth and curbing inflation, in a bind. It must balance the needs of protecting the economy from a downturn while protecting it against an upward spiral of prices - and doing either one can make the other far more difficult. In addition, this dilemma comes amid the worst housing slump in modern times, as well as an unprecedented crisis in credit markets whose positive outcome is far from certain. Adding to the troubles are the dive of the U.S. dollar against other currencies and rising global inflation that partly mutes whatever action the Fed takes. "This thing has the potential to really unwind to create huge negative effects," said Lyle Gramley, a former Fed governor from 1980 to 1985, one of the U.S. economy's most turbulent periods. "The Fed is walking a tightrope right now, that's for sure." Please see 1970s A4 Laurence Meyer, a Fed governor from 1996 to 2002, sees some parallels between today and the late 1970s and early 1980s, when the oil-dependent U.S. economy saw double-digit inflation largely because of an unexpected energy shock. Growth fell while infla tion rose, creating stagflation - a stagnant economy and high inflation. Today's problems, he said, reflect "the first really persistent (oil) shock we've had since the 1970s, and the inflation expectations are worse than we have had over the past decade. So we're kind of in a middle area." US economic slowdown causes a global depression, crushes hegemony and causes a US-China war. Walter Russell Mead, Henry A. Kissinger Senior Fellow for U.S. Foreign Policy at the Council for Foreign Relations, 2004. Foreign Policy, Mar/Apr. EbscoHost. Similarly, in the last 60 years, as foreigners have acquired a greater value in the United States-government and private bonds, direct and portfolio private investments-more and more of them have acquired an interest in maintaining the strength of the U.S.-led system. A collapse of the U.S. economy and the ruin of the dollar would do more than dent the prosperity of the United States. Without their best customer, countries including China and Japan would fall into depressions. The financial strength of every country would be severely shaken should the United States collapse. Under those circumstances, debt becomes a strength, not a weakness, and other countries fear to break with the United States because they need its market and own its securities. Of course, pressed too far, a large national debt can turn from a source of strength to a crippling liability, and the United States must continue to justify other countries' faith by maintaining its long-term record of meeting its financial obligations. But, like Samson in the temple of the Philistines, a collapsing U.S. economy would inflict enormous, unacceptable damage on the rest of the world. That is sticky power with a vengeance.THE SUM OF ALL POWERS? The United States' global economic might is therefore not simply, to use Nye's formulations, hard power that compels others or soft power that attracts the rest of the world. Certainly, the U.S. economic system provides the United States with the prosperity needed to underwrite its security strategy, but it also encourages other countries to accept U.S. leadership. U.S. economic might is sticky power. How will sticky power help the United States address today's challenges? One pressing need is to ensure that Iraq's economic reconstruction integrates the nation more firmly in the global economy. Countries with open economies develop powerful trade-oriented businesses; the leaders of these businesses can promote economic policies that respect property rights, democracy, and the rule of law. Such leaders also lobby governments to avoid the isolation that characterized Iraq and Libya under economic sanctions. And looking beyond Iraq, the allure of access to Western capital and global markets is one of the few forces protecting the rule of law from even further erosion in Russia. China's rise to global prominence will offer a key test case for sticky power. As China develops economically, it should gain wealth that could support a military rivaling that of the United States; China is also gaining political influence in the world. Some analysts in both China and the United States believe that the laws of history mean that Chinese power will someday clash with the reigning U.S. power. Sticky power offers a way out. China benefits from participating in the U.S. economic system and integrating itself into the global economy. Between 1970 and 2003, China's gross domestic product grew from an estimated $106 billion to more than $1.3 trillion. By 2003, an estimated $450 billion of foreign money had flowed into the Chinese economy. Moreover, China is becoming increasingly dependent on both imports and exports to keep its economy (and its military machine) going. Hostilities between the United States and China would cripple China's industry, and cut off supplies of oil and other key commodities. Sticky power works both ways, though. If China cannot afford war
In an era of weapons of mass destruction, this mutual dependence is probably good for both sides. Sticky power did not prevent World War I, but economic interdependence runs deeper now; as a result, the "inevitable" U.S.-Chinese conflict is less likely to occur. Sticky power, then, is important to U.S. hegemony for two reasons: It helps prevent war, and, if war comes, it helps the United States win. But to exercise power in the real world, the pieces must go back together. Sharp, sticky, and soft power work together to sustain U.S. hegemony. Today, even as the United States' sharp and sticky power reach with the United States, the United States will have an increasingly hard time breaking off commercial relations with China.
unprecedented levels, the rise of anti-Americanism reflects a crisis in U.S. soft power that challenges fundamental assumptions and relationships in the U.S. system. Resolving the tension so that the different forms of power reinforce one another is one of the principal challenges facing U.S. foreign policy in 2004 and beyond.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
6
Uniqueness—Refineries expanding now U.S. refineries are on the brink of expansion. McCarthy, 8 (Shawn, Global Energy Reporter, “Oil Sands Demand Spurs U.S. Refinery Boom”, June 5, lexis) American refiners are making massive investments to dramatically increase imports from Alberta's oil sands, even as they face mounting pressure in the United States over the oil sands' impact on greenhouse gas emissions and other pollution. U.S. refineries are planning to expand their capacity by 1.6 million barrels a day, and some two-thirds of that is designated to handle production from the oil sands, according to data from the U.S. Environmental Protection Agency. As well, refiners are planning to convert 800,000 barrels a day of current capacity from conventional crude to handle the Alberta imports, the EPA figures show. Refineries are expanding to process Canadian tar sands. Wall Street Journal 8 [ Ana Campoy, “Refiners Face Obstacles To Procession Cheaper, Dirtier Crude Oil” June 12, http://online.wsj.com/article/SB121322847813566247.html?mod=googlenews_wsj] Refiners faced with rising prices for premium grades of crude oil are rushing to expand their ability to process less expensive, dirtier crudes, but their efforts face concerns about pollution and global warming. Several expansion projects in the U.S. are being slowed by worries that the processing of heavier crudes produces more air pollutants and greenhouse gases that contribute to climate change. While environmentalists have long been critical of heavier crude, government officials responsible for signing off on expansion projects are echoing that unease and demanding countermeasures to reduce the amount of pollution. Last week, an Environmental Protection Agency board refused to approve a permit for a refinery expansion proposed by ConocoPhillips and EnCana Corp. in Roxana, Ill., after environmentalists raised objections. In Richmond, Calif., Friday, the city's planning commission told Chevron Corp. it will restrict the crude the company can process once it upgrades its refinery there. And BP PLC is facing challenges from environmental groups to a proposed project in Whiting, Ind. Refiners have had difficulty building plants because of community opposition and lengthy and complicated permitting processes. There have been no new refineries built in the U.S. since 1976. Refiners have circumvented these barriers by expanding existing facilities. Since 1985, U.S. refining capacity has grown 20%, even as the number of refineries has fallen, according to API, the oil industry's trade group. Refiners plan to increase the amount of crude they process by 800,000 barrels a day by 2010, a 4.5% increase from current capacity, or the equivalent of four new refineries, API says. As rising oil prices outpace refiners' ability to pass along increases to consumers in a weak economy, they are looking for ways to cut costs. Because heavier crude is more difficult to process, it is less expensive than premium grades, such as West Texas Intermediate, or WTI. Prices for WTI have jumped more than 30% since the beginning of the year to more than $130 a barrel, while Mexican Maya, a heavy grade, has gone up 27% to about $105. Meanwhile, oil producers are bringing more heavy crude into the market, a trend industry officials expect to continue. In particular, refiners are working to expand production from the Canadian tar sands, which hold large reserves of ultraheavy oil. Oil Refineries are expanding now. AFP 08 – (worldwide news agency, April 28, “Shell unveils plans for ‘biggest refinery in US,” Breitbart.com, http://www.breitbart.com/article.php?id=060428150248.kurimp3k&show_article=1) Anglo-Dutch oil group Royal Dutch Shell has announced plans to make its jointly owned Motiva refinery in Port Arthur, Texas, the biggest in the United States. Shell founded the Motiva refiniery in 1998 with Saudi Refining and is considering increasing the output at the facility by 325,000 barrels per day. "The project would make the Port Arthur Refinery the largest in the country," Shell said in a statement on Friday. Output would rise to 610,000 barrels per day, higher than the 557,000 barrels per day produced by the ExxonMobil facility in Baytown, Texas, the current biggest in the country. "Pending necessary regulatory approvals, Motiva would expect to initiate final engineering later in 2006 and begin construction in 2007," said Shell, while underlining that a final decision to expand the facility had not been taken. "The new capacity would be projected to come online in 2010." A shortage of refining capacity worldwide has been identified as one of the reasons behind the recent surge in crude oil prices. Oil companies have been accused of failing to invest adequately in new facilities.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
7
Uniqueness—Refineries expanding now The US is increasing tar sand processing-3 new refineries are planned. Canada News Group 08 [“Report: U.S. Poised To Shift Most New Refining Capacity To Dirtier Tar Sands Oil Emitting Three Times More Global Warming Emissions In Extraction” http://www.newswire.ca/en/releases/archive/June2008/04/c8399.html, June 4] WASHINGTON and TORONTO, June 4 /CNW/ - Future oil refining in the U.S. may soon get much "dirtier" -- including three times more greenhouse gas emissions in the extraction process -- as refineries place their bets on a shift away from traditional crude oil to Canadian tar sands, according to a major new report issued today by the independent Environmental Integrity Project (EIP). The Washington, D.C. EIP released its new report today in conjunction with Toronto-headquartered Environmental Defence Canada (EDC). Titled "Tar Sands: Feeding U.S. Refinery Expansions With Dirty Fuel," the report notes: Two thirds -- 1.1 million barrels per day (bpd) - of the currently proposed increase in U.S. refining capacity of 1.6 million bpd would come from refining heavier, dirtier crude oil from Canadian tar sands. At the same time, more than 800,000 bpd of existing U.S. conventional crude capacity is proposed to be converted to processing oil from tar sands, so that conventional crude refining capacity is expected to undergo a net decrease of over 300,000 bpd, and the total net increase in refining capacity to come from tar sands would be over 1.9 million bpd. Since the average capacity of an oil refinery in the United States is 116,395 bpd, the contemplated 1.9 million bpd of increased tar sand capacity would be equivalent to constructing more than sixteen new refineries dedicated to tar sands. Increased tar sand refinery capacity is contemplated in Illinois and Texas (495,000 bpd together); Indiana (205,000 bpd); Louisiana (180,000 bpd); Michigan (15,000 bpd); Montana (13,000 bpd); North Dakota (65,000 bpd); Ohio (316,120 bpd); Oklahoma (44,700 bpd); South Dakota (400,000 bpd); and Wisconsin (200,000 bpd). Eric Schaeffer, director, Environmental Integrity Project, said: "It is hard to imagine what else it is that the U.S. oil industry could do to go backwards further and faster than to rely on Canadian tar sands or similar resources in the United States. Not only would this mean significantly more pollution overall, but it would substantially boost the greenhouse gas emissions linked to global warming. The U.S. government needs to get more involved in this situation to ensure that we do not end up with an environmental setback of truly staggering proportions." Matt Price, project manager for Alberta/BC Energy and Climate and contributor to the new report, Environmental Defence Canada, said: "The tar sands project is the most destructive project on Earth. Nowhere else are we talking about ripping up an area the size of Florida, creating massive toxic lakes you can see from space with the naked eye, and giving off three times the greenhouse gas emissions to produce oil when compared with conventional crude." Although a new oil refinery has not been built in the U.S. for over 30 years, five new refineries are currently under consideration, three of which would process tar sand oil (two in North Dakota and one in South Dakota), and one of which would process oil from U.S. oil shale deposits (North Dakota), which may be as destructive to mine and as dirty to refine as tar sand oil.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
8
Uniqueness—Refineries expanding now Exxon CEO says refineries are expanding now. Alden 08 – (Rich – staff writer for NPN, NPN.com – fuel, oil, industry online, “Exxon CEO: Refinery expansion can meet U.S. petroleum needs,” http://www.npnweb.com/uploads/featurearticles/2006/npnMarketPulse/032106_mp1.asp) Exxon Mobil Corp. Chairman and CEO Rex Tillerson said on March 21 that creeping refinery capacity expansion would keep up with growing U.S. demand for refined products without the need to build a new refinery. Paul Weissgarber, head of the oil and gas practice for management consulting firm A.T. Kearney, Dallas, who heard Tillerson speak at the National Petrochemical and Refiners Association annual meeting in Salt Lake City, told NPN MarketPulse, “The issue is that it’s very, very difficult to cite a new refinery in the U.S. Nobody wants a refinery in their backyard.” The public has accepted the locations of existing refineries, Weissgarber said. For that reason, expansion projects at those locations seem likely to face less resistance. “The public’s gotten used to them being there,” Weissgarber said. Increasing capacity through expansion costs far less than building from scratch, Weissgarber added. “The economics are such that it makes more sense to continue to expand the existing refineries. Some of these expansions are as large as the typical refinery used to be in the U.S.” Asked whether expansion would add capacity sufficient to meet growing U.S. demand, Weissgarber pointed out that Big Oil “is generating huge sums of cash. Everybody’s got capital projects either planned or already in progress. My perspective is that they’re going to add more capacity than what we’re going to see in the way of demand increases over the next three to five years.” A new refinery has not been built in the United States since 1976. Last year, President George W. Bush encouraged companies to build new oil refineries on old military bases to meet growing demand for gasoline and diesel, but so far none have planned to do so, Reuters reported in its coverage of the NPRA meeting. "We don't have any plans for a greenfield refinery in the U.S., primarily because we don't think there is a need for one," Tillerson told reporters at the meeting, according to Reuters. Tillerson said U.S. refiners should be able to maintain the average annual 2-percent expansion in crude oil refining capacity to keep up with demand. U.S. markets will also rely on imports, he said."We've been able to add 2 percent per year for the past 10 years and we would expect to continue to make those capacity additions," Tillerson said. "We still have a lot of potential for expansion in existing sites." A day earlier, the U.S. Energy Information Administration said U.S. fuel production capacity is expected to grow at about that rate in the remaining years of the decade as companies invest in expansion. EIA analyst Joanne Shore said an additional 1.7 million barrels per day of capacity was expected between 2005 and 2010 and that the burst of refining capacity could allow the United States to "keep up with demand growth for a while." Shore also said that historically refinery expansions tend to exceed the capacity additions originally planned. In the past year, U.S. refining companies have revealed plant expansion plans totaling more than a million barrels per day, adding to expansion projects already on the books, according to a Reuters survey. Experts have said, however, the planned expansions will not be enough to keep pace with demand growth, leaving the United States Refinery expansion inevitable Oil & Gas journal, 8 (Global crude capacity will rise nearly 11 million b/d by 2012, March 10, lexis) Despite the removal of some fore-cast capacity additions, North America remains a significant source of capacity growth. IEA forecasts that refiners will add 1.3 million b/d of crude distillation capacity through new projects during 2007-12. This forecast includes many large-scale expansion projects that IEA assumes will be approved in the next year. The most notable expansion is the Motiva Enterprises LLC (a Shell-Saudi Aramco joint venture) 325,000 b/d expansion of its Port Arthur, Tex., refinery. IEA did not include Chevron Corp.'s 200,000 b/d expansion of its Pascagoula, La., refinery because a final investment decision has not been made, suggesting it may not start operations before 2013. US crude distillation capacity will grow 1.1 million b/d between 2007 and 2012, according to IEA. The four largest projects, all due to start up in 2010-12, contribute 700,000 b/d. Of these projects IEA was only able to confirm that Marathon Oil Corp.'s 180,000 b/d Garyville, Ind., expansion received final investment approval, which indicates that the remaining 500,000 b/d of capacity may be delayed. Rising project costs have forced several refiners to defer, or scale back, expansion plans to meet capital budgets. IEA is also forecasting substantial investment in North American upgrading capacity (Fig. 4), mostly in new coking and hydrocracking units. North American refiners will continue to invest in substantial amounts of diesel, gasoline, and kerosine hydrotreating capacity through 2012. IEA expects more than 500,000 b/d of new coking capacity centered on refineries in Northern US states and Canada.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
9
Uniqueness—Refineries expanding Refineries will be expanded now. The White House 08 – (June, “Policy Memorandum: American Made Energy,” The Oil Drum, http://www.whitehouse.gov/news/releases/2008/06/20080618-9.html) There are 149 refineries in the U.S. today, refining approximately 15 million barrels of oil per day. While no new refineries have been built in the last 30-plus years, existing refineries have undergone extensive modifications to adapt to changes in demand, changes in crude oil inputs, changes in fuel outputs (e.g. gasoline vs. diesel), and costs. Over the last 10 years, total capacity increased 1.85 million barrels per day, the equivalent of adding 1 medium-sized refinery per year. These expansions all took place at existing facilities. A refinery expansion or modification requires multiple permits, and can be undertaken for several reasons, including: To increase production, for example by increasing crude oil capacity or improving the yield of certain products by adding a downstream unit process To produce different types of fuel (i.e. to change the product mix to more diesel relative to gasoline) To reduce costs, by improving reliability or switching to lower quality crude oils to comply with regulations requiring cleaner fuels and changing fuel specifications. Going forward, it is predicted that refineries will continue to need to undergo modification and expansion to meet evolving demand and evolving types of inputs. The Energy Information Administration predicts that overall future demand is expected to grow less than 0.5% per year and total capacity expansion is anticipated to flatten out starting in 2010. However, a shift in demand is predicted. Demand for petroleum-based gasoline is expected to decline by about 7% over the next 15 years while demand for diesel is expected to increase about 12% over the same time. There will also be a continued need for refinery modification to accommodate a changing mix in available crude oil. For example, refineries are and will be making investments to process the increasing quantities of heavy Canadian crude oil from tar sands. Successful completion of a refinery modification requires successful completion of the permitting processes, for example those required by the Clean Air Act and the Clean Water Act. There is no consolidated national permitting program because there are multiple Federal, state, and local permitting authorities and requirements. This leads to excessive and uncertain timeframes for permit reviews, and the potential for conflicting permitting requirements. Completing the permitting process can take 3 - 5 years. Permits that are approved may be the target of lawsuits. The protracted appeals process introduces additional timing uncertainty. Uncertainty and delay adds further strain on supply and can lead to increased costs to consumers
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
10
Uniqueness—Canadian imports now Fuel imports from Canada are set to grow. Financial Post 08[Claudia Cattaneo-Calgary Bureau Chief, Financial Post-“Canada, the world’s oil hot spot” June 04, http://www.financialpost.com/story.html?id=562833&p=2] HOUSTON - Americans may show little appreciation or awareness at times of Canada as their top energy supplier, but in this senior global oil-industry centre, Canada is hot. It's a big change in sentiment from a few years ago, when U. S. companies would rather cozy up to Russia or the Middle East than tough it out in the frozen north. Now, the size of the oilsands, the strong Canadian currency, even the emerging Horn River natural-gas play in northeast British Columbia, a lookalike of the fabulously successful Barnett Shale near Fort Worth, Tex., are big topics of conversation in this city's grand oil towers. Ed Stelmach and Danny Williams, premiers of oil-and gas-rich Alberta and Newfoundland, respectively, are well-known, and securing close relations with them has become a priority. Royalty policies are debated and compared. Curiosity about oilsands or East Coast offshore extraction technologies runs high. Energy Magazine, a Houston-based publication that covers the global energy scene, last month named Canada Country of the Year. Indeed, industry heavyweights such as Chevron Corp. would like a lot more Canada right now. "If you want me to put one word on it, it's 'enthusiastic,' " said Gary Luquette, Chevron vice-president and one of the highest-ranking executives for the company based in the city. "Chevron has targeted Canada as one of the areas where we really would like to grow." Part of the reason is that there is a greater understanding of the oilsands, what it takes to produce them, and the U. S market for Canadian oil, said Mr. Luquette, president of Chevron North America Exploration and Production Co. The San Ramon, Calif.-based oil supermajor was an early believer in the Northern Alberta deposits, as a partner in the Athabasca Oilsands Project run by Royal Dutch Shell PLC. Fuel imports from Canada are set to grow. Financial Post 08[Claudia Cattaneo-Calgary Bureau Chief, Financial Post-“Canada, the world’s oil hot spot” June 04, http://www.financialpost.com/story.html?id=562833&p=2] HOUSTON - Americans may show little appreciation or awareness at times of Canada as their top energy supplier, but in this senior global oil-industry centre, Canada is hot. It's a big change in sentiment from a few years ago, when U. S. companies would rather cozy up to Russia or the Middle East than tough it out in the frozen north. Now, the size of the oilsands, the strong Canadian currency, even the emerging Horn River natural-gas play in northeast British Columbia, a lookalike of the fabulously successful Barnett Shale near Fort Worth, Tex., are big topics of conversation in this city's grand oil towers. Ed Stelmach and Danny Williams, premiers of oil-and gas-rich Alberta and Newfoundland, respectively, are well-known, and securing close relations with them has become a priority. Royalty policies are debated and compared. Curiosity about oilsands or East Coast offshore extraction technologies runs high. Energy Magazine, a Houston-based publication that covers the global energy scene, last month named Canada Country of the Year. Indeed, industry heavyweights such as Chevron Corp. would like a lot more Canada right now. "If you want me to put one word on it, it's 'enthusiastic,' " said Gary Luquette, Chevron vice-president and one of the highest-ranking executives for the company based in the city. "Chevron has targeted Canada as one of the areas where we really would like to grow." Part of the reason is that there is a greater understanding of the oilsands, what it takes to produce them, and the U. S market for Canadian oil, said Mr. Luquette, president of Chevron North America Exploration and Production Co. The San Ramon, Calif.-based oil supermajor was an early believer in the Northern Alberta deposits, as a partner in the Athabasca Oilsands Project run by Royal Dutch Shell PLC.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
11
Uniqueness—Tar sand inevitable Canadian Tar Sand will inevitably be developed. Varteressian 08 – (Paul M. – a Canadian oil researcher, April, HVS Canada, Hotel Online, “Northern Alberta's Hotel Industry Fixed to the Sustainability and Performance of the Province's Oil and Natural Gas Industries,” http://www.hotelonline.com/News/PR2008_2nd/Apr08_Alberta.html) Perhaps the most certain piece of Alberta's oil equation is the growing demand for its conventional and unconventional oil supply. In North America, oil is a relatively inelastic consumer good as demand for it remains constant regardless of price. According to the CIAWorld Factbook, the United States currently consumes upwards of 21 million barrels of oil per day. Through the North American Free Trade Agreement and a royalty system that, despite the recent modest increase, remains lower than the world average for oil deposits of similar capacity, Canada has strategically aligned itself with the world's largest consumer of oil. Canada currently supplies 2 million barrels of crude oil daily to US consumers.12 The amount of Alberta and Canada's oil exports is expected to grow as the industry's upgrading, refining, and transportation infrastructure grows. Moreover, global demand for oil is expected to increase at an average annual rate of 2% for the next 30 years. In the future, Alberta's oil will continue to flow south to the US increasingly west to the Pacific Rim and China, the world's fastest growing economy and second largest consumer of oil. China currently consumes approximately 6.5 million barrels of oil per day. Alberta's role in world oil production continues to grow. Cheap oil is becoming harder to find, and soon the world's inhabitants will rely on "unconventional oil" for much of its energy. International oil companies like Exxon Mobil, Royal Dutch Shell, BP, and Total have invested massive amounts of capital into Alberta. This inevitable transition from light to heavy crude has transformed the economic and physical landscape of Northern Alberta forever. The lodging sector is one of Alberta's industries that has benefitted from robust oil activity. Over the past three years, the region's hotels have sheltered more white- and blue-collar workers than ever before. It is difficult to predict the strength of Canada's currency going forward or where the price of oil will be in one, two, or 20 years. What is relatively simple to assume is that as long as it is profitable to produce a barrel of oil in Alberta, the oil industry alone-and the hotel markets that shelter under it’s existencewill prosper well into the future. Transition to renewable is not inevitable – our oil addiction guarantees we will switch to tar sands The Nation, April 24, 2008 (Mark Hertsgaard, "Peak Oil: Running on Empty" http://dissentmag.wordpress.com/2008/05/18/peak-oil-running-on-empty/) At first glance, one might think that peak oil would help the fight against climate change. After all, less available oil should translate into less oil consumption and lower greenhouse gas emissions. But modern civilization, to borrow George W. Bush's term, is addicted to oil. If peak oil arrives before the addiction is treated, the junkie will seek even more dangerous ways to get his fix. Indeed, this is already happening. In Canada, energy companies are mining so-called tar sands–a mix of sand, water and heavy crude oil that can be refined into usable petroleum. But burning tar sands is about the worst thing to do if we want to avoid catastrophic climate change because the resulting petroleum has a much greater carbon footprint than conventional oil. Currently, a dozen such projects are under way; projects awaiting approval would quadruple the emissions those projects generate. One encouraging sign: in response to a lawsuit filed by Ecojustice, the top federal court in Canada has temporarily blocked a tar sands project proposed by an ExxonMobil subsidiary on climate change grounds. "This is something which will clearly apply to every single oil-sands project that comes before environmental assessment of any kind," said Sean Nixon, a lawyer for Ecojustice Canada.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
12
Uniqueness—Tar sand inevitable The US is increasing tar sand processing-3 new refineries are planned. Canada News Group 08 [“Report: U.S. Poised To Shift Most New Refining Capacity To Dirtier Tar Sands Oil Emitting Three Times More Global Warming Emissions In Extraction” http://www.newswire.ca/en/releases/archive/June2008/04/c8399.html, June 4] WASHINGTON and TORONTO, June 4 /CNW/ - Future oil refining in the U.S. may soon get much "dirtier" -- including three times more greenhouse gas emissions in the extraction process -- as refineries place their bets on a shift away from traditional crude oil to Canadian tar sands, according to a major new report issued today by the independent Environmental Integrity Project (EIP). The Washington, D.C. EIP released its new report today in conjunction with Toronto-headquartered Environmental Defence Canada (EDC). Titled "Tar Sands: Feeding U.S. Refinery Expansions With Dirty Fuel," the report notes: Two thirds -- 1.1 million barrels per day (bpd) - of the currently proposed increase in U.S. refining capacity of 1.6 million bpd would come from refining heavier, dirtier crude oil from Canadian tar sands. At the same time, more than 800,000 bpd of existing U.S. conventional crude capacity is proposed to be converted to processing oil from tar sands, so that conventional crude refining capacity is expected to undergo a net decrease of over 300,000 bpd, and the total net increase in refining capacity to come from tar sands would be over 1.9 million bpd. Since the average capacity of an oil refinery in the United States is 116,395 bpd, the contemplated 1.9 million bpd of increased tar sand capacity would be equivalent to constructing more than sixteen new refineries dedicated to tar sands. Increased tar sand refinery capacity is contemplated in Illinois and Texas (495,000 bpd together); Indiana (205,000 bpd); Louisiana (180,000 bpd); Michigan (15,000 bpd); Montana (13,000 bpd); North Dakota (65,000 bpd); Ohio (316,120 bpd); Oklahoma (44,700 bpd); South Dakota (400,000 bpd); and Wisconsin (200,000 bpd). Eric Schaeffer, director, Environmental Integrity Project, said: "It is hard to imagine what else it is that the U.S. oil industry could do to go backwards further and faster than to rely on Canadian tar sands or similar resources in the United States. Not only would this mean significantly more pollution overall, but it would substantially boost the greenhouse gas emissions linked to global warming. The U.S. government needs to get more involved in this situation to ensure that we do not end up with an environmental setback of truly staggering proportions." Matt Price, project manager for Alberta/BC Energy and Climate and contributor to the new report, Environmental Defence Canada, said: "The tar sands project is the most destructive project on Earth. Nowhere else are we talking about ripping up an area the size of Florida, creating massive toxic lakes you can see from space with the naked eye, and giving off three times the greenhouse gas emissions to produce oil when compared with
Although a new oil refinery has not been built in the U.S. for over 30 years, five new refineries are currently under consideration, three of which would process tar sand oil (two in North Dakota and one in South Dakota), and one of which would process oil from U.S. oil shale deposits (North Dakota), which may be as destructive to mine and as dirty to refine as tar sand oil. conventional crude."
Canadian Tar Sand will inevitably be developed. Varteressian 08 – (Paul M. – a Canadian oil researcher, April, HVS Canada, Hotel Online, “Northern Alberta's Hotel Industry Fixed to the Sustainability and Performance of the Province's Oil and Natural Gas Industries,” http://www.hotelonline.com/News/PR2008_2nd/Apr08_Alberta.html) Perhaps the most certain piece of Alberta's oil equation is the growing demand for its conventional and unconventional oil supply. In North America, oil is a relatively inelastic consumer good as demand for it remains constant regardless of price. According to the CIAWorld Factbook, the United States currently consumes upwards of 21 million barrels of oil per day. Through the North American Free Trade Agreement and a royalty system that, despite the recent modest increase, remains lower than the world average for oil deposits of similar capacity, Canada has strategically aligned itself with the world's largest consumer of oil. Canada currently supplies 2 million barrels of crude oil daily to US consumers.12 The amount of Alberta and Canada's oil exports is expected to grow as the industry's upgrading, refining, and transportation infrastructure grows. Moreover, global demand for oil is expected to increase at an average annual rate of 2% for the next 30 years. In the future, Alberta's oil will continue to flow south to the US increasingly west to the Pacific Rim and China, the world's fastest growing economy and second largest consumer of oil. China currently consumes approximately 6.5 million barrels of oil per day. Alberta's role in world oil production continues to grow. Cheap oil is becoming harder to find, and soon the world's inhabitants will rely on "unconventional oil" for much of its energy. International oil companies like Exxon Mobil, Royal Dutch Shell, BP, and Total have invested massive amounts of capital into Alberta. This inevitable transition from light to heavy crude has transformed the economic and physical landscape of Northern Alberta forever. The lodging sector is one of Alberta's industries that has benefitted from robust oil activity. Over the past three years, the region's hotels have sheltered more white- and blue-collar workers than ever before. It is difficult to predict the strength of Canada's currency going forward or where the price of oil will be in one, two, or 20 years. What is relatively simple to assume is that as long as it is profitable to produce a barrel of oil in Alberta, the oil industry alone-and the hotel markets that shelter under it’s existencewill prosper well into the future.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
13
Uniqueness—investments now Growth of Canadian oil production is triggering a wave of refinery investments. Wilcox, 2008 (Mike, global head of downstream oil consulting for Wood Mackenzie, “Alberta oil sands triggers investment wave”, June 9, lexis) The projected growth of Alberta oil sands production, which has in place some 1.75 trillion bbl of resources, is triggering a wave of investments, said Wood Mackenzie Ltd., Pipeline companies and refiners plan to invest more than $31 billion by 2015 to export and distribute oil sands products and to process them in the US refining system, based on disclosed project costs. That's not counting investments in internal pipelines in Alberta, the Canadian refining and upgrading system, or undisclosed refining investment, officials said. "Overall planned investments are well positioned to ensure sufficient pipeline and refinery capacity to 2015, but any delays to key pipeline projects could result in significant bottlenecks," warned Lindsay Sword, global refinery research manager for Wood Mackenzie.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
14
Refineries on the brink Refineries are on the brink now due to newly implemented renewable fuel standards—further investments in alternative energy will drive them over the edge Drevna, 08 - President National Petrochemical and Refiners Association (Charles, CAPITOL HILL HEARING TESTIMONY, 5/6, CQ Congressional Testimony, lexis) At this point, it is still too early to evaluate this program. However, NPRA believes that the implementation of the RFS program is off to a good start. It is worthy to note, however, that the refining industry will have, over the first two years of the program, surpassed the statutory minimums for blending of renewables. It is further anticipated that refiners will continue to exceed the minimum requirements over the next several years. We believe this affirms our stated position that mandates are unnecessary and that a fuel supply, transportation and distribution system based on free market principles should be the option of choice. Oil refineries are being invested in now but we’re on the brink Chapman, 5 [Gary, Regularo Contributor to the Austin American-Statesman, “The 'peak oil' problem: It should concern us all”—4/29, Lexis] The price of oil is not only pinching consumers at the pump, it's beginning to put pressure on politicians. On Monday, President Bush walked hand-in-hand with his friend Crown Prince Abdullah of Saudi Arabia, in an attempt to convey that the White House has at least noticed gas prices well above $2 a gallon. Then on Wednesday, Bush began outlining his energy plan, which includes a lot more nuclear power plants and possibly using decommissioned military bases as sites for new oil refineries. On the same day that Bush and Abdullah met in Crawford, energy executives and experts assembled in Edinburgh, Scotland, to talk about the long-term prospects for oil in the global economy. Matthew Simmons, a U.S. investment banker, told the conference: "Demand is pulling away from supply . . . and we have to ask whether we have the resources that we think we do. It could be catastrophic if we do not anticipate when peak oil comes." The concept of "peak oil" is beginning to rattle and even terrify energy experts and policy-makers. It refers to the point -- exactly when, no one knows for certain -when the world will have reached its peak of oil production and when production will start a slow, inexorable slide to zero. No one doubts this will happen; the question is when. The price of oil in the past has fluctuated because of changes in supply and demand. But today, as Simmons noted, demand is stressing global oil production, and there is essentially no slack. This means the current price of a barrel of oil, about $55 -- which is $20 more than a year ago -- is likely to be just the beginning of a permanent rise. The world's oil producers already have admitted that they no longer control the price, as they once did. The production system is running at about 98 percent of capacity, and it is stressed at 95 percent, according to the dean of energy analysts, Charles T. Maxwell.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
15
Refineries on the brink Refineries are near the breaking point, forcing dependence on foreign oil. Saefong 04 – (Myra P - reporter for CBS.MarketWatch.com in San Francisco., CBS.MarketWatch.com, “U.S. refineries near breaking point: Output hike not an option to combat record gas prices,” http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B474AD4EC-68D0-477B-8CD5F0A29DB871C0%7D&siteid=mktw) U.S. refineries already are near a breaking point, running at around 90 percent of capacity or higher over the past year. Throw in a strong summer-driving season or a refinery or two closing for emergency repairs and you have the makings of a disaster for consumers and suppliers alike. "No new (U.S.) refineries have been built in decades," said Kevin Kerr, editor of newsletter Kwest Market Edge. The facilities that do exist are "aging and pushed to the limit," he said, calling them the "Mir Space Station of the energy business." A survey released Sunday found the average price of all grades of gas nationwide reach a record $1.77 a gallon Friday. The Lundberg Survey noted the average price is up almost 26 cents since Jan. 1. Analyst Trilby Lundberg said the spike reflects a rise in crude-oil prices and increased refinery work to prepare for higher spring and summer demand. She doesn't expect prices to rise much further. Yet other analysts say domestic refineries can't keep up with gasoline demand as it is, forcing the U.S. to import more fuel to cover its supply deficit. As much as 10 percent of the nation's gasoline need was supplied from offshore last year, according to Geoff Sundstrom, a spokesman for AAA, North America's motoring and leisure-travel organization. The U.S. imported almost 10 million barrels of crude a day in the week ended March 5, which isn't enough to meet rising demand. It's the ability to refine that oil into usable products that's a bigger issue, analysts said. "Forget the disaster that is the crude-supply problem," Kerr said. "Without a functioning refinery system in place, the whole chain breaks down. You can have all the crude in the world and no way to refine it, and all you have is a lot of crude."Doing the math Analyzing the supply-and-demand equation for the coming summer, Tom Kloza, chief oil analyst at the Oil Price Information Service, sees serious risk of market instability. Domestic gasoline production averaged 8.7 million barrels per day last summer, he said, and gasoline imports comprised 750,000 barrels per day or so. When gasoline imports declined to around 500,000 barrels per day, the market ran into trouble, Kloza said. Looking at this summer's likely scenario, he predicts the market will see gasoline demand of 9.3 million barrels a day. Given present domestic output and import levels, the market will probably use about 100,000 barrels a day more gasoline than it's bringing to the market, Kloza said. Just a 1 percent or 2 percent change in demand can have "dramatic effects" on the whole system, he said. "The homeostasis of the gasoline business in the driving season is quite delicate." Refinery constraints Charles Perry, chairman of energy consulting firm Perry Management, issued a fairly accurate assessment of today's refinery situation nearly four years ago, warning of the potential for a "refinery and distribution crisis." In a recent interview, Perry said, "The availability of [oil] products in the market has just gotten a lot tighter."
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
16
Refineries on the brink Refineries are near the breaking point, forcing dependence on foreign oil. Saefong 04 – (Myra P - reporter for CBS.MarketWatch.com in San Francisco., CBS.MarketWatch.com, “U.S. refineries near breaking point: Output hike not an option to combat record gas prices,” http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B474AD4EC-68D0-477B-8CD5F0A29DB871C0%7D&siteid=mktw) U.S. refineries already are near a breaking point, running at around 90 percent of capacity or higher over the past year. Throw in a strong summer-driving season or a refinery or two closing for emergency repairs and you have the makings of a disaster for consumers and suppliers alike. "No new (U.S.) refineries have been built in decades," said Kevin Kerr, editor of newsletter Kwest Market Edge. The facilities that do exist are "aging and pushed to the limit," he said, calling them the "Mir Space Station of the energy business." A survey released Sunday found the average price of all grades of gas nationwide reach a record $1.77 a gallon Friday. The Lundberg Survey noted the average price is up almost 26 cents since Jan. 1. Analyst Trilby Lundberg said the spike reflects a rise in crude-oil prices and increased refinery work to prepare for higher spring and summer demand. She doesn't expect prices to rise much further. Yet other analysts say domestic refineries can't keep up with gasoline demand as it is, forcing the U.S. to import more fuel to cover its supply deficit. As much as 10 percent of the nation's gasoline need was supplied from offshore last year, according to Geoff Sundstrom, a spokesman for AAA, North America's motoring and leisure-travel organization. The U.S. imported almost 10 million barrels of crude a day in the week ended March 5, which isn't enough to meet rising demand. It's the ability to refine that oil into usable products that's a bigger issue, analysts said. "Forget the disaster that is the crude-supply problem," Kerr said. "Without a functioning refinery system in place, the whole chain breaks down. You can have all the crude in the world and no way to refine it, and all you have is a lot of crude."Doing the math Analyzing the supply-and-demand equation for the coming summer, Tom Kloza, chief oil analyst at the Oil Price Information Service, sees serious risk of market instability. Domestic gasoline production averaged 8.7 million barrels per day last summer, he said, and gasoline imports comprised 750,000 barrels per day or so. When gasoline imports declined to around 500,000 barrels per day, the market ran into trouble, Kloza said. Looking at this summer's likely scenario, he predicts the market will see gasoline demand of 9.3 million barrels a day. Given present domestic output and import levels, the market will probably use about 100,000 barrels a day more gasoline than it's bringing to the market, Kloza said. Just a 1 percent or 2 percent change in demand can have "dramatic effects" on the whole system, he said. "The homeostasis of the gasoline business in the driving season is quite delicate." Refinery constraints Charles Perry, chairman of energy consulting firm Perry Management, issued a fairly accurate assessment of today's refinery situation nearly four years ago, warning of the potential for a "refinery and distribution crisis." In a recent interview, Perry said, "The availability of [oil] products in the market has just gotten a lot tighter." Most U.S. refinery construction now is on desulfurization equipment mandated for lower sulfur requirements for gasoline and diesel -- and none of it adds refining capacity, he said. About 177,000 barrels of refining capacity were added worldwide in 2003, Perry said, citing an Oil and Gas Journal survey. "That's on an 82 million-barrel base, so it added two-tenths of a percent." No new refineries have been built in the U.S. in 25 to 30 years, he said, and smaller ones that mostly produced 100,000 barrels a day or less are being shutdown. Shell (UK:SHEL: news, chart, profile) plans to close a 70,000-barrel-a-day Bakersfield, Calif. refinery in October."For a refinery to be feasible nowadays, it needs to be a minimum of 250,000 barrels per day and located over a deepwater port," Perry said. Those that do run make a total of 15 million barrels a day on average, and that figure drops by around 10 percent during any maintenance or turnarounds, which involve a production switch to a different fuel output. Expansion beyond adding desulphurization equipment is out of the question right not, Perry said. Refiners are "going to have to direct a lot of their capital to desulphurization," he said, at least through 2008.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
17
Renewables Inevitable/Free market better Allowing the free market to bring about renewables is comparatively better than a mandate—the status quo solves the aff and there’s only a risk of an external impact Taylor, 1 – Jerry, Director of Natural Resource Studies at the Cato Institute, “Free market trumps policy,” – July 17, 2001, USA Today and Cato.org The Bush administration hits the road this week to make the case that "we" need to produce more energy, that "we" need to conserve energy and that "we" need to invest more in nuclear power, clean coal and renewable fuels. A question: Who's this "we"? High prices in oil, natural gas and electricity in the West signaled to any who would pay attention that those commodities were in scarce supply. Consumers responded by cutting back on energy. Industry responded by investing in new supply -- not out of kindness, of course, but in a bid to get their share of the spectacular profits available in the energy business. And what do you know? Energy prices collapsed across the board. Free markets, not government programs, achieved all of that in a matter of months. "We" didn't need a government energy plan then, and "we" don't need one now. High prices, while politically unpopular, are the only sure ways to encourage conservation and new supply. The best energy plan is to let markets work and get the government out of the way. Sure, there may still be bumps on the road ahead, but government's record at smoothing out those energy-market bumps is abysmal indeed. Unregulated renewable investment is inevitable and better than regulation Taylor, 97 – Jerry, director of natural resource studies at Cato, “A Freer Market for Electricity Would Lower Energy Costs, Half Measures Fall Short” San Diego Union Tribune, 2/2/1997, The Cato Institute Simply put, there are no longer significant economies of scale in the electricity business. Spot and futures markets for electricity have eroded any lingering monopoly. Advances in micro-turbine technology have made self-generation a viable alternative to the grid and threaten to render central station power generation obsolete. Finally, as long as markets are theoretically contestable, monopolists invariably price as if competition were a present reality (that is the reason, incidentally, that Wal-Mart doesn't jack up prices once its competitors are neutralized; it doesn't want to tempt others into the market). Managed competition not only prevents California from achieving the kind of rate reductions and service vitality that free markets in electricity would deliver, but it also threatens a second bailout of the electricity industry in a decade or so. That's because it's aimed at creating and protecting a new market structure -- publicly controlled transmission and distribution of centrally dispatched power -- that is being rendered obsolete by market forces that no regulatory body can ultimately control. As Trigen Energy CEO Thomas Casten notes, "Central dispatch generation . . . is finished as an economically viable technology. In its place, widespread installation of smaller, more efficient generation, close to heat loads, will come to predominate and will collapse the value of much of today's generation -- and transmission -- assets." The best answer to these dilemmas is for the state to simply let go of the industry. No ratepayer bailout for utility losses. No public seizure of the grid. No more expensive subsidies. Simply tear down the laws protecting utilities from competition and let businesses have at it. If the state Legislature can't quite bring itself to trust the marketplace, let it turn the California Public Utility Commission into a specialized antitrust board to serve as a court of first resort for complaints about anti-competitive behavior in the industry. If the last several decades have taught us anything, it is that the best regulator of markets is dynamic, free and open competition. That such competition exists in electricity service is staring the industry in the face.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
18
Renewables Inevitable The market will inevitably force renewables on consumers—the only question is whether or not the aff mandates them States News Service, 8: PRESS CONFERENCE ON GLOBAL PRIVATE INVESTMENTS AND CLIMATE CHANGE, 6/9, Lexis On the current energy crisis, Assembly President Kerim said that, while soaring oil prices were affecting society at all levels -- food prices, transport costs, agriculture, material costs, among others -- it also stimulated thinking about alternative energy sources. Renewable energy now accounted for about 14 per cent of energy use, so there was a lot of potential for bolder steps, especially in wind and solar energy, and in the provision of jobs. He said that investing in that sector would lead to a host of economically viable solutions because, at the end of the day, people would realize that renewable energy could handle the same tasks cheaper and more efficiently, while also create new jobs. Ms. Lubber added that high oil prices would also force changes in consumption patterns as people started buying smaller cars and sought out clean energy products and solutions.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
19
Renewables fail Renewables are not the answer to the energy crisis Mortished 07 – (Carl – World Business Editor, June 25, The Austrailian, “Energy crisis 'cannot be solved by renewables', http://www.theaustralian.news.com.au/story/0,20867,21962585-30417,00.html) THE world is blinding itself to the reality of its energy problems, ignoring the scale of growth in demand from developing countries and placing too much faith in renewable sources of power, according to two leaders of the global energy industry. The chief executive of Royal Dutch Shell today calls for a “reality check”. Writing in The Times, Jeroen van der Veer takes issue with the widespread public opinion that green energy can replace fossil fuels. Shell’s chief gives warning that supplies of conventional oil and gas will struggle to keep pace with rising energy demand and he calls for greater investment in energy efficiency. Instead of a great conversion to wind power and solar power, Mr van der Veer predicts, the world will be forced into greater use of coal and much higher CO2 emissions, “possibly to levels we deem unacceptable”. Alternative energy sources, such as renewables, will not fill the gap, says Mr van der Veer, who forecasts that even with major technological breakthroughs, renewables could account for only 30 per cent of energy supply by the middle of the century. “Contrary to public perceptions, renewable energy is not the silver bullet that will soon solve all our problems,” he writes. The warning from Royal Dutch Shell coincides with a critique of public energy policy by Rex Tillerson, the chief executive of ExxonMobil. Speaking at the Royal Institute for International Affairs in London, Mr Tillerson pointed to a widespread failure by policymakers to understand the extent to which the aspirations of people in developing countries are fuelling growth in demand for energy. Mr Tillerson said that world energy demand would rise by 45 per cent by 2030, and fossil fuels – oil, natural gas and coal – were the only energy sources of sufficient size, adaptability and affordability to meet the world’s needs. Mr van der Veer casts doubt today on the oil and gas industry’s ability to keep up with accelerating demand. “Just when energy demand is surging, many of the world’s conventional oilfields are going into decline,” he writes. Although there is no shortage of oil and gas in the ground, Mr van der Veer says, the industry currently lacks the technology to recover even half of that resource. Mr Tillerson, speaking at Chatham House, expressed doubts about the oil industry’s ability to raise its game significantly without access to the oil reserves of the Opec countries of the Middle East. “The supply outlook for nonOpec countries will be modestly up or flat,” Mr Tillerson predicted. He was sceptical about the drive by governments to increase use of biofuels and said that a fifth of the US’s corn crop was being used to produce four billion gallons of ethanol, compared with targets of 12 billion gallons by 2012. The ExxonMobil chief criticised the EU’s carbon trading system, calling it an administratively complex system that lacked transparency and failed to deliver a uniform and predictable cost of carbon. “It’s all about moving the money around,” he said. Mr Tillerson said he would prefer a carbon tax that would enable the cost of carbon to spread through the economy in a uniform way, letting governments use the revenues to mitigate its effect by reducing employment or income taxes.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
20
Link—High demand KT refinery investment Refinery expansion is increasing now to deal with greater demand States News Service, 8 – “POLICY MEMORANDUM: AMERICAN MADE ENERGY” 6/18 Lexis Congress should pass legislation authorizing oil and gas development in the 10-02 area of ANWR. 4. REFINERIES Background There are 149 refineries in the U.S. today, refining approximately 15 million barrels of oil per day. While no new refineries have been built in the last 30-plus years, existing refineries have undergone extensive modifications to adapt to changes in demand, changes in crude oil inputs, changes in fuel outputs (e.g. gasoline vs. diesel), and costs. Over the last 10 years, total capacity increased 1.85 million barrels per day, the equivalent of adding 1 medium-sized refinery per year. These expansions all took place at existing facilities. A refinery expansion or modification requires multiple permits, and can be undertaken for several reasons, including: To increase production, for example by increasing crude oil capacity or improving the yield of certain products by adding a downstream unit process To produce different types of fuel (i.e. to change the product mix to more diesel relative to gasoline) To reduce costs, by improving reliability or switching to lower quality crude oils To comply with regulations requiring cleaner fuels and changing fuel specifications. Going forward, it is predicted that refineries will continue to need to undergo modification and expansion to meet evolving demand and evolving types of inputs. The Energy Information Administration predicts that overall future demand is expected to grow less than 0.5% per year and total capacity expansion is anticipated to flatten out starting in 2010. However, a shift in demand is predicted. Demand for petroleum-based gasoline is expected to decline by about 7% over the next 15 years while demand for diesel is expected to increase about 12% over the same time. There will also be a continued need for refinery modification to accommodate a changing mix in available crude oil. For example, refineries are and will be making investments to process the increasing quantities of heavy Canadian crude oil from tar sands.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
21
Link—High demand KT refinery investment Refineries are at maximum capacity—they will invest in new plants only if they believe that demand will stay high. Analyst Wire, 04 (Nightly Business Report, June 21, lexis). EASTABROOK: U.S. refiners blame decades of tougher environmental regulations for creating what they call a serious capacity crunch. In 1980 there were 325 refineries nationwide. Today there are fewer than half that number. Many plants have been mothballed because upgrading them to meet tighter government standards would have been too expensive. Refiners have compensated for the lost plants by expanding some existing ones. But they say those refineries are straining to meet consumers growing demand for gasoline. BOB SLAUGHTER, PRES., NATL. PETROCHEMICAL & REFINERS ASSN.: We re in a situation where the U.S. refining capacity has declined by 10 percent over the last 20 years while the U.S. demand for petroleum products has increased by over 20 percent. Obviously that s a trend that can t continue. And the answer is we need more refining capacity. EASTABROOK: Refiners also argue the U.S. infrastructure is so stretched right now that any sort of disruption could potentially cause shortages and price spikes. Just a few years ago a fire broke out at this Citgo plant, crippling it for nine months. And during that time its output was cut in half. Building new refineries would help ease the current crunch. But analysts estimate it would take 10 years and about a billion dollars to build one new plant. They say that s an investment most refiners won t make. SEAN SEXTON, ENERGY ANALYST, FITCH RATINGS: It s really a fine line between their return on capital and how much capacity is in the industry. And I don t think you ll see many companies investing in growth projects to increase capacity unless they re confident there s really going to be a really consistent demand for that increased capacity going forward. Oil demand drives refining industry growth and oil company investment. Schoen 2004 [John, Senior Producer, MSNBC, “US refiners stretch to meet demand,” November 22] The forest of oil refining towers on this sprawling industrial complex on Galveston Bay sits in the heart of the greatest concentration of refining capacity in the world. Roughly half of the gasoline consumed in the U.S. is made along this stretch of Gulf coast from Corpus Christi, Texas to New Orleans. At the Valero refinery here, miles of pipe snake through the complex in a maze of loops and neat, right-angle turns that surround and connect the towers. This refinery processes nearly a quarter of a million barrels of crude oil every day. And general manager Ralph Phillip is always looking for ways to squeeze a little more through those pipes. “Over time, if you’re a good businessman, you say: ‘Okay, I’ve got this facility, and I’m making 160,000 barrels a day,” he said on a recent tour. “’If can make 170,000, it’s worth this much money. Where do I go do that — if I can find that bottleneck in my refinery and spend some money to fix that?’” Fixing those bottlenecks is more important than ever as the U.S. gasoline market winds down from a summer of record breaking prices — as ever-growing demand reached the limits of the country’s refining capacity. As tight inventories and fears of supply interruptions sent prices soaring this spring, U.S. refiners stepped on the gas pedal. “We had such great prices and great (profit) margins for refiners that they ran as hard as they could in the second quarter and produced tremendous amount of product — one of the strongest quarters ever, if not the strongest,” said Jacques Rousseau, an analyst who follows the refining industry at Friedman, Billings, Ramsey. But even as the peak summer driving season winds down, U.S. refiners continue to operate nearly flat out. As of this week, the industry is producing gasoline and other end products at something like 98 percent of capacity. And with the overall growth in demand for motor fuels and heating oil showing no signs of slowing, prices will continue to be driven as much by tight refining capacity as by the recent run-up in crude prices. Investments in alternative energy only occur because of high demand—reducing demand will change it CityWire, 8 – “Global Themed Investments Part Five: Switched on to long-term energy returns” 6/8, Lexis One offshoot of high oil and gas prices and problems with bringing new reserves online is the growth of interest in nuclear power. Only 6% of the world energy supply comes from nuclear power, but Wheaton says this has to rise. Wheaton says investability is low due to heavy government ownership and the price of uranium, a classic nuclear play, slumped last year. But he points to miner Kazatomprom, which also makes fuel assemblies for reactors and processor Cameco as attractive ways to gain exposure to this trend. This may sit uneasily with green investors, but nuclear will have to be in the energy mix if we are to fulfil expected demand growth, Wheaton says.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
22
Link—High demand KT refinery expansion Increased oil demand is key to refinery expansion Oil & Gas journal, 8 (Global crude capacity will rise nearly 11 million b/d by 2012, March 10, lexis) Global crude distillation capacity will increase 10.6 million b/d during 2007-12--9.1 million b/d of new capacity and 1.5 million b/d of capacity creep--according to a report from the International Energy Agency (IEA) entitled "Medium-Term Oil Market Report." The expansion in refining capacity will be in response to an increase in oil demand of 9.6 million b/d by 2012. IEA feels that investment in sophisticated refinery capacity is continuing and it foresees significant improvement in refinery flexibility despite project inflation and slippage similar to that seen in the upstream sector. Current refinery investment should increase refiners' ability to process heavy, sour OPEC spare capacity that was of little interest to them during the past few years, IEA feels. Refiners will be able to upgrade more fuel oil into lighter transportation fuels, which should improve their ability to meet demand growth in gasoline and diesel. But this will affect prices and price differentials.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
23
Link—Renewables Federal renewables legislation would undermine investment in refineries. Campoy 08 – (Ana - , June 12, The Wall Street Journal, “Refiners Face Obstacles to Processing Cheaper, Dirtier Crude Oil,” http://online.wsj.com/article/SB121322847813566247.html?mod=googlenews_wsj Refiners say limits on greenhouse-gas emissions being developed by the federal government also could throw a wrench into their plans to use heavier crudes, particularly crude from Canadian tar sands. Among the biggest threats: potential laws that would penalize fuels derived from heavier, more carbon-intensive sources. Refiners say such rules don't make sense at a time when the government is pushing to minimize demand for Mideast oil. "We have all these facilities that we, as domestic refiners, have spent billions of dollars upgrading so we can run Canadian crude, and then [the government] is going to turn around and say there's going to be a significant penalty in using those?" says Charles Drevna, president of the National Petrochemical and Refiners Association, an industry group. "And in the meantime, everyone's complaining about the price of a gallon of gas." While processing heavy crude makes economic sense, breaking down thick, sticky crude into light fuels such as gasoline or diesel requires more energy, which means more greenhouse-gas emissions, says Thomas O'Connor, senior manager at ICF International, a consulting-services company. In Richmond, Chevron wants to upgrade its refinery to be able to process higher-sulfur crude, among other reasons. In the past, regulators have mostly stuck to restricting what comes out of the refinery, not what goes in. But Richmond's planning commission, which is vetting the project, is siding with activists who complained about the environmental impact of the dirtier fuel.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
24
Link—LCFS Low carbon fuel standards cut off importation of oil sands and tank the Canadian economy—it is a key issue in our relationship. Alberts, 6-24 (Sheldon, 2008, Washington correspondent for the National Post. “Obama's fight against 'dirty oil' could hurt oil sands” http://www.nationalpost.com/most_popular/story.html?id=610810) Barack Obama on Tuesday vowed he would break America's addiction to "dirty, dwindling, and dangerously expensive" oil if he is elected U.S. president -- and one of his first targets might well be Canada's oil sands. A senior adviser to Mr. Obama's campaign told reporters it's an "open question" whether oil produced from northern Alberta's oilsands fits with the Democratic candidate's plan to shift the U.S. sharply away from consumption of carbon-intensive fossil fuels. "If it turns out that those technologies don't advance . . . and the only way to produce those resources would be at a significant penalty to climate change, then we don't believe that those resources are going to be part of the long-term, are going to play a growing role in the long-term future," said Jason Grumet, Mr. Obama's senior energy adviser. The remarks amount to a shot across the bow of Alberta's oil sands industry, which is planning to boost production from 1.3 million barrels a day to 3.5 million barrels over the next decade. The industry has come under sustained attack from U.S. environmentalists over the past year because the production of its heavy oil emits an estimated three times more greenhouse gases than conventional oil. Mr. Obama has cast himself as a champion of green energy during his White House campaign, proposing a national low-carbon fuel standard that would reduce greenhouse gas emissions by 180 million metric tons by 2020. He has also promised to invest $150-billion in developing alternative energy, and to reduce American dependence on foreign oil by 35% by 2030. "The possibilities of renewable energy are limitless," Mr. Obama said in an energy policy speech Tuesday in Las Vegas. "We've heard promises about it in every State of the Union [speech] for the last three decades. But each and every year, we become more, not less, addicted to oil -- a 19th-century fossil fuel that is dirty, dwindling, and dangerously expensive." In a campaign conference call held Monday in advance of Mr. Obama's speech, the Illinois senator's top advisers were asked what impact his energy plan might have on U.S. imports from Canada's oil sands. There is "a lot of technological development underway" to reduce the carbon footprint of oil sands production, Mr. Grumet said, but there continues to be "unacceptably high carbon emissions" associated with production of the fuel. "The amount of energy that you have to use to get that oil out of the ground is such that it actually creates a much greater impact on climate change, as well as using much more energy than even traditional petroleum," he said. Mr. Obama is committed to supporting energy sources that help slow climate change if elected -- and he will reward industries that meet tough new greenhouse gas standards, Mr. Grumet said. "It's a meritocracy. We are going to support resources that diversify petroleum supplies, that bring more production to this hemisphere, and that meet our long-term obligations to reduce greenhouse gas emissions," he said. "And I think it's an open question as to whether or not the Canadian resources are going to meet those tests." Senator John McCain, the Republican presidential candidate, has also vowed to support alternative energy and reduce U.S. dependence on foreign oil. Mr. McCain has placed more emphasis, however, on the need to lower American reliance on oil from the Middle East and countries like Nigeria and Venezuela. "America imports about one-third of its oil from Canada and Mexico and no one need worry about a reliance on friendly, stable neighbours, and partners
Christopher Sands, a Canada-U.S. relations expert at the Washington-based Hudson Institute, said Mr. Obama's energy policy could pose as big a challenge to the Canadian economy as his vow to renegotiate the North American Free Trade Agreement. "What he wants to do, clearly, is to eliminate oil sources like the oil sands. He is very aware of them and the process that's generating them," Mr. Sands said. "That is a threat to the oilsands and [Canada] has to take this much more seriously." Canada is the largest supplier of oil and gas to the U.S. and Ottawa has spent several years -- particularly since the 9-11 terrorist attacks -- promoting the country as a safe and secure source of energy for the American market. in NAFTA," Mr. McCain said in a speech Monday in Fresno, Calif.
Cap and trade and LCFS trade off with processing of Canadian crude Chicago Tribune 08 [Michael Hawthorne-Tribune Reporter, “Midwest Projects Would Increase Emission Up to 40%, February 12, http://www.chicagotribune.com/news/local/chi-greenhouse_12feb12,0,6312287.story] With oil prices soaring, many leading climate scientists and environmental groups are calling for action that would offset the financial incentives to process heavy Canadian crude. They want a national policy that takes the price of carbon emissions into account."If carbon isn't considered in these huge investments, we are going to be stuck with a tremendous burden," said Henry Henderson, a former Chicago environment commissioner who now heads the Natural Resources Defense Council's Midwest office. A cap-and-trade system is one way to do that. Another is setting standards that require greater reliance on low-carbon fuels. A California initiative considers all greenhouse gases produced during fuel production, from pollution released as oil is pumped from the ground to the exhaust from tailpipes. A national version of that standard would mean oil companies could still make fuels derived from the oil sands, but they would have to balance the higher emissions with lowercarbon products, said Alex Farrell, a professor at the University of California at Berkeley.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
25
Link—LCFS A national LCFS would increase oil dependence by restricting Canadian oil The Washington Times 2008 (Stephen Dinan, June 20, “McCain oil plan fosters reliance on Middle East; U.S., Canadian sources ‘dirty’, Lexis) The presumed Republican presidential nominee called last year to expand California's low carbon fuel standard, which measures the amount of greenhouse gases needed to produce fuel and punishes use of "dirty" heavy crude oil in favor of conventional light crude or alternative fuels. Expanding that plan nationwide would force U.S. refiners to buy less American and Canadian oil - which come increasingly from dirty sources like shale and tar sands - and instead use more oil from the Middle East. "We are likely to increase our dependence on just those very countries we all worry about," said William Koetzle, senior vice president of public policy at the Institute for Energy Research, a think tank that promotes free-market solutions. "If you create disincentives for the use of Canadian oil, it'll have to be replaced with oil from another place, and that probably means oil from OPEC."
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
26
Link—LCFS LCFS discourages the switch to Canadian oil shales and tar sands and forces mid-East dependence. Washington Post 08 (Stephen Dinan “McCain Oil Plan Relies on Middle East”, June 20 http://www.washtimes.com/news/2008/jun/20/mccain-oil-plan-fosters-reliance-on-middle-east/?page=2) Sen. John McCain caps his weeklong push for U.S. energy independence with a trip Friday to Canada, but his own environmental plan discourages use of Canadian oil and drastically increases American reliance on oil from the Middle East and other potentially unfriendly places. The presumed Republican presidential nominee called last year to expand California's low carbon fuel standard, which measures the amount of greenhouse gases needed to produce fuel and punishes use of "dirty" heavy crude oil in favor of conventional light crude or alternative fuels. Expanding that plan nationwide would force U.S. refiners to buy less American and Canadian oil - which come increasingly from dirty sources like shale and tar sands - and instead use more oil from the Middle East. "We are likely to increase our dependence on just those very countries we all worry about," said William Koetzle, senior vice president of public policy at the Institute for Energy Research, a think tank that promotes free-market solutions. "If you create disincentives for the use of Canadian oil, it'll have to be replaced with oil from another place, and that probably means oil from OPEC." Mr. McCain, who just this week praised Canada as a secure source of oil, embraced a national fuel standard plan last year at a press conference with California Gov. Arnold Schwarzenegger. Mr. McCain has made his support for environmental issues a major part of his presidential campaign, and uses it as a key issue where he breaks with many other Republicans. McCain campaign spokesman Brian Rogers responded with the following statement late last night: "The concept behind California's LowCarbon Fuel Standard is to use less oil in our transportation sector. Canada joined in to this agreement self-imposing emissions standards on the extracting of their oil resources. Ultimately, an international cap and trade system will allow us to regularize the system by which countries offset and reduce their emissions, but in the short term we should look for a cleaner and more efficient way to extra to oil resources from the tar sands." The senator from Arizona has been outspoken about the need to end dependence on oil from dangerous places, but he is not the only one to embrace expanding California's standard nationwide. Sen. Barack Obama, the likely Democratic presidential nominee, last year introduced a bill in the Senate to do just that. "Beginning in 2010, we will require petroleum makers to reduce the carbon content of their fuel mix 1 percent per year by selling more clean, alternative fuels in its place," Mr. Obama told the Detroit Economic Club in May 2007. "This proposal will spur greater production and availability of renewable fuels like cellulosic ethanol and biodiesel, and it will even create an incentive for the production of more flexible-fuel and plug-in hybrid vehicles that can use these clean fuels or charge up with renewable electricity." A low carbon fuel standard looks at the entire greenhouse gas emissions it takes to drill for, transport and use fuel, known as a wells-to-wheels analysis. By that measure, heavy crude taken from Canada's tar sands or oil shale in the U.S. are judged worse than conventional light crude, which is easy to tap and bring to market. Canadian crude accounted for 18.7 percent of U.S. imports in March, which was the highest foreign source. That is expected to grow to beyond 35 percent, according to an estimate from Mr. Koetzle's group, unless a national fuel standard is created.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
27
Link—LCFS LCFS destroys oil refining capacity Koetzle, 05 (William Koetzle, Ph.D. Senior Vice President of Public Policy at the Institute for Energy Research. “IER Rebuttal to Boucher White Paper” http://www.instituteforenergyresearch.org/2008/04/13/ier-rebuttal-to-boucher-whitepaper/) Obviously the production of oil sands is more difficult than that of traditional petroleum. The production, extraction, separation, and upgrading the bitumen of oil sands requires significantly more energy than that of conventional oil.[36] Because of the greater energy used to produce these resources, the lifecycle GHG emissions from oil sands is greater than that of conventional oil. Estimates of the increase in lifecycle emissions range from 14-70%.[37] State low carbon fuel standards and/or prohibitions against using transportation fuels produced from “non-conventional” sources, therefore, have the potential to negatively impact Canadian oil imports and the United States’ energy security. For example, in the case of a low carbon fuel standard, fuel producers could achieve significant global warming intensity reductions by fuel switching from sources like Canadian oil sands to conventional petroleum products. This generates the perverse outcome whereby the United States ends up importing more petroleum from unsecure foreign sources such as western Africa and the Middle East; while, at the same time, doing nothing to reduce GHG emissions on a net basis, since the Canadian oil will simply flow to other markets such as China.[38] Obviously such an outcome is a negative viewed either through the prism of a GHG emission reduction program or for our energy security. Language like that contained in Section 526 of P.L. 110-140 is similarly suspect from a GHG emission reduction and/or energy security perspective. A plain reading of the language - “No Federal agency shall enter into a contract for procurement of an alternative or synthetic fuel, including a fuel produced from nonconventional petroleum sources, for any mobility-related use” - could be read in such a way that an agency of the federal government, the Department of Defense for example, may not be able enter into a contract to purchase oil from a refinery that uses Canadian oil sands. Again, this makes little sense from a GHG perspective - this oil will be consumed by the world market - and makes no sense for America’s long term energy security since most of the world’s conventional reserves of oil are located in unsecure regions. In fact, this language has generated significant concern within the Canadian government. Recently, Canada’s ambassador to the United States, Michael Wilson, wrote to Secretary of Defence Robert Gates about Section 526 arguing that “there is little fuel on the U.S. market that is 100% petroleum extracted only by conventional methodology” and that interpreting Section 526 to apply to all commercially-available fuel made in part from nonconventional petroleum could exclude all fuel commercially available in the United States from being eligible for purchase by the United States government.” This would result in the United States being seen as “preferring off-shore crude from other countries over fuel made in part from United States and Canadian sources.” [39] Beyond just an impact on Canadian oil, however, such initiatives imperil technological innovations designed to increase the productivity of existing oil wells in the United States as well. Enhanced Oil Recovery (EOR) are methods by which the additional reserves from existing fields can be produced; with the potential to increase the recovery of oil from these reservoirs to a rate as high as 60%.[40] These methods fall into the “unconventional” category in that they involve the use of additional steps (such as the introduction of heat in thermal recovery) and extraction efforts. One such method, CO2 injection, which uses the pressure of gas to push more oil to the well bore, is supported by DOE research[41] as both a way to increase the productivity of existing American oil fields and as a way to capture and sequester CO2. Employing EOR technology, such as CO2 injection, could increase the recoverable reserves of the United State by as much as 20 billion barrels.[42] Like oil sands, however, EOR is both unconventional and may have a slightly higher lifecycle emissions profile then conventional oil (some estimate that EOR emissions are between 2 and 19% higher).[43] This could produce the perverse outcome whereby the United States Government, following the prohibition found in Sec. 526 of P.L. 110-140, would be prevented from entering into a contract to purchase American-produced oil that was the product of American government funded research. Such an outcome makes little sense from an environmental or energy policy perspective. These examples underscore the more general point that actions which attempt to reduce GHG emissions that do not include the participation by all significant emitters, or that is blind to other considerations such as energy security, are likely to result in outcomes that do not serve the stated aim to stabilize global concentrations of greenhouse gases. In the examples here, the “best” result of such programs merely shifts emissions to other parts of the globe; the “worst: result is that it makes the United States more dependent on un-secure sources of foreign energy.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
28
Link—LCFS LCFS discourages the switch to Canadian oil shales and tar sands and forces mid-East dependence. Washington Post 08 (Stephen Dinan “McCain Oil Plan Relies on Middle East”, June 20 http://www.washtimes.com/news/2008/jun/20/mccain-oil-plan-fosters-reliance-on-middle-east/?page=2) Sen. John McCain caps his weeklong push for U.S. energy independence with a trip Friday to Canada, but his own environmental plan discourages use of Canadian oil and drastically increases American reliance on oil from the Middle East and other potentially unfriendly places. The presumed Republican presidential nominee called last year to expand California's low carbon fuel standard, which measures the amount of greenhouse gases needed to produce fuel and punishes use of "dirty" heavy crude oil in favor of conventional light crude or alternative fuels. Expanding that plan nationwide would force U.S. refiners to buy less American and Canadian oil - which come increasingly from dirty sources like shale and tar sands - and instead use more oil from the Middle East. "We are likely to increase our dependence on just those very countries we all worry about," said William Koetzle, senior vice president of public policy at the Institute for Energy Research, a think tank that promotes free-market solutions. "If you create disincentives for the use of Canadian oil, it'll have to be replaced with oil from another place, and that probably means oil from OPEC." Mr. McCain, who just this week praised Canada as a secure source of oil, embraced a national fuel standard plan last year at a press conference with California Gov. Arnold Schwarzenegger. Mr. McCain has made his support for environmental issues a major part of his presidential campaign, and uses it as a key issue where he breaks with many other Republicans. McCain campaign spokesman Brian Rogers responded with the following statement late last night: "The concept behind California's Low-Carbon Fuel Standard is to use less oil in our transportation sector. Canada joined in to this agreement self-imposing emissions standards on the extracting of their oil resources. Ultimately, an international cap and trade system will allow us to regularize the system by which countries offset and reduce their emissions, but in the short term we should look for a cleaner and more efficient way to extra to oil resources from the tar sands." The senator from Arizona has been outspoken about the need to end dependence on oil from dangerous places, but he is not the only one to embrace expanding California's standard nationwide. Sen. Barack Obama, the likely Democratic presidential nominee, last year introduced a bill in the Senate to do just that. "Beginning in 2010, we will require petroleum makers to reduce the carbon content of their fuel mix 1 percent per year by selling more clean, alternative fuels in its place," Mr. Obama told the Detroit Economic Club in May 2007. "This proposal will spur greater production and availability of renewable fuels like cellulosic ethanol and biodiesel, and it will even create an incentive for the production of more flexible-fuel and plug-in hybrid vehicles that can use these
A low carbon fuel standard looks at the entire greenhouse gas emissions it takes to drill for, transport and use fuel, known as a wells-to-wheels analysis. By that measure, heavy crude taken from Canada's tar sands or oil shale in the U.S. are judged worse than conventional light crude, which is easy to tap and bring to market. Canadian crude accounted for 18.7 percent of U.S. imports in March, which was the highest foreign source. That is expected to grow to beyond 35 percent, according to an estimate from Mr. Koetzle's group, unless a national fuel standard is created. clean fuels or charge up with renewable electricity."
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
29
Link—LCFS Tar sands are inevitable – it’s only a question of whether they’re used by the US or China. LCFS would ban them in the U.S. Perry, 8 (Mark Perry, professor of finance and economics at the Flint campus of the University of Michigan. 3-30-08. “The tar sands solution” http://www.pittsburghlive.com/x/pittsburghtrib/opinion/columnists/guests/s_559662.html? source=rss&feed=5) The tar sands hold an estimated 174 billion barrels of crude oil, making Canada's oil-sands deposits second only to Saudi Arabia in global reserves. The United States currently obtains 1 million barrels a day from Canada's tar sands. But with planned investments the daily supply could exceed 3 million barrels by 2015. But extracting heavy oil from tar sands and transporting it by pipeline for refining is a difficult and costly process. Producers are developing new drilling techniques to reduce the large volumes of natural gas and water needed to separate the oil from sand. And the oil companies, which have pledged to reduce greenhouse emissions in their operations, are making the needed investments to meet environmental regulations. Yet the greenhouse-gas issue overshadows all other considerations. The challenge is how to produce and refine enough oil to meet rising energy demand while mitigating carbon-dioxide emissions. Refiners have set a goal to improve energy efficiency 10 percent over the next decade. And one way they are making progress is by capturing excess heat from their operations to produce additional electricity. An indication of change is the way oil companies now see unconventional sources of oil like tar sands. Refineries throughout the Midwest and Gulf Coast are being retrofitted to accommodate the heavier oil. And companies are investing larger sums than ever in developing new technologies to reduce airborne and water emissions. Even though the companies are confident they can meet environmental requirements, opponents are determined to block the necessary permits. If our refineries can't take advantage of this secure source of oil from tar sands, other countries -- notably China -- will move in. We need no reminders of what this could mean -- given the economic beating we took when oil supplies were scarce in the 1970s. Today, oil imports from overseas cost U.S. consumers more than $200 billion a year and are responsible for a large share of our trade deficit. Given these facts, you'd think our political leaders would insist on a long-term commitment to shore up oil production and refining in North America. But that hasn't happened. Although President Bush has publicly welcomed production of Canadian tar sands oil, Congress last year passed legislation that prohibits the government from using alternative fuels that have a larger carbon footprint than conventional oil. As a result, the U.S. Defense Department is unable to use jet fuel made from tar sands oil even though greenhouse gas-emissions per barrel of tar sands oil have fallen 32 percent since 1990. Now California is moving to disallow the use of tar sands oil under a recently approved low-carbon fuels standard sought by environmental groups, and Illinois is among a dozen states also considering such a standard.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
30
Link—ethanol An increased use of ethanol directly decreases the need for oil refineries Doggett 07 – (Tom - ,staff writer, signonsandiego.com, The Associated Press, “US Law to Spur new refineries a bust so far,” June 15, http://www.signonsandiego.com/news/business/20070615-1058-usa-refineries-law.html) Both the Bush administration and Congress are pushing for more production of ethanol and other alternative fuels over the next decade that would reduce gasoline consumption. That's causing companies to rethink the need for expanding refineries, much less considering building new ones, according to the industry's main trade group, the National Petrochemical and Refiners Association. “Look at the conflicting messages we're getting from policy makers,” said NPRA spokesman Bill Holbrook. “You're going to stop and consider what investments you're going to make ... to continue making a product (like gasoline) that some are trying to limit distribution of,” he said. Ethanol expansion kills refinery investments. Chemical News & Intelligence, 07 (US refiners warn Congress on ethanol mandates, July, 31, lexis) On the production side, Drevna said a new and massive congressional mandate for ethanol production could undermine US gasoline supplies. He cited the Bush administration's [3]call for 35bn gal/year of biofuels production by 2017 as part of a plan to reduce US gasoline consumption by 20%. The [4]Department of Energy forecasts that US gasoline demand that year will be 161bn gallons, he noted. A 20% reduction would mean only 129bn gallons of demand. With current US gasoline production at 136bngal/year, he said US gasoline production is already in excess of the forecast 2017 demand - if the biofuels mandate is met. "It should be clearly understood that requirements to substantially increase the volume of ethanol and other renewables could essentially supplant a significant portion of the need and desire for additional domestic refining capacity," Drevna said. "The domestic refining industry is likely to look upon rapidly rising ethanol and other biofuels requirements in the coming years as adding significantly more risk to investment in capacity expansions," he said. He warned that additional congressional mandates for ethanol output will pressure domestic and foreign refiners to reconsider investments in new capacity. Increasing ethanol and biofuel production will decrease refining capacity New York Times 07 [Jad Mouawad, “Oil Industry Says Biofuel Push May Hurt at Pump, May 24, http://www.nytimes.com/2007/05/24/business/24refinery.html?_r=2&hp=&adxnnl=1&oref=slogin&adxnnlx=1214859293oNJACe+eWBfqa52WB51Pvw] In his State of the Union address in January, President Bush called for a sharp increase in the use of biofuels, along with some improvement in automobile fuel efficiency to reduce America’s use of gasoline by 20 percent within 10 years. Congress is considering legislation calling for a nearly fivefold increase in the use of ethanol. That has forced many oil companies to reconsider or scale back their plans for constructing new refinery capacity. In hearings before Congress last year, oil executives outlined plans to increase fuel production by expanding existing refineries. Those plans would add capacity of 1.6 million to 1.8 million barrels a day over the next five years, for an increase of 10 percent, according to the National Petrochemical and Refiners Association. But those plans have since been scaled back to more than one million barrels a day, according to the Energy Information Administration, an arm of the federal government. “If the national policy of the country is to push for dramatic increases in the biofuels industry, this is a disincentive for those making investment decisions on expanding capacity in oil products and refining,” said John D. Hofmeister, the president of the Shell Oil Company. “Industrywide, this will have an impact.” The concerns were echoed in a recent report by Barclays Capital, which said the uncertainty about the ethanol growth “will do little to accelerate desperately needed investment in complex United States refining units.”
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
31
Link—ethanol Increases in ethanol prevents future refinery expansions Hebert, 8 (H. Josef, Associated Press Writer, Oil Industry Scales Back Refinery Plans, June 17, lexis) WASHINGTON (AP) -- A push from Congress and the White House for huge increases in biofuels, such as ethanol, is prompting the oil industry to scale back its plans for refinery expansions. That could keep gasoline prices high, possibly for years to come. With President Bush calling for a 20 percent drop in gasoline use and the Senate now debating legislation for huge increases in ethanol production, oil companies see growing uncertainty about future gasoline demand and little need to expand refineries or build new ones. Oil industry executives no longer believe there will be the demand for gasoline over the next decade to warrant the billions of dollars in refinery expansions -- as much as 10 percent increase in new refining capacity -- they anticipated as recently as a year ago. Biofuels such as ethanol and efforts to get automakers to build more fuel-efficient cars and SUVs have been portrayed as key to countering high gasoline prices, but they are likely to do little to curb costs at the pump today, or in the years ahead as refiners reduce gasoline production. Legislations pushing ethanol is expected to cut back refining capacity Hebert, 8 (H. Josef, Associated Press Writer, Oil Industry Scales Back Refinery Plans, June 17, lexis) Only last year, the Energy Department was told that refiners, reaping big profits and anticipating growing demand, were looking at boosting their refining capacity by more than 1.6 million barrels a day, a roughly 10 percent increase. That would be enough to produce an additional 37 million gallons of gasoline daily. But oil companies already have scaled those expansion plans back by nearly 40 percent. More cancelations are expected if Congress passes legislation now before the Senate calling for 15 billion gallons of ethanol use annually by 2015 and more than double that by 2022, say industry and government officials. "These (expansion) decisions are being revisited in boardrooms across the refining sector," said Charlie Drevna, executive vice president of the National Petrochemical and Refiners Association. With the anticipated growth in biofuels, "you're getting down to needing little or no additional gasoline production" above what is being made today, said Joanne Shore, an analyst for the government's Energy Information Administration. Although plans for new refineries are viable now, new ethanol legislation will destroy them Reed Business 07 (written by staff, June 7, purchasing.com, “Ethanol supply glut in second half could depend on logistics capacity,” http://www.purchasing.com/article/CA6458591.html) Another major question mark in the energy supply chain will be how the increased use and supply of ethanol impacts the number and capacity of oil refineries in the U.S. and, eventually, the price of gas. There are some plans for new oil refineries (see sidebar) in the U.S. Some analysts feel that plans for any increase in refinery capacity may be in question—for better or worse. The Associated Press reports that "Oil industry executives no longer believe there will be the demand for gasoline over the next decade to warrant the billions of dollars in refinery expansions—as much as 10% increase in new refining capacity—they anticipated as recently as a year ago." In the past year (including President Bush's now-famous call for ethanol in his State of the Union), oil companies have scaled back refinery expansion plans by nearly 40% with more cancellations expected if Congress passes legislation now before the Sensate calling for 15 billion gallons of ethanol use by 2015 and more than double that by 2022, say industry and government officials. With the anticipated growth in biofuels, "you're getting down to needing little or no additional gasoline production," Joanne Shore, an analyst for the government's Energy Information Administration told the Associated Press. In the same report, Chevron Corp. vice chairman Peter Robertson said the energy giant is reviewing its long-term refinery plans. "Why would I invest in a refinery when [the Government] is trying to make 20% of the gasoline supply ethanol?" On the other side, Ron Lamberty of the American Coalition for Ethanol, tells the AP that all the talk about biofuels threatening gasoline production is the "latest attempt to blame ethanol on Big Oil's failure to meet our energy needs."
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
32
Link—ethanol Ethanol Legislation will stop refinery expansion The Associated Press 07 – (by staff, June 17, “Ethanol could keep the price of gas high,” http://www.msnbc.msn.com/id/19276523/) “The fact is that Americans are paying more at the pump because we do not have the domestic capacity to refine the fuels consumers demand,” Inhofe complained as he tried unsuccessfully to get into the bill a proposal to ease permitting and environmental rules for refineries. This spring, refiners, hampered by outages, could not keep up with demand and imports were down because of greater fuel demand in Europe and elsewhere. Despite stable — even sometimes declining — oil prices, gasoline prices soared to record levels and remain well above $3 a gallon. Consumer advocates maintain the oil industry likes it that way. “By creating a situation of extremely tight supply, the oil companies gain control over price at the wholesale level,” said Mark Cooper of the Consumer Federation of America. He argued that a wave of mergers in recent years created a refining industry that “has no interest in creating spare (refining) capacity.” Only last year, the Energy Department was told that refiners, reaping big profits and anticipating growing demand, were looking at boosting their refining capacity by more than 1.6 million barrels a day, a roughly 10 percent increase. That would be enough to produce an additional 37 million gallons of gasoline daily. But oil companies already have scaled those expansion plans back by nearly 40 percent. More cancellations are expected if Congress passes legislation now before the Senate calling for 15 billion gallons of ethanol use by 2015 and more than double that by 2022, say industry and government officials. Ethanol directly trades off with oil RFA 5 – (The reneable fuels association, google, http://www.ethanolrfa.org/resource/facts/energy/) The United States is increasingly dependent on imported energy to meet our personal, transportation, and industrial needs. With the rise of oil prices above $100 a barrel, the impact of our dependence on imported oil takes on greater importance. As a domestic, renewable source of energy, ethanol can reduce our dependence on foreign oil and increase the United States' ability to control its own security and economic future by increasing the availability of domestic fuel supplies. By displacing hundreds of millions of barrels of imported oil, the increasing reliance on domestically-produced ethanol is making available billions of dollars for investment in domestic renewable energy technologies.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
33
Link—oil vouchers Oil Vouchers decrease the amount of oil consumed. Feldstein 01 – (Martian - Professor of Economics, Harvard University, and President of the National Bureau of Economic Research, National Interest, “Oil Dependence and National Security: A Market-based System for Reducing U.S. Vulnerability,” http://www.nber.org/feldstein/oil.html#N_1_) A rough guess is that the value of a voucher might be about 75 cents in the first year. If the household that receives 1,000 OCVs wishes to drive 25,000 miles with a fuel efficiency of 20 miles per gallon it will need to purchase an additional 250 vouchers at a cost of about $190. Conversely, if the household that receives 1000 OCVs only wants to purchase 800 gallons of gasoline, it will be able to sell its 200 excess vouchers for $150. Although these cash amounts are not large, the voucher system creates the right incentives because each individual recognizes that the cost of another gallon of gas is both the approximately $1.30 that he pays for the gasoline and the 75 cents that the voucher is worth. The same is true for both someone who needs to buy vouchers for 75 cents and for someone with excess vouchers that he could sell for 75 cents. Achieving the same 43 billion gallon reduction in gasoline consumption by a 75 cent a gallon gasoline tax would cost the average American household about $750 a year in higher taxes and produce revenue of about $100 billion a year. Moreover, since the 75 cent value of the voucher is just an estimate, there is no guarantee that a 75 cent tax would even achieve the desired reduction. And just as the price of the voucher is likely to come down (unless the number of vouchers is reduced) as individuals shift to more fuel efficient cars, the gasoline tax would also have to be adjusted over time, making it even less likely that the policy would achieve its desired goal. The voucher system would automatically limit consumption to the desired amount and would do so in a way that gives every gasoline buyer the same incentive to conserve gasoline. (6) Since higher income households generally consume more gasoline than lower income households, the likely effect of the OCVS system would be to make higher income households buyers of vouchers while lower income households were net sellers. The most recent available data (for 1994) show that households with income below $15,000 consumed about 700 gallons of gasoline per year while those with income over $35,000 consumed an average of about 1250 gallons per year. With a distribution of 750 OCVs per household (about 25 percent less than average current consumption), the lower income households would receive about $170 from selling vouchers while the higher income households would pay an extra $150 to buy vouchers (7).
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
34
Link—carbon tax A carbon tax would discourage the production of oil from tar sands Carbon Tax Center 07 [Danial Rosenblum, “A Carbon Tax When Oil Approaches $100/Barrel?” 11/9, http://www.carbontax.org/blogarchives/2007/11/09/a-carbon-tax-when-oil-approaches-100barrel/] In addition, high oil prices encourage the development of new sources of energy with huge carbon dioxide emissions such as the Alberta oil sands projects. Tar sands development is the single largest contributor to the increase in climate change in Canada according to Greenpeace Canada. Even worse, according to a study by the Sage Centre and World Wildlife FundCanada, "voracious water consumption by Alberta's oilsands threatens the quality and quantity of water available to Saskatchewan and the Northwest Territories through the Mackenzie River system." In fact, today's New York Times cites a new study finding that "[h]igh levels of carcinogens have been found in fish, water and sediment downstream from Alberta's huge oil sands projects." A carbon tax would reduce the economic incentive for such projects by holding down the price of oil. A carbon tax actually applied to such projects would destroy their economics.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
35
Link—carbon caps/cap and trade Carbon caps would lead to a reduction in refining capacity LA Business Journal 06 [Howard Fine, “Greenhouse gas bill noxious to business” July 31, http://findarticles.com/p/articles/mi_m5072/is_31_28/ai_n16676289] Even though momentum is building for action to curb global warming, major business groups and local businesses are lining up against legislation in Sacramento that would place caps on industrial greenhouse gas emissions. The flashpoint for businesses is AB 32, by Assembly Speaker Fabian Nunez, D-Los Angeles, and Assemblywoman Fran Pavley, D-Agoura Hills, which would make California the first state to adopt the Kyoto Accord by requiring businesses to reduce emissions of greenhouse gases primarily carbon-based chemicals--to 1990 levels by the year 2020. Oil companies, electric power utilities, cement makers, chemical and steel plants and food processors would all be hit hard by greenhouse gas caps and have formed a coalition aimed at derailing the bill in the closing weeks of the legislative session. These industries say the bill would hike energy costs and force carbon emitters to cut production or move out of state. "It's already a challenge for manufacturers to grow and hire new employees in California because of high energy costs. The last thing we need is another onerous regulation that will push energy costs even higher and convince companies to take their jobs elsewhere," said Jack Stewart, president of the California Manufacturers and Technology Association. Among the Los Angeles-area facilities hardest hit would be the eight refineries in the South Bay and harbor areas, electric power plants throughout the region and cement manufacturing plants. Take the Western States Petroleum Association, which counts six L.A. County refineries among its membership--including BP plc.'s Carson refinery and Chevron Corp.'s El Segundo refinery. "If these caps are imposed, refineries would have to reduce production 17 percent to get back to 1990 carbon emission levels," said Joe Sparano, president of the association. "That's the equivalent of shutting down three average-sized refineries each producing 100,000 barrels per day of refined product." Cap and trade will decrease refineries for oil, natural gas Samuelson 08 [Robert J. Washington Post Writers Group- “The global warming solution favored by environmentalists would raise energy costs” June 2] Carbon-based fuels (oil, coal, natural gas) provide about 85 percent of U.S. energy and generate most greenhouse gases. So, the simplest way to stop these emissions is to regulate them out of existence. Naturally, that's what cap-and-trade does. Companies could emit greenhouse gases only if they had annual "allowances" -- quotas -- issued by the government. The allowances would gradually decline. That's the "cap." Companies (utilities, oil refineries) that needed extra allowances could buy them from companies willing to sell. That's the "trade." In one bill, the 2030 cap on greenhouse gases would be 35 percent below the 2005 level and 44 percent below the level projected without any restrictions. By 2050, U.S. greenhouse gases would be rapidly vanishing. Even better, their disappearance would allegedly be painless. Reviewing five economic models, the Environmental Defense Fund asserts that the cuts can be achieved "without significant adverse consequences to the economy." Fuel prices would rise, but because people would use less energy, the impact on household budgets would be modest. This is mostly make-believe. If we suppress emissions, we also suppress today's energy sources, and because the economy needs energy, we suppress the economy. The models magically assume smooth transitions. If coal is reduced, then conservation or non-fossil-fuel sources will take its place. But in the real world, if coal-fired power plants are canceled (as many were last year), wind or nuclear won't automatically substitute. If the supply of electricity doesn't keep pace with demand, brownouts or blackouts will result. The models don't predict real-world consequences. Of course, they didn't forecast $135-a-barrel oil.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
36
Link—perception Our link is immediate: the plan immediately destroys investor confidence in refineries Drevna, 08 - President National Petrochemical and Refiners Association (Charles, CAPITOL HILL HEARING TESTIMONY, 5/6, CQ Congressional Testimony, lexis) Refinery Capacity Expansion Projects. It should be clearly understood that requirements to substantially increase the volume of ethanol and other renewables will essentially supplant a significant portion of the need/desire for additional domestic refining capacity. Refiners must make investments today on what they believe to be the longer- term (10-15 years or more) outlook. The domestic refining industry is likely to look upon rapidly rising ethanol and other bio-fuels requirements in the coming years as adding significant more risk to investments in capacity expansions. As recently as 2006, the Department of Energy (DOE) forecast that domestic refiners were likely to add 1.5 million barrels per day of capacity between 2006-2010. Based upon perceptions of renewable market developments - developments being stoked by administration and congressional actions - current estimates suggest that expansion in the domestic refining is likely to be constrained well below 1 million barrels per day. These decisions are being re-visited in boardrooms across the refining sector as the anticipated surge in ethanol requirements/mandates in the coming years will pressure domestic, and undoubtedly some foreign refiners currently supply the U.S. market to postpone or cancel new investments in petroleum refining capability.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
37
Xtn—oil shocks=depression An oil shock would cause global economic depression and war with Iran Long, 6 – Stephen, ABC Transcripts Australia, 8/3/06, “Rising oil prices could cause global recession” Lexis ELEANOR HALL: The Prime Minister John Howard has described fuel prices as the greatest worry of his political life. And his stress levels may soon reach an extreme state if the predictions of a respected US economist come true. Speaking in Sydney today, Standard and Poor's New York-based chief economist David Wyss, warned today that there's a real possibility that a new World Oil Shock could cause a deep global recession if a war against Iran shut down Middle East oil supplies. Traders in the futures markets are making bets on that possibility, with economists warning a war could send the oil price skyrocketing as high as $US 250 a barrel. But there's better news today on petrol pricing in Australia from the consumer watchdog the ACCC. It has found that accusations that the petrol industry here has colluded to fix prices are unfounded. And today the ACCC has set aside those accusations saying if anything the industry is more competitive than it was a few years ago. Economics Correspondent Stephen Long has our story. STEPHEN LONG: In Canberra today, the petrol price inquiry was looking at the little picture - movements of a few cents in the price of petrol at the bowser. With Coles and Woolies now dominating distribution, critics have talked of collusion and price gouging, based on the strange coincidence of prices going up by identical sums in any given area on a given day. And price hikes coinciding with long weekends. But the ACCC's cartel busters see it differently. This is what ACCC chief executive Brian Cassidy said in answer to a question from Labor's Senator Kerry O'Brien. BRIAN CASSIDY: It seems to us that basically the retail petrol market is a competitive one. Indeed, it's probably become more competitive in recent times with the entry of Woolworths and Shell. And we've been able to track, as Woolworths and Shell have entered the market in different regions, that relative to the import price indicator, there's been reductions in the retail price of between half a cent and 3 cents a litre. STEPHEN LONG: In Sydney today,
economists were musing on the big picture, and the possibility of a supply shock that could spell disaster. David Wyss is the global chief economist for the ratings agency, Standard and Poors. He told a morning conference that we're less dependent on oil than we used to be, and only represents about a third of all energy production compared to nearly half during the 1971 oil shock. But... DAVID WYSS: That doesn't, however, mean that oil can't cause a recession. It just means the price has to go higher to cause a recession than it used to. And the potential for that to happen is unfortunately very real. If Iran not only goes out of production itself, but takes the Strait of Hormuz with it, then you're looking at shortfalls in the 20 million barrel range, probably oil prices above $250 a barrel and a pretty deep world recession. That's our scare scenario. And your guess is as good as mine as to what's going to happen out there. Strikes on Iran will include nuclear weapons—using them will lower the threshold for nuclear use snowballing to extinction. Hirsch, 6 – Jorge, Professor of Physics at the University of California at San Diego, 10/16/2006. “Nuclear Strike on Iran Is Still on the Agenda What will Congress do?” http://www.antiwar.com/orig/hirsch.php?articleid=9868. The Bush administration has radically redefined America's nuclear use policy [1], [2]: U.S. nuclear weapons are no longer regarded as qualitatively different from conventional weapons. Many actions of the administration in recent years strongly suggest that an imminent U.S. nuclear use is being planned for, and this was confirmed by Bush's explicit refusal to rule out a U.S. nuclear strike against Iran. We have all been put on notice. The fact that North Korea is now a nuclear country does not change the agenda – quite the contrary. There were fears that the U.S. would use nuclear weapons in the Iraq attack [1], [2], fears that did not materialize. Hence some will argue that the current fears of a nuclear strike against Iran may not materialize either. Some will argue that there were many other occasions in the past 60 years when the U.S. appeared to come close to using nuclear weapons and did not [1], [2], that the threshold for using nuclear weapons always was and remains extraordinarily high, and that the nuclear "saber-rattling" is just trickery to scare our opponents ( "madman theory"). These arguments are wrong. The U.S. is closer than it has been since Nagasaki to using nuclear weapons again. This year, for the first time in its history, the American Physical Society, representing 40,000 members of the profession that created nuclear weapons, issued a statement of deep concern on this matter: "The American Physical Society is deeply concerned about the possible use of nuclear weapons against non-nuclearweapon states and for preemptive counter-proliferation purposes." In the case of Iraq, our adversary was so weak that there was no way the use of nuclear weapons could have been justified in the eyes of the world. Iran is different: it possesses missiles that could strike U.S. forces in Iraq and the Persian Gulf, as well as Israeli cities. Iran also has a large conventional army. The 150,000 U.S. soldiers in Iraq will be at great risk if there is a war with Iran, and Americans will support a nuclear strike on Iran once the administration creates a situation where it can argue that such action will save a large number of American lives. In previous U.S. wars, nuclear weapons were not used because of an unacceptably high risk of triggering a nuclear conflict with the Soviet Union or China [1], [2], [3]. Because North Korea appears to have a nuclear deterrent, and because of the risk that China could get involved, there is no danger that the U.S. will attack North Korea. In fact, Bush will use the fact that North Korea has joined the nuclear club, and charges that he was not "tough enough" on North Korea, as justification for attacking Iran before it too joins the club. Never mind the fact that, unlike North Korea, Iran has stated no intention to follow that path, nor is there any evidence that it is doing so. The nuclearization of North Korea will be used by the administration as an argument for nuking Iran, which may be why the administration did everything it could to encourage it. No nuclear country is likely to intervene when the U.S. uses
nuclear weapons against Iran, so there is no military deterrent. The U.S. has now achieved vast nuclear superiority and is about to demonstrate to the world that its $5 trillion nuclear arsenal is not "unusable." It is ignoring the fact that crossing the
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
38
nuclear threshold in a war against Iran will trigger a chain reaction that in the coming years could lead to global nuclear war and widespread destruction of life on the planet.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
39
Xtn—oil shocks=nuke war Major oil shocks would plunge the world into nuclear war. Lauria 08 – (Joe - New York-based investigative journalist. A freelance member of the Sunday Times of London Insight team, he has also worked on investigations for the Boston Globe and Bloomberg News., The Huffington Post, April 14, “The Coming War with Iran: It’s About the Oil, Stupid,” http://www.commondreams.org/archive/2008/04/14/8282/) The Saudis would not mind seeing the Iranian regime go. But the Saudis may also be on the list. The US may have to destabilize and control Saudi Arabia some day too. The Wall Street Journal a few years ago revealed that in the 1970s under Nixon, Kissinger had plans drawn up for the US invasion and occupation of the Saudi oil fields. Those plans can be dusted off. The American oil wars are being launched out of weakness, not strength. The American economy is teetering and without control of the remaining oil it will collapse. There will be massive chaos in any case, when only enough oil remains for the American elite and whomever they choose to share it with. That will leave an oil-starved China and India, both with nuclear weapons, with no alternative but to bow to America or go to war. It’s not about greed any more. It’s about survival. Because the leadership of this country was initially too greedy to switch from oil to solar, wind, geothermal and other renewable alternatives, it may now be too late. Had the hundreds of billions of dollars poured into the invasion and occupation of Iraq been put into alternative energy the world might have had a fighting chance. Now that is far from certain. What is certain is that these wars are not about democracy. They are not about WMD. The coming one will not even be about Iran’s nuclear weapons project. It’s about the oil, stupid.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
40
2nc—oil shocks bad—Iran Oil shocks could cause an Iranian-Israeli nuclear conflict and global recession Woods, 8 – Richard, Staff Writer, 6/15, the Sunday Times—London, “Oil, housing, food and finance: the best and worst case scenarios for the crucial” Lexis Worst case: In a pre-emptive strike, Israel attacks Iranian military facilities to prevent it building a nuclear bomb. Iran retaliates, threatening wider conflict in the Middle East. The ensuing panic about disrupted oil supplies drives the price way above $200 a barrel. Industry and business, hammered by higher costs, retrench and lay off thousands of workers. Consumers in many countries face the double whammy of higher prices and economic slowdown. As consumers cut their spending, asset prices collapse further. Millions suffer negative equity. Living standards fall. A global recession unfolds. That would cause World War 3. Leonid Ivashov, analyst at the Strategic Culture Foundation, 4/21/2007. “Iran: the Threat of a Nuclear War,” http://www.megachip.info/modules.php?name=Sections&op=viewarticle&artid=3871.
What might cause the force major event of the required scale? Everything seems to indicate that Israel will be sacrificed. Its involvement in a war with Iran - especially in a nuclear war - is bound to trigger a global catastrophe. The statehoods of Israel and Iran are
based on the countries' official religions. A military conflict between Israel and Iran will immediately evolve into a religious one, a conflict between Judaism and Islam. Due to the presence of numerous Jewish and Muslim populations in the developed countries, this would make a global bloodbath inevitable. All of the active forces of most of the countries of the world would end up fighting, with almost no room for neutrality left. Judging by the increasingly massive acquisitions of the residential housing for the Israeli citizens, especially in Russia and Ukraine , a lot of people already have an idea of what the future holds. However, it is hard to imagine a quiet heaven where one might hide from the coming doom. Forecasts of the territorial distribution of the fighting, the quantities and the efficiency of the armaments involved, the profound character of the underlying roots of the conflict and the severity of the religious strife all leave no doubt that this clash will be in all respects much more nightmarish than WWII.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
41
2nc Trade Deficit Impact Canadian oil will inevitably enter the market—the question is whether the US or China gets there first—US control will comply with environmental regulations better and prevent a trade deficit Perry, 08 - professor of finance and economics at the Flint campus of the University of Michigan (Mark, Tulsa World (Oklahoma), "Or is using tar sands oil vital for U.S.?", 3/30, lexis) FLINT, Mich. -- At a time when saying anything good about fossil fuels is like declaring war on the environment, it may seem like wishful thinking to press for an expansion of U.S. oil refining capacity. Yet it is precisely this sort of thinking that is necessary if we are to make use of a vast, secure and reliable supply of fuel from Canada's oil sands. The tar sands hold an estimated 174 billion barrels of crude oil, making Canada's oil-sands deposits second only to Saudi Arabia in global reserves. The United States currently obtains 1 million barrels a day from Canada's tar sands, but with planned investments the daily supply could exceed 3 million barrels by 2015. But extracting heavy oil from tar sands and transporting it by pipeline for refining is a difficult and costly process. Producers are developing new drilling techniques to reduce the large volumes of natural gas and water needed to separate the oil from sand. And the oil companies, which have pledged to reduce greenhouse emissions in their operations, are making the needed investments to meet environmental regulations. Yet the greenhouse-gas issue overshadows all other considerations. The challenge is how to produce and refine enough oil to meet rising energy demand, while mitigating carbon-dioxide emissions. Refiners have set a goal to improve energy efficiency 10 percent over the next decade, and one way they are making progress is capturing excess heat from their operations to produce additional electricity. An indication of change is the way oil companies now see unconventional sources of oil like tar sands. Refineries throughout the Midwest and Gulf Coast are being retrofitted to accommodate the heavier oil. And companies are investing larger sums than ever in developing new technologies to reduce airborne and water emissions. Even though the companies are confident they can meet environmental requirements, opponents are determined to block the necessary permits. If our refineries can't take advantage of this secure source of oil from tar sands, other countries -- notably China -- will move in. We need no reminders of what this could mean -- given the economic beating we took when oil supplies were scarce in the 1970s. Today, oil imports from overseas cost U.S. consumers more than $200 billion a year, and are responsible for a large share of our trade deficit. That’s key to economic hegemony Elliot 6 Guardian News Reporter [Larry, “Is America Heading for Economic Collapse?,” http://edstrong.blogcity.com/is_america_heading_for_economic_collapse.htm] First, running a permanent trade deficit affects the structure of your economy. It means fewer manufacturing jobs where productivity tends to be higher and more jobs in the service sector, where productivity tends to be lower. The US has struck a Faustian bargain with its trading partners, particularly China, responsible for about one third of the $700bn-plus trade
China creates millions of jobs and builds modern factories that are transforming it into an industrial superpower, and it also accumulates billions of total last year. As the American economist Tom Palley puts it: "US consumers get lots of cheap goods in return for which they give over paper IOUs that cost less to print. Meanwhile,
dollars in financial claims against the US. From this perspective, trade deficits don't matter because there are no limits to either government or private borrowing, and because manufacturing doesn't matter either." The logic of this, Palley notes drily, is that the US would benefit even further if China devalued its exchange rate and ran a larger trade surplus. The second point is potentially much more explosive: it
What would happen if, as a result of global developments over the coming decades, the dollar ceased to be the reserve currency of choice. This was a point raised by Avinash Persaud, one of the financial sector's more original thinkers, in a recent lecture in New York. Persaud's argument is as follows. Throughout history, there has always tended to be one dominant reserve currency along with a host of lesser rivals. In the 19th century Britain was the pre-eminent economy and sterling was the main reserve currency. Yet currencies don't retain their dominance forever; part of Britain's problem at the time of Suez was that it was struggling to adjust to a world in which it was no longer the top-dog currency but the creditors came knocking at the door asking for their cheques to be cashed. The US is living beyond its means, hoping that nobody cashes the cheques it has been merrily writing as the current account has gone deeper into the red. That's the advantage of being a reserve currency, even though, as Persaud notes, there is no rule which says that you have to run current account deficits simply because you are a reserve currency. Britain didn't a century ago. In the decade or so up to the first world war it had a trade surplus of 5% of GDP. "That is a mirror image of the US today. The UK was in surplus by as much as the US is in deficit." That deficit has enabled the Chinese to build up their industrial strength at a rapid rate, so much so that it is probable that China - and perhaps India - will have overtaken the US as the world's largest economy (on a purchasing power parity basis, at least) by 2050. Persaud thinks that the upshot of this will be that in the next few decades the dollar will start to lose its reserve status just as sterling did in the last century. "In the case of sterling's loss of reserve is the one sketched out in the crystal ball gazing at the top of this piece.
status, world war one and two accelerated a process that had begun more slowly before and ended abruptly with debt and inflation." Today the process is also being accelerated - by wars where the end is as elusive as the enemy and by a consumerism built on a property bubble. Perhaps we will not have to wait until 2050. In my lifetime, the dollar will start to lose its reserve currency status, not to the euro but to the renminbi or the rupee. This would clearly have massive economic and geopolitical consequences. As Persaud rightly says: "If it was economically and politically painful for the UK, even though its international financial position did not begin from a position of heavy deficit, what will it be like for the US which has become the world's largest debtor. "There will be an avalanche of cheques coming home to be paid when the dollar begins to lose its status." And this "avalanche of cheques" is likely to make for the most horrendous geo-political tension.
global financial hegemony without a fight seems fanciful in the extreme.
Jheidt, Anshu, Melissa, Alexa, Krystal
The idea that the US will give up
Oil refineries DA 7 week seniors
42
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
43
2nc Trade Deficit Impact Economic hegemony key to overall hegemony. Looney, 3 – Robert, Professor of National Security Affairs at the Naval Postgraduate School, November 2003. “From Petrodollars to Petroeuros: Are the Dollar's Days as an International Reserve Currency Drawing to an End?” Strategic Insights, 2.11, http://www.ccc.nps.navy.mil/si/nov03/middleEast.asp. Political power and prestige. The benefits of "power and prestige" are nebulous. Nevertheless, the loss of key currency status and the loss of international creditor status have sometimes been associated, along with such non-economic factors as the loss of colonies and military power, in discussions of the historical decline of great powers. Causality may well flow from key currency status to power and prestige and in the opposite direction as well.[8] On a broader scale, Niall Ferguson[9] notes that one pillar of American dominance can be found in the way successive U.S. government sought to take advantage of the dollar's role as a key currency. Quoting several noted authorities, he notes that [the role of the dollar] enabled the United States to be "far less restrained…than all other states by normal fiscal and foreign exchange constraints when it came to funding whatever foreign or strategic policies it decided to implement." As Robert Gilpin notes, quoting Charles de Gaulle, such policies led to a 'hegemony of the dollar" that gave the U.S. "extravagant privileges." In David Calleo's words, the U.S. government had access to a "gold mine of paper" and could therefore collect a subsidy form foreigners in the form of seignorage (the profits that flow to those who mint or print a depreciating currency). The web contains many more radical interactions of the dollar's role. Usually something along the following lines: World trade is now a game in which the U.S. produces dollars and the rest of the world produces things that dollars can buy. The world's interlinked economies no longer trade to capture a comparative advantage; they compete in exports to capture needed dollars to service dollar-denominated foreign debts and to accumulate dollar reserves to sustain the exchange value of their domestic currencies…. This phenomenon is known as dollar hegemony, which is created by the geopolitically constructed peculiarity that critical commodities, most notably oil, are denominated in dollars. Everyone accepts dollars because dollars can buy oil. The recycling of petro-dollars is the price the U.S. has extracted from oil-producing countries for U.S. tolerance of the oil-exporting cartel since 1973.[10] America's coercive power in the world is based as much on the dollar's status as the global reserve currency as on U.S. military muscle. Everyone needs oil, and to pay for it, they must have dollars. To secure dollars, they must sell their goods to the U.S., under terms acceptable to the people who rule America. The dollar is way overpriced, but it's the only world currency. Under the current dollars-only arrangement, U.S. money is in effect backed by the oil reserves of every other nation.[11] While it is tempting to dismiss passages of this sort as uninformed rants, they do contain some elements of truth. There are tangible benefits that accrue to the country whose currency is a reserve currency. The real question is: if this situation is so intolerable and unfair, why hasn't the world ganged up on the United States and changed the system? Why haven't countries like Libya and Iran required something like euros or gold dinars in payment for oil? After all, with the collapse of the Bretton Woods system in 1971 the International Monitary Fund's Standard Drawing Rights (unit of account) was certainly an available alternative to the dollar.[12]
Nuclear war Khalilzad ‘95 (Zalmay, RAND Corporation, Losing The Moment? Washington Quarterly, Vol 18, No 2, p. 84) Under the third option, the United States would seek to retain global leadership and to preclude the rise of a global rival or a return to multipolarity for the indefinite future. On balance, this is the best long-term guiding principle and vision. Such a vision is desirable not as an end in itself, but because a world in which the United States exercises leadership would have tremendous advantages. First, the global environment would be more open and more receptive to American values -democracy, free markets, and the rule of law. Second, such a world would have a better chance of dealing cooperatively with the world's major problems, such as nuclear proliferation, threats of regional hegemony by renegade states, and low-level conflicts. Finally, U.S. leadership would help preclude the rise of another hostile global rival, enabling the United States and the world to avoid another global cold or hot war and all the attendant dangers, including a global nuclear exchange. U.S. leadership would therefore be more conducive to global stability than a bipolar or a multipolar balance of power system.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
44
Xtn—Trade deficit bad—dollar/economy An expansion of the trade deficit causes foreign investors to abandon the dollar, forcing interest rate hikes, recession, and economic disaster Shostak 6 [Frank, Scholar at the Mises Institute, “Does the widening US trade deficit post a threat to the economy?”, February 2nd, http://www.mises.org/story/2029] Most economists are extremely alarmed about the effect of the expanding deficit on the current account. In 2004 the deficit stood at $668 billion, or 5.7% of the gross domestic product (GDP). For 2005 we have estimated that the deficit was around $788 billion, or 6.3% of GDP. As a result of the ballooning deficit, the value of US net external liabilities, expressed at historical cost, jumped to $5.1 trillion in 2005 from $4.3 trillion in 2004. As a percentage of GDP, net external liabilities climbed to 41% in 2005 from 37% in the previous year and 4.9% in 1980. It is held that this increase in foreign debt cannot go on forever. If the Americans do not begin reducing their trade deficit, there will come a time when foreigners will become less willing to hold dollar denominated assets. This in turn will weaken the US dollar. Consequently, once this happens the United States will be forced to increase interest rates (maybe sharply) to continue to attract foreign investments. Higher interest rates in turn will plunge the economy into recession. In short, given the size of the current account deficit it is held that the US dollar has to plunge in a big way against most currencies, and it is not possible to avoid a painful adjustment as a result of this. It would appear that the trade deficit is a major economic problem that must be urgently addressed in order to avoid serious economic disaster. Rising trade deficit causes economic collapse – four reasons Preeg 2K [Ernest H., senior fellow at the Hudson Institute in Washington and holds a Ph.D. in economics from the New School for Social Research, member of U.S. delegations to the Kennedy and Uruguay Rounds of GATT trade negotiations, State Department Director of the Office of European Community and OECD Affairs, Deputy Assistant Secretary for International Finance and Development, and White House Executive Director of the Economic Policy Group, “The Trade Deficit, the Dollar, and the U.S. National Interest”, Hudson Institute, p. 7-8] The current record deficits, projected to continue at high levels for the next several years, and the parallel buildup of the U.S. international net debtor position to $1.5 trillion in 1998, headed to $3-4 trillion by 2005, have, or will have, substantial adverse impact on the U.S. national interest in four distinct, although to a large extent mutually reinforcing, ways: (A) The protectionist backlash against U.S. liberal trade policy. The trade deficit was used by protectionists as an argument against fast-track legislation and a new WTO round at Seattle, and this protectionist pressure will intensify if the U.S. economy weakens or falls into recession. (B) A loss of about $120 billion per year in U.S. disposable income as a result of the foreign debt buildup. In the early 1980s, when the United States was a net creditor nation, there was a net inflow of $27 billion per year in investment income. U.S. foreign investment abroad has since grown sevenfold, and if the United States, absent the trade deficit, had remained a net creditor nation, the investment income inflow, related to the different composition between U.S. investment abroad and foreign investment in the United States, would have risen greatly, perhaps to $100 billion per year. Instead, there was a net outflow of investment income of$19 billion in 1999, and this outflow will rise along with the continued current account deficits. (C) Foreign government leverage against the United States from the rapid buildup of official dollar holdings abroad during the 1990s. Foreign governments increased official dollar holdings from $432 billion in 1989 to about one trillion dollars in 1999, for reasons explained in principal conclusion 1. At some future point, large dollar holders, such as Japan and China, could threaten to sell dollars, or shift them into euros and other currencies, as bargaining leverage against the United States related to trade or national security issues. One Japanese prime minister has publicly spoken of the temptation to sell dollars, and Chinese military strategists have published studies about integrated warfare with the United States, including in financial markets. (D) Potential disruptive market volatility against the dollar, with adverse effects on the U.S. and global economies. The longer the large U.S. external deficit continues and the foreign debt increases, the more likely will be a hard landing for the dollar and the U.S. economy as described in principal conclusion 6. This is the most immediate threat, but also the most inclusive because the impact of foregoing points (A) through (C) could be mutually reinforcing to such a market-triggered hard landing when the point of unsustainability of the deficit is reached.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
45
Xtn—Trade deficit bad—soft power The trade deficit decimates soft power by making the U.S. model unattractive and ceding influence to China, reversal of trade policy must come now so its on our terms instead of theirs Roubini and Sester 5- Professor of Economics at the Stern School of Business NYU- Research Associate, Global Economic Governance Programme, University College, Oxford-July/August 2005 (Nouriel and Brad, Foreign Affairs, “How Scary is the Deficit?” http://www.foreignaffairs.org/20050701faresponse84415/brad-setser/how-scary-is-the-deficit.html) There is little doubt that U.S. external debt and the current account deficit are eroding the appeal of the U.S. approach to economic policy, an important element of U.S. "soft power." Asian policymakers, in particular, view U.S. economic policy not as a model but as a problem: the United States' "exorbitant privilege" -- Charles de Gaulle's term for Washington's ability to finance deficits by printing dollars -- comes at their expense. The United States has a particularly delicate relationship with China, which is currently the single biggest buyer of U.S. debt. To date, disagreements on other issues have not prompted China to slow its accumulation of dollar reserves, but that is not to say that it could not happen in the future. The ability to send a "sell" order that roils markets may not give China a veto over U.S. foreign policy, but it surely does increase the cost of any U.S. policy that China opposes. Even if China never plays its financial card, the unbalanced economic relationship between the United States and China could add to the political tensions likely to accompany China's rise. Economic power usually flows to creditors, not debtors. While the United States roams the world looking to sweep up any spare savings to finance its huge deficits, China roams the world looking for new places to invest its surplus savings -- including in oil and gas resources and in states that Washington has judged pariahs. This is a far cry from the early days of the Cold War, when the United States used its surplus savings to finance the reconstruction of its allies, cementing political alliances with strong economic ties. Levey and Brown are right that so far, the world's appetite for U.S. credit has bolstered the U.S. ability to be a global hegemon "on the cheap." The United States exports enough to pay for only two-thirds of its imports; after recent tax cuts, the U.S. government collects enough non-Social Security revenue to cover only two-thirds of its non-Social Security spending. Foreigners made up the difference last year, buying enough U.S. Treasuries to fund the entire budget deficit. But without access to this easy financing from foreign central banks, the U.S. government and the U.S. electorate will have to make the kinds of unpleasant choices they have thus far avoided: among guns, butter, pork, tax cuts, and low interest rates. It is far better for Washington to act now, when it can act on its own terms, than to wait until sharp falls in foreign demand for dollar debt forces it to act. The most important step, of course, is to start cutting the budget deficit rather than just talking about cutting the budget deficit. This will require reversing some recent tax cuts, not just controlling spending. Otherwise, the only way to reduce U.S. demand for foreign savings would be through a sharp decrease in private investment and consumption -- with disastrous consequences for the U.S. economy. The Bush administration has been lucky over the past few years -- the growing value of U.S.-held European assets has kept U.S. external debt from rising, and foreign central banks' willingness to buy U.S. debt has helped keep U.S. interest rates low in the face of large deficits -- but its luck could easily turn. Arguing that deficits -- external as well as domestic -- do not matter does not make them go away. Celebrating the United States' real economic strengths while ignoring the real -- and growing -- economic vulnerabilities associated with unprecedented current account deficits is dangerous.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
46
2nc NAFTA Impact Free flow of energy supplies between the US and Canada is key to sustain NAFTA Laghi, 8 – Brian, Staff Writer, the Globe And Mail, 4/23, “Harper warns U.S. that Canada will bite back on NAFTA” Lexis Prime Minister Stephen Harper issued a warning yesterday to future U.S. leaders wanting to renegotiate the North American free-trade agreement, saying Canada would drive a tougher bargain because of its position as America's biggest energy supplier. Mr. Harper made the comments at the end of a meeting with U.S. President George W. Bush and Mexican President Felipe Calderon, where the three leaders defended NAFTA against attacks from Senators Hillary Clinton and Barack Obama as they seek to become the presidential candidate for the Democratic party. Asked whether it might not be a bad idea to rethink certain aspects of the deal, Mr. Harper said he was ready for any eventuality, but warned that Canada was in a stronger position than when the Canada-U.S. free-trade agreement was negotiated during the 1980s. "We are a secure, stable [energy] supplier. That is of critical importance to the future of the United States," Mr. Harper told reporters at the end of the North American leaders' summit known as the Three Amigos. "If we have to look at this kind of an option, I think, quite frankly, we'd be in an even stronger position now than we were 20 years ago, and we'll be in a stronger position in the future." Mr. Harper said he did not want to reopen NAFTA, but he is not the first Canadian politician to link opening the free-trade deal and energy. International Trade Minister David Emerson did so in February after Mr. Obama and Ms. Clinton criticized NAFTA. The agreement prohibits Canada from cutting oil exports to the United States during worldwide shortages unless supplies are also cut in Canada. The future of NAFTA became a topic of significant discussion in Canada after both Mr. Obama and Ms. Clinton broached the idea of reopening the deal during the Democratic primaries. Ms. Clinton's position on the matter is credited with helping her win the Ohio primary last month and giving her campaign a badly needed boost. Earlier, Mr. Harper and Mr. Calderon were asked whether they have begun to think about how to deal with the new administration that will follow the U.S. presidential election in November. Mr. Harper said he foresees no difficulties and that any incoming president will quickly realize the importance of the trading relationship between the two countries. "I anticipate that Canada will have a very productive relationship with the next administration, because I'm confident that, when the facts are looked at, any president - just as any prime minister of Canada - will quickly conclude how critically important NAFTA and our North American, Canadian-American trade relationship are to jobs and prosperity." Mr. Calderon said Mexico will have a respectful relationship with whoever leads the U.S. Answering an unrelated question on rocketing oil prices, Mr. Bush reminded reporters that Canada and Mexico are the greatest suppliers to the United States and that America is grateful for that. He said that the United States is paying the price for not stepping up exploration. Canadian control of NAFTA is key to maintaining North American competitiveness and prosperity Mintz, 8—Jack, staff writer, the Financial Post, “Don’t Blame NAFTA for U.S. Job Losses” National Post, 4/4, Lexis Nevertheless, after the U.S. election, Canada has a real opportunity to set a new and more exciting agenda for NAFTA negotiations to provide new benefits to all three countries. The Security and Prosperity Partnership initiated in 2005 among the three "Amigos" was only a start to a new framework. Canada could look for a better agreement that improves the net benefits achieved from NAFTA. Easing restrictions on labour mobility, professional standards, regulations and a host of other issues would significantly benefit all three countries. A more integrated market eliminating barriers to the mobility of capital, labour, goods and services would make North America a dynamic, competitive region in a world now characterized by global supply chains. While the United States should be our most important trade relationship, we should be looking at agreements with major trading partners such as Asia and the European Union, rather than marginal agreements with countries of less economic importance. Given the growth of global trade linkages, our aim should be to capture as much value-added in Canada as possible. Canada would not only conclude more trade agreements with other countries but would also be a significant player at the World Trade Organization if we removed obstacles to trade to which other countries have objected. Instead, given our adherence to outdated policies such as agriculture price-support programs and the monopoly Canadian Wheat Board, Canada is marginalized in WTO and bilateral negotiations. It would make sense to protect our position if such measures were of economic benefit to Canada. Instead, price support programs protect milk, chicken and egg producers who charge high consumer prices, hitting most of all the poor. CWB has traded wheat at prices that recent studies have shown to be below the market price in some jurisdictions. Canadians have been free traders going back to the days of our lucrative fur trade. We should continue our tradition of ensuring open borders for trade as we have done under NAFTA. The challenge is to overcome protectionist sentiment in the United States and make sure we continue to benefit from trade with both the U.S. and other major partners. As a resource-rich country, we should press strongly our competitive advantages.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
47
2nc NAFTA Impact That’s key to heg Khalilzad ‘95 (Zalmay, Policy Analyst – Rand, Washington Quarterly, Spring, Lexis) The United States is unlikely to preserve its military and technological dominance if the U.S. economy declines seriously. In such an environment, the domestic economic and political base for global leadership would diminish and the United States would probably incrementally withdraw from the world, become inward-looking, and abandon more and more of its external interests. As the United States weakened, others would try to fill the Vacuum. To sustain and improve its economic strength, the United States must maintain its technological lead in the economic realm. Its success will depend on the choices it makes. In the past, developments such as the agricultural and industrial revolutions produced fundamental changes positively affecting the relative position of those who were able to take advantage of them and negatively affecting those who did not. Some argue that the world may be at the beginning of another such transformation, which will shift the sources of wealth and the relative position of classes and nations. If the United States fails to recognize the change and adapt its institutions, its relative position will necessarily worsen. To remain the preponderant world power, U.S. economic strength must be enhanced by further improvements in productivity, thus increasing real per capita income; by strengthening education and training; and by generating and using superior science and technology. In the long run the economic future of the United States will also be affected by two other factors. One is the imbalance between government revenues and government expenditure. As a society the United States has to decide what part of the GNP it wishes the government to control and adjust expenditures and taxation accordingly. The second, which is even more important to U.S. economic wall-being over the long run, may be the overall rate of investment. Although their government cannot endow Americans with a Japanese-style propensity to save, it can use tax policy to raise the savings rate. Nuclear war Khalilzad ‘95 (Zalmay, RAND Corporation, Losing The Moment? Washington Quarterly, Vol 18, No 2, p. 84) Under the third option, the United States would seek to retain global leadership and to preclude the rise of a global rival or a return to multipolarity for the indefinite future. On balance, this is the best long-term guiding principle and vision. Such a vision is desirable not as an end in itself, but because a world in which the United States exercises leadership would have tremendous advantages. First, the global environment would be more open and more receptive to American values -democracy, free markets, and the rule of law. Second, such a world would have a better chance of dealing cooperatively with the world's major problems, such as nuclear proliferation, threats of regional hegemony by renegade states, and low-level conflicts. Finally, U.S. leadership would help preclude the rise of another hostile global rival, enabling the United States and the world to avoid another global cold or hot war and all the attendant dangers, including a global nuclear exchange. U.S. leadership would therefore be more conducive to global stability than a bipolar or a multipolar balance of power system.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
48
Xtn—Dependence KT NAFTA Canadian exportation of tar sands and oil shales to the US is key to sustaining NAFTA—that’s key to US Canada trade relations Leonard, 8—Andrew, “Canada’s Ferocious NAFTA Growl,” Salon.com, 2/28, Lexis But all this focus on whether the Obama campaign actually fumbled the NAFTA ball in such a spectacular fashion misses the real point, which is the opportunity for a refresher course in U.S.-Canadian trade relations. Question: Who is the largest supplier of energy resources to the United States? Answer: Canada. Canada exports more crude oil to the United States than any other nation, including Saudi Arabia. All of that oil, along with a gusher of natural gas, comes free of any kind of export controls or tariffs, courtesy of NAFTA. In fact, the United States consumes almost 100 percent of Canada's energy exports. Which undoubtedly puts Canada in the driver's seat should a new president of the United States decide he or she wanted to "renegotiate" NAFTA. David Emerson, Canada's trade minister, took some pains to remind Hillary Clinton and Barack Obama of U.S. dependence on foreign (Canadian) oil on Thursday, according to a Globe and Mail story a reader kindly forwarded to me. Americans' privileged access to Canada's massive oil and gas reserves could be disrupted if Washington cancels the NAFTA accord as Democratic presidential candidates threaten, Canadian Trade Minister David Emerson warned yesterday. "There's no doubt if NAFTA were to be reopened we would want to have our list of priorities," he said. In other words, if you Yankees think you can wave a magic wand and "renegotiate NAFTA" so as to be more beneficial to Americans at the expense of Canada's interests, think again, because we'd be happy to close off the oil spigot and sell our crude, to, oh, I don't know, China. Don't mess with Canada! Can also use the cards in the block titled “xtn—dependence KT canadian trade relations”
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
49
2nc NAFTA Impact—Mexican Economy NAFTA is vital to sustaining the Mexican economy Laghi, 8 – Brian, Staff Writer, the Globe And Mail, 4/23, “Harper warns U.S. that Canada will bite back on NAFTA” Lexis "There's not a lot of excess capacity in the world." Mr. Bush also gave a spirited defence of NAFTA, noting that the deal has brought increased wealth to areas such as the U.S.-Texas border. Downgrading NAFTA would cost Mexicans jobs, he said. "When you're able to export in your neighbourhood, it helps to create jobs," he said. Consumers also have more options to buy under free trade, he said. "People who say let's get rid of NAFTA as a throwaway political line must understand this has been good for America." Mr. Calderon said amending the deal could increase the thirst for Mexicans to migrate to the United States. Mexican Economic Collapse would kill the world economy The Dallas Morning News 95 (Nov. lexis) With the exception of 1982 - when Mexico defaulted on its foreign debt and a handful of giant New York banks worried they would lose billions of dollars in loans - few people abroad ever cared about a weak
. This time, the world is keeping a close eye on Mexico's unfolding financial crisis for one simple reason: Mexico is a major international player. If its economy were to collapse, it would drag down a few other countries and thousands of foreign investors. If recovery is prolonged, the world economy will feel the slowdown. "It took a peso devaluation so that other countries could notice the key role that Mexico plays in today's global economy," said economist Victor Lpez Villafane of the Monterrey Institute of Technology. "I hate to say it, but if Mexico were to default on its debts, that would trigger an international financial collapse" not seen since the Great Depression, said Dr. Lpez, who has conducted comparative studies of the Mexican economy and the economies of some Asian and Latin American countries. peso. But now it's different, experts say
Mead 92 – Senior Fellow for US Foreign Policy at Council on Foreign Relations [Walter Russell, “Depending on the kindness of strangers,” New Perspectives Quarterly, Summer, p. 28, Academic Search Elite] If so, this new failure--the failure to develop an international system to hedge against the possibility of worldwide depression--will open their eyes to their folly. Hundreds of millions-- billions--of people around the world have pinned their hopes on the international market economy. They and their leaders have embraced market principles—and drawn closer to the West--because they believe that our system can work for them. But what if it can't? What if the global economy stagnates--or even shrinks? In that case, we will face a new period of international conflict: South against North, rich against poor. Russia, China, India--these countries with their billions of people and their nuclear weapons will pose a much greater danger to world order than Germany and Japan did in the '30s.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
50
2nc NAFTA Impact—Free Trade Extend 1nc Mintz—NAFTA is key to global free trade And, free trade is the only thing between humanity and extinction.
Maclean’s, April 22, 2005, (http://www.macleans.ca/switchboard/columnists/article.jsp? content=20050425_104234_104234) Next time the guy next door goes off on a rant about how free trade is ruining the country and how Ottawa has to do more to protect Canadian jobs, you might want to gently remind him that protectionism and tariffs only lead to higher prices, inefficient industries and a lower standard of living. Or you could just call him a Neanderthal. This approach may not win you many friends, but you'd have history on your side. A new study by economists at Michigan State University, Tilburg University in the Netherlands and the University of Wyoming suggests the Neanderthals may have died out 30,000 years ago in large part because they failed to embrace the principles of free trade. According to the researchers, Homo sapiens figured out how to divide labour and trade goods within and between regions, while the shorter, stronger Neanderthals lived in disorganized, isolated tribes. As a result, the knuckle draggers gradually disappeared from the face of the earth and Homo sapiens went on to create the wonders of the world, such as luxury automobiles, reality TV and the double mochaccino. Granted, this is only one theory among many to explain the extinction of our squat cousins. But the evidence provides some tantalizing food for thought -- especially now, as we grapple with an increasingly hostile environment for cross-border commerce. Throughout the Western world, anti-globalization protests, trade disputes and politically motivated tariff walls are clogging the arteries of commerce. And nowhere is the rise of protectionism more worrying than in that bastion of free enterprise, the United States. All of which leaves Canada with a choice. Option one: we can finally forge new ties with the exploding economic tigers in Asia and diversify our trade. Last week's tentative deal between Enbridge and PetroChina to send up to 200,000 barrels of oil a day overseas is a good step in the right direction. But given that only 1.3 per cent of Canada's exports went to China in 2003, compared to 79.7 per cent heading south, we've got a lot of ground to make up. No country will ever supplant the U.S. as our biggest trading partner, but we desperately need links with other nations to compliment it. Option two? To close our eyes to the changing world. That's the one the Neanderthals chose, and it didn't turn out so well.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
51
Xtn—NAFTA KT free trade Without NAFTA, no new economies will prosper and there will be no global free trade The US Embassy 08 – (July 1, “The Impact Of NAFTA: A US Perspective,” google, http://www.usembassy.at/en/embassy/photo/nafta_frisbie.htm) NAFTA has always been seen by the U.S. government as part of a broader economic and political strategy. Even in transmitting the NAFTA to the U.S. Congress in November 1993, President Clinton noted: "NAFTA is a critical step toward building a new post-Cold War community of free markets and free nations throughout the Western Hemisphere." U.S. trade strategy goes beyond the regional to the global level. The U.S. proposal last year in the World Trade Organization on agricultural liberalization, our recent proposal on industrial liberalization, and our exchange of proposals on services illustrate that strategy. The United States sees regional integration as a valuable, and perhaps essential, step towards the goal of global liberalization. As countries and enterprises become more comfortable with liberalization at the bilateral or subregional level, they gain confidence in opening their economies at the global level. We see subregional agreements such as NAFTA as steps on the road toward global free trade. That is also the way in which we view our recently concluded free trade agreement with Chile, the negotiations underway for a free trade agreement with Central America, and negotiation of a hemisphere-wide Free Trade Area of the America. The Bush Administration's approach is to negotiate simultaneously at the global level through the World Trade Organization, as well as at the regional, subregional and bilateral levels. This creates a constructive competition for liberalization among our trading partners. We believe the various negotiations are mutually reinforcing. NAFTA is key to global relations, free trade, and US security policy The US Embassy 08 – (July 1, “The Impact Of NAFTA: A US Perspective,” google, http://www.usembassy.at/en/embassy/photo/nafta_frisbie.htm) The United States sees regional integration as a valuable, and perhaps essential, step towards the goal of global liberalization. As countries and enterprises become more comfortable with liberalization at the bilateral or subregional level, they gain confidence in opening their economies at the global level. We see subregional agreements such as NAFTA as steps on the road toward global free trade. That is also the way in which we view our recently concluded free trade agreement with Chile, the negotiations underway for a free trade agreement with Central America, and negotiation of a hemisphere-wide Free Trade Area of the America. The Bush Administration's approach is to negotiate simultaneously at the global level through the World Trade Organization, as well as at the regional, subregional and bilateral levels. This creates a constructive competition for liberalization among our trading partners. We believe the various negotiations are mutually reinforcing. The Bush Administration also sees strong connections between our economic and security policies. Economic strength and resiliency are the foundation of our national security. The U.S. national security strategy includes as one of its priorities that we must advance global prosperity by expanding trade and investment between nations. By strengthening the economic ties between the U.S. and its partners around the world, trade agreements encourage reforms that promote long-term development, open societies and ultimately democracy and global cooperation. Two other economic dimensions of the U.S. national security strategy are: first, that we must make not only the U.S. but the global economy more resilient to economic shocks, and second, that we must help poor nations participate fully in the rising tide of prosperity. A year ago, at the Financing for Development Conference in Mexico, President Bush said: "The advance of development is a central commitment of American foreign policy." The United States is working in many ways to fulfill that commitment, through our trade policy as I noted above, but also through our aid programs and support for multilateral economic cooperation. One new facet of our overall development strategy is President Bush's proposal for the Millennium Challenge Account. This proposed $5 billion new aid program will focus on rewarding pro-growth policies in developing countries. It is built on the indisputable fact that sustainable poverty reduction can only be achieved through economic growth and improved productivity, which in turn depend on the accumulation of capital and technology. Key to poverty reduction, therefore, is the elimination of impediments to increased investment and the spread of technology - especially poor governance, weak health and education system, and excessive restrictions on economic transactions. Aid under the MCA will be directed to poor countries that are making real improvements in their performance in these three areas, and the program will include specific ways of measuring concrete results.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
52
2nc NAFTA Impact—Democracy NAFTA is key to promote democracy, environmental laws, relations, and socially productive citizens The US Embassy 08 – (July 1, “The Impact Of NAFTA: A US Perspective,” google, http://www.usembassy.at/en/embassy/photo/nafta_frisbie.htm) One of the most innovative aspects of NAFTA has been the impact on the environment and on labor standards. You will recall that the three NAFTA partners, at the urging of the United States, signed "side agreements" in these two areas. Through the North American Agreement on Environmental Cooperation, the partners are promoting effective enforcement of each country's environmental laws. The Commission for Environmental Cooperation fosters the development of regional information and technical expertise, and implements trilateral cooperative programs in such areas as sustainable agricultural production, control of dangerous chemicals, development of environmental guidelines for businesses, and strategies for conservation of natural ecosystems. In addition, the United States and Mexico cooperate through the Border Environment Cooperation Commission and the North American Development Bank to develop and finance environmental infrastructure in the U.S.-Mexico border area. More than 40 projects are now complete or underway, with an aggregate cost of approximately $1 billion, and serving about 9 million residents in the border regions. And more projects are in development. Through the North American Agreement on Labor Cooperation, the NAFTA partners have created mechanisms for cooperative activities, as well as for independent evaluations and dispute settlement related to the enforcement of labor laws. Public submissions made under this agreement have led to public hearings, ministerial consultations, and action plans to address problems raised in the submissions. In addition, NAFTA partners have established cooperative programs on industrial relations, health and safety, child labor and migrant workers issues. The impact of NAFTA is particularly dramatic on the political relationship between the United States and Mexico. For Mexico, NAFTA represented a turning point. By committing itself to outward looking, market-based economic policies, Mexico not only gained guaranteed comprehensive duty-free preferential access to the largest market in the world, it also transformed its relationship with its neighbor. Mexico's long history of distrust and resentment of the U.S., while certainly not eliminated, has definitely been mitigated. The new economic partnership with the U.S. coincided with and reinforced the political modernization underway in Mexico over the past generation. The election of Vicente Fox, the first non-PRI party president in modern Mexican history, was an important step in that modernization. The rule of law, transparency in government, broader participation by citizens in the political process, and greater freedom from central state regulation - all are values important to democracy and development, and all are values promoted and reinforced by NAFTA. NAFTA also enabled Mexico to bounce back from its 1994 financial crisis and launched the country on the path of becoming a global economic competitor. This economic resiliency and its growing economic influence have given Mexico a new international self-confidence and prominence. Starting next week, Mexico will serve as host of the negotiations toward a Free Trade Area of the Americas, scheduled to conclude in 2005. It will host the G-20 this year, and in September will host the important WTO Ministerial meeting in Cancun - all signs of the respect the world holds for Mexico's growing economic importance (not to mention Mexico's now decade-old membership in the OECD). Global democratic consolidation is essential to prevent many scenarios for war and extinction. Diamond, 95 (Larry Diamond, senior fellow at the Hoover Institution, December 1995, Promoting Democracy in the 1990s, http://wwics.si.edu/subsites/ccpdc/pubs/di/1.htm) OTHER THREATS This hardly exhausts the lists of threats to our security and well-being in the coming years and decades. In the former Yugoslavia nationalist aggression tears at the stability of Europe and could easily spread. The flow of illegal drugs intensifies through increasingly powerful international crime syndicates that have made common cause with authoritarian regimes and have utterly corrupted the institutions of tenuous, democratic ones. Nuclear, chemical, and biological weapons continue to proliferate. The very source of life on Earth, the global ecosystem, appears increasingly endangered. Most of these new and unconventional threats to security are associated with or aggravated by the weakness or absence of democracy, with its provisions for legality, accountability, popular sovereignty, and openness. LESSONS OF THE TWENTIETH CENTURY The experience of this century offers important lessons. Countries that govern themselves in a truly democratic fashion do not go to war with one another. They do not aggress against their neighbors to aggrandize themselves or glorify their leaders. Democratic governments do not ethnically "cleanse" their own populations, and they are much less likely to face ethnic insurgency. Democracies do not sponsor terrorism against one another. They do not build weapons of mass destruction to use on or to threaten one another. Democratic countries form more reliable, open, and enduring trading partnerships. In the long run they offer better and more stable climates for investment. They are more environmentally responsible because they must answer to their own citizens, who organize to protest the destruction of their environments. They are better bets to honor international treaties since they value legal obligations and because their openness makes it much more difficult to breach agreements in secret. Precisely because, within their own borders, they
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
53
respect competition, civil liberties, property rights, and the rule of law, democracies are the only reliable foundation on which a new world order of international security and prosperity can be built.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
54
Xtn—Dependence KT US-Canada Trade Relations Continued investment in Canadian resources makes US-Canada trade sustainable McCain, 8 – Senator John McCain, Presidential Candidate, CNN, McCain speech on relationship between U.S. and Canada, 6/27, Lexis We must also work to ensure reliable energy supplies and increase sources of renewable energy. As you all know, Canada is America's largest energy supplier. Not only does Canada have the second largest proven oil reserves in the world, 60 percent of the energy produced in Canada is hydroelectric, clean energy. We stand much to gain by harmonizing our energy policies, just as have gained by cooperating in trade through NAFTA. Since NAFTA was concluded, it has contributed to strong job growth and flourishing trade. Since the agreement was signed, the United States has added 25 million jobs and Canada more than 4 million. Cross-border trade has more than doubled since NAFTA came into force. We have established North America as the world's largest economic market and the integration of our economies has led to greater competitiveness of American and Canadian businesses. Because of our common market, our workers are better able to compete, and to find opportunities of their own in the global economy.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
55
AT: NAFTA Bad—Job Loss/Econ No link—NAFTA has been misunderstood as the trigger for economic problems in the US Mintz, 8—Jack, staff writer, the Financial Post, “Don’t Blame NAFTA for U.S. Job Losses” National Post, 4/4, Lexis Much of the criticism in the United States regarding NAFTA is misdirected. NAFTA is being blamed for U.S. trade deficits, illegal immigrants from Mexico and the suppression of wages and unemployment in the United States as a result of competition from low-wage economies. The truth is that many of the economic problems faced by the United States have little to do with NAFTA. The 2007 U.S. trade deficit of $709US-billion has grown as a result of Asian and petroleum trade, rather than trade with NAFTA partners. The largest trade deficit is with China, accounting for 30% of the total deficit, with another 15% being with other Pacific Rim countries. The trade deficit with OPEC countries is close to 22% of the total deficit and the shares with Canada and Mexico are 9% and 7% respectively, mostly due to oil imports. Whether any of this translates into job losses in the United States is another matter. The U.S. unemployment rate has been exceptionally low since 1994 and exports to Mexico alone have tripled since 1994. Recent U.S economic problems are the result of credit market difficulties, not trade. As for illegal Mexican immigration, NAFTA is irrelevant since the agreement did not provide for free mobility among the three countries, except for an easier approach for legal NAFTA mobility. Given that the arguments against NAFTA are so weak, it is hard to understand what a future U.S. leader might want to revisit. It would seem any negotiation taken on by the United States would end up as a minor affair, since the agenda to fix up problems under NAFTA is so light.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
56
2nc Canada Relations Impact Sustaining US-Canadian relations depends upon continued energy trade McKenna, 8 – Barrie, staff writer, the Globe and Mail, “Is Obama right for Canadians?; Experts say trade, energy and economic ties to the U.S. could suffer for Canada under Democrat leader” 6/9, lexis At a time of recession, worries among the American public are always heightened," he said. John McCain, the presumptive Republican candidate, on the other hand, is a staunch advocate of free trade. Another potentially thorny issue for the two countries is energy. Canada is the United States's largest foreign supplier of crude oil, as well as natural gas and electricity. If the United States gets serious about curbing its oil imports and cutting carbon emissions, it could have a profound impact on Canada, and particularly Alberta, argued Christopher Sands, who follows Canada-U.S. relations for the Hudson Institute in Washington. "If Obama is elected, Alberta will have a real challenge," Mr. Sands said. "They'll need to make the case that oil is plentiful and that it can be a lot cleaner." He likened the challenges facing the oil sands to the intense U.S. resistance Hydro-Quebec faced to its hydroelectric projects in northern Quebec in the 1980s. "There [is] a campaign in the U.S. to stigmatize the oil sands," he said. "It's going to take a real push back to counter that." No matter who wins in November, Ottawa is likely to face challenges over the border. US-Canada relations are key to NORAD effectiveness. Christuik, 08 (Karen Christuik, writer for the Canadian Air Force. “Celebrating 50 Years of NORAD” http://www.airforce.gc.ca/site/newsroom/news_e.asp?cat=114&id=6161) "There are no two nations like Canada and the United States that have agreed to protect each other's air space and sovereignty. When you consider the support that NORAD provides and the threats in so many domains that it counters, it is a truly outstanding relationship." Today, May 12, 2008 marks the 50th anniversary of the most significant military agreement between Canada and the US, an agreement that saw the creation of NORAD. Although originally created during the Cold War to defend North America against possible air invasion, NORAD has evolved considerably since then, particularly in response to the 2001 World Trade Center attacks. Most military personnel know NORAD as the entity that provides aerospace warning and aerospace control for North America through the command centre at NORAD-US Northern Command (USNORTHCOM) in Colorado Springs, Colo., and at three regional headquarters
Canadians play a major role in NORAD," says Major Jason Proulx, Assistant Deputy at NORADUSNORTHCOM Public Affairs. "When you look at a map that shows the NORAD airspace, you will notice that the Canadian region comprises the largest area to cover and protect - nearly 10 million square kilometres. This air coverage is particularly vital in less populated areas such as Canada's Arctic." Unquestionably, the NORAD of today is vastly different from what it was 50 years ago. In those days, in Winnipeg,Alaska and Florida. "Through [the Canadian NORAD Region at 17 Wing Winnipeg],
one of Canada's main contributions was the Distant Early Warning (DEW) Line, a massive engineering marvel of radar stations that stretched across the Arctic and remained in operation for 30 years. Two other radar systems (the Pinetree Line and the Mid-Canada Line) worked in conjunction with the DEW Line as additional sites for detection. For air defence fighter aircraft, Canada relied on nine Royal Canadian Air Force squadrons headquartered at Air Defence Command in Saint-Hubert, Que. According to Joseph T. Jockel, director of Canadian Studies at St. Lawrence University in Canton, N.Y. and author of a recent book on NORAD's history, one reason for the large number of fighter squadrons was because many people believed that if an air defence battle occurred in North America, it would take place over southern Canada. "Then, the threat shifted to missiles," explains Mr. Jockel, "and NORAD turned into more of a warning and assessment command. That is still one of its key roles - warning and assessing." One person who can speak with first-hand knowledge about the post-September 11 changes to NORAD, and the new spotlight on homeland security, is Colonel Christopher Coates, the current director of operations for 1 Canadian Air Division/Canadian NORAD Region. "We've developed procedures and means to look inward to extend our air defence capabilities over the continent," says Col Coates. "Operationally, our protection used to start at the edge of our continent, and we focused outward, trying to keep the threats at a distance." With its long and complicated history, and new threats occurring continually throughout the world, it is difficult to imagine what NORAD will look like in the next 50 years. Nonetheless, with the backbone of the first five decades behind us, the future of NORAD
"NORAD is more relevant today than ever as an interdiction force against multi-layered threats," says Gen Renuart. "Its foundation is a relationship based on sincere friendship, shared values and mutual respect. Canada has been a committed ally of the United States, and the bond of NORAD is an example of that." definitely looks bright for both Canada and the US
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
57
2nc Canada Relations Impact NORAD is key to preventing a terrorist attack against the US Miles,7 (Donna Miles, American Forces Press Service “NORTHCOM, NORAD Working to Ensure Terror Plots Against Homeland Fail.” http://terrorism-online.blogspot.com/2007/07/northcom-norad-working-to-ensure-terror.html) Officials at U.S. Northern Command are "keenly aware" of information within the newly released National Intelligence Estimate and are committed to working to ensure terrorists don't succeed in attacking the United States, a NORTHCOM official said. A declassified version of the report released yesterday notes that Islamic terrorist groups, particularly al Qaeda, are likely to remain a persistent threat to the U.S. homeland over the next three years. The report paints a picture of terrorists' "undiminished intent to attack the homeland." "We assess that al Qaeda's homeland plotting is likely to continue to focus on prominent political, economic and infrastructure targets with the goal of producing mass casualties, visually dramatic destruction, significant economic aftershocks and/or fear among the U.S. population," the report states. NORTHCOM, the Defense Department's lead agency for homeland defense, is working closely with the Department of Homeland Security and other partners to "deter and disrupt, and if necessary, confront any planned attack against the homeland," said Michael Kucharek, a spokesman for NORTHCOM and North American Aerospace Defense Command. The command is "focused on ensuring that we disrupt and defeat those who wish to kill innocent civilians by any means possible," he said. NORTHCOM maintains a representative in the National Counterterrorism Center and is connected to more than 150 operation centers throughout the United States, Kucharek explained. This network continuously evaluates all credible intelligence information to establish appropriate response force posture levels and force protection levels for Defense Department installations nationwide, he said. Meanwhile, "U.S. Northern Command has directed all subordinate commands to increase their vigilance, to take precautionary actions and to review their local force protection procedures," he said. Due to security considerations, the command does not discuss the specific types of security measures it is taking. NORAD, the U.S.-Canadian command that provides aerospace warning and control for North America, is a key player in that effort. NORAD is "standing vigilant to protect our homelands from any emerging threat by working in close cooperation and coordination with our partners in the U.S. and Canada and their respective government agencies," Kucharek said. Eight intelligence organizations within the Defense Department contributed to the National Intelligence Estimate: the Defense Intelligence Agency, National Security Agency, National Geospatial-Intelligence Agency, National Reconnaissance Office, and Army, Navy, Air Force and Marine Corps intelligence. Extinction Sid-Ahmed ’04 (Mohamed, Al-Ahram Weekly, “Extinction!” http://weekly.ahram.org.eg/2004/705/op5.htm) What would be the consequences of a nuclear attack by terrorists? Even if it fails, it would further exacerbate the negative features of the new and frightening world in which we are now living. Societies would close in on themselves, police measures would be stepped up at the expense of human rights, tensions between civilisations and religions would rise and ethnic conflicts would proliferate. It would also speed up the arms race and develop the awareness that a different type of world order is imperative if humankind is to survive. But the still more critical scenario is if the attack succeeds. This could lead to a third world war, from which no one will emerge victorious. Unlike a conventional war which ends when one side triumphs over another, this war will be without winners and losers. When nuclear pollution infects the whole planet, we will all be losers.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
58
AT: Canada backlashes to NORAD No risk of Canadian backlash on NORAD – they’re too dependent on collaboration with the US military. Battis, 07 (Samir Battis, researcher and lecturer at the Canada Research Chair in Canadian Foreign and Defence Policy at the University of Quebec. “BMD, NORAD, and Canada-US Security Relations” http://www.ploughshares.ca/libraries/Briefings/brf044.pdf) As important before as during the Cold War, the defense relationship between Canada and the United States remains important after. But every time Canada takes a position that may be seen in Washington as having a material impact on U.S. national interest, this decision must be made very carefully18 to not affect its owns. As written above, according to the key strategic documents (1994 Defense White Paper, 2005 Defense Policy Statement) Canadian memberships in the North Atlantic Treaty Organization (NATO) and the North American Aerospace Defense (NORAD) are considered as the main pillars of Canadian military security. From a Canadian perspective, to have allies to rely on ensures Canada’s defense, which has relatively small military weight and, consequently, limited ability to defend itself. In regional security area, the Canadian government declared: “Our defense relationship with the US is key for the security of Canadians. Canada’s longstanding cooperation with the US through the Permanent Joint Board on Defense and NORAD has enabled us to share the security burden for North America at a significantly lower cost and with more effectiveness that Canada could achieve on its own.19” These statements point out the Canadian dependence in global and regional relationships to ensure its own security. Further more, with theUnited States at its side; Canada is in the situation to reach a high degree of security, higher than which it could expect to achieve on its own. As written before, such a posture was already adopted since 1940 Ogdensburg Agreement20 and appears in the 1994 White Paper which quotes: “A longstanding principle of Canadian defense policy is that defending Canada is best done in a collaborative manner with the United States. Canada and the United States rely on each other for help in protecting their territory and approaches. If this collaboration is not maintained, the United States will defend the continent on its own, leaving Canada without the influence we currently enjoy as a result of this defense partnership.”
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
59
Xtn—Dependence KT US-Canada Trade Relations US processing of Canadian tar sands is vital to stimulate US-Canadian trade relations National Post, 5 – “Tar Sands Seen as Reliable Source,” March 24, 2005, Lexis "We appreciate the fact that Canada's tar sands are now becoming economical and we are glad to be able to get the access toward a million barrels a day headed toward two million barrels a day. That's, by the way, an advantage for open trade." There is more oil in Alberta's tar sands than in Saudi Arabia, and recent new technologies developed by both Canada and the United States have helped reduce the price of extracting that oil. US-Canadian trade relations are kept sustainable by oil investments McCain, 8 – Senator John McCain, Presidential Candidate, “John McCain on Energy for a Secure Nation” States News Service, 6/23, Lexis The Formation Of The OPEC Cartel And The Oil Embargo Of The 1970s Demonstrated Our Vulnerability. At the time of the oil embargo, we imported roughly one third of our oil. Today, we import almost two-thirds. Since 1973, the United States has gone from importing 6 million barrels of oil a day to 12 million barrels per day with petroleum payments comprising 41 percent of the U.S. trade deficit ($293 billion of $759 billion). While Our Dependence On Foreign Oil Does Support Our Enemies, The United States Relies On Canada And Mexico -- Our Democratic Friends And NAFTA Partners -- For Much Of Our Oil. America imports about one third of its oil from Canada and Mexico. When politicians threaten to renegotiate NAFTA unilaterally, they threaten to disrupt relations between the United States and our most stable and friendly providers of oil. These politicians also forget that Canada is the most important export market for 36 of our 50 states.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
60
Xtn—Dependence KT US-Canada Trade Relations US dependence on Canadian energy is key to sustaining trade relations with Canada Robertson, 8 – Lloyd, Reporter for CTV Television, “North American Leaders Summit” 4/22, Lexis LLOYD ROBERTSON: Prime Minister Stephen Harper laid a trump card on the table at the North American leaders' summit in New Orleans today. It came on the final day of his meetings with US President George Bush and Mexican President Felipe Calderon. All three leaders agree now is not the time to renegotiate the free trade deal. But Harper says if the deal is reopened, Canada would be in the strongest bargaining position because of American dependence on Canadian energy. CTV's Ottawa bureau chief Robert Fife has more. ROBERT FIFE (Reporter): The three leaders planted a tree in Lafayette Square to mark earth day. They chowed down on a breakfast of grits, and they met business leaders to talk about speeding the flow of commerce across the security-tight US border. But the elephant in the room was American Presidential politics and the rise of US protectionism. GEORGE W. BUSH (US President): I'm concerned about protectionism in America. FIFE: Democratic contenders Barack Obama and Hillary Clinton have been using North American free trade as a whipping post. BUSH: Now is not the time to renegotiate NAFTA or walk away from NAFTA. Now is the time to make it work better. FIFE: The Prime Minister says he's convinced the next president, Democratic or Republican, will see the benefits of a trade pact that accounts for $1 trillion of annual three way trade. But Stephen Harper says Canada will be in the driver's seat if NAFTA is reopened. That's because Canada is America's biggest supplier of oil and gas. STEPHEN HARPER (Canadian Prime Minister): That is of critical importance to the future of the United States, and if we had to look at this kind of an option, I think quite frankly, you know, we would be in an even stronger position now than we were 20 years ago. FIFE: This is Bush's fourth and final summit of the three amigos. And unlike past summits, there were few protesters. UNIDENTIFIED MAN: We are under attack! FIFE: President Bush started these summits in 2005, but he is now in the twilight of his presidency, and the prime minister is under domestic pressure to return to the days of one-on-one meetings with the president where there can be a greater focus on Canadian concerns. Robert Fife, CTV News, New Orleans.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
61
2nc Canadian economy impact Tar sand investment is vital to sustain the Canadian and US economies Timmins Daily Press, 2 “US Can’t have it Both Ways,” 1/14/2002, The daily press, Lexis l One of the best ways to reduced dependency on the Middle East, he said, is to develop the massive, untapped resources of Western Canada. l The Alberta Tar Sands has more reserves than there's oil in Alberta. In addition, he said untapped resources in British Columbia, the Yukon and the Northwest Territories could go a long way to fuel the energy-dependent economies of the United States and Canada. Paul Cellucci, the dynamic U.S. ambassador to Canada, has some some terrific ideas. Unfortunately some of them are half-baked. A case in point is Cellucci's address to the Vancouver's business community Friday night where he won support for his excellent suggestion North America must become more energy independent. By not being so dependent on the Middle East for energy, the economies of the United States and Canada would be much better off, the ambassador suggested. And one of the best places to start at developing energy independence is Western Canada, he said. "It is clear that we must reduce dependence on Middle Eastern energy," Cellucci told about 200 delegates to the Vancouver Board of Trade. "It is clear that the economies of the United States and Canada are inextricably linked. "Therefore, we must make sure that energy is available to keep the economies of both of these countries growing." Cellucci gushed about the massive oil and gas reserves as well as the abundant sources of hydro in British Columbia. He praised the untapped resources in the Northwest Territories and the Yukon before moving on to Alberta. "The tar sands of Alberta offer huge potential," Cellucci said. "There's more reserves there of oil than in Saudi Arabia." On the surface, this all sounds wonderful. Billions of dollars will be spent developing Western Canada's energy resources, tens of thousands of jobs will be created, the Canadian and U.S. economies will boom and the two countries will no longer dependent on the volatile Middle East for oil. But, hold it. According to a Canadian Press report, Cellucci is ice cold to the idea of linking sales of energy with the export of other goods, notably softwood lumber. And this at a time when thousands of Canadian forestry workers have been tossed out of work because of sky-high tariffs placed by the Americans. Mr. Cellucci, you can't have it both ways. It's clear your country wants our energy but not our forestry products, even when our workers can produce than more cheaply than your's. Ottawa had better not fall for it. Economic decline causes Quebec secession. Donald E. Nuechterlein, September 1999. Rockefeller Research Scholar at the University of California, Berkeley. “CANADA DEBATES A VARIETY OF DOMESTIC ISSUES,” http://donaldnuechterlein.com/1999/canada.html. Current opinion polls in Quebec show that pro-independence forces are somewhat below the 50 percent margin that would trigger formal negotiations with the rest of Canada on the terms of separation. The current premier, Lucien Bouchard, is a crafty nationalist who will not put the question to another referendum unless he is convinced it will obtain a majority vote. My guess is that if Bouchard has doubts about reaching at least 50 percent in favor of independence, he will first call a provincial election and hope to increase the majority of his Parti Quebecois. That would give him more confidence about winning a referendum. An important factor influencing many Quebeckers will be their degree of satisfaction with the Canadian economy. At present, prosperity reigns in most parts of the country and many Quebec voters may worry that their province will suffer economically if it separates.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
62
2nc Canadian economy impact This sets a global model for separatism. Stephane Dion, 11/21/1997. Canadian Minister of Intergovernmental Affairs. “Canada is Going to Make it After All,” http://www.pcobcp.gc.ca/aia/default.asp?Language=E&Page=PressRoom&Sub=Speeches&Doc=19971121_e.htm. In a recent article in the Boston Globe, Lester C. Thurow of the Massachusetts Institute of Technology wrote that in the new global economy, smaller states are becoming more viable than they once were, so "everyone feels much freer to opt out of big countries and create more homogenous small countries", including Quebec, which "doesn't need the rest of Canada economically." Actually, John McCallum of Canada's Royal Bank estimates that trade between two Canadian provinces is, on average, 14 times greater than trade between a Canadian province and an American state after adjustments are made for the size of the market and the distance involved. Moreover, provinces within Canada benefit from the stabilization provided by equalization and other transfer payments. Borders matter. And clearly there is much more involved in a secession than economics. Secession would be economically bad for Quebec, but it would also be morally wrong and, from a practical point of view, it would be a mess. Secession is an extreme solution, one of the most divisive acts possible in a society. The secession of Quebec would not only break up Canada. It would pit Quebecers against Quebecers, and breed intolerance in what is a very tolerant and open society. In a country as democratic, as rich, as successful and as respectful of diversity as Canada, there is nothing to justify secession. And it would send the wrong signal to the world. Canada has been a model to the world in terms of its ability to accommodate -- and celebrate -- diversity. But secession would set an unfortunate precedent. According to Daniel Elazar of Temple University in Philadelphia, there are currently some 3,000 human groups who are conscious of a collective identity. And yet
there are only 185 states recognized by the UN. The belief that every society with its own distinctive character should become a state could clearly wreak havoc on this planet. You, as Americans, with your burden of responsibilities in the world, especially want Canada to stay united. Quebec is not a failure, Canada is not a failure -- but secession would be. In the next century, when the main challenge of many states will be how to have different populations living together, Canada will be needed more than ever as a model of tolerance and openness. If we fail to preserve our unity, we will send a very sad signal to the rest of the world -- the message that even a country as blessed by fortune as Canada cannot successfully bring together populations with different languages and backgrounds. global nuclear war. Kamal Shehadi, December 1993. Research Associate at the International Institute for Strategic Studies. Ethnic Self Determination And the Break Up of States, p. 81. This paper has argued that self-determination conflicts have direct adverse consequences on international security. As they begin to tear nuclear states apart, the likelihood of nuclear weapons falling into the hands of individuals or groups willing to use them, or to trade them to others, will reach frightening levels. This likelihood increases if a conflict over selfdetermination escalates into a war between two nuclear states. The Russian Federation and Ukraine may fight over the Crimea and the Donbass area; and India and Pakistan may fight over Kashmir. Ethnic conflicts may also spread both within a state and from one state to the next. This can happen in countries where more than one ethnic self-determination conflict is brewing: Russia, India and Ethiopia, for example. The conflict may also spread by contagion from one country to another if the state is weak politically and militarily and cannot contain the conflict on its doorstep. Lastly, there is a real danger that regional conflicts will erupt over national minorities and borders.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
63
2nc—Canadian Economy Impact—US Economy Canada is key to the US economy—they are the largest trading partner. Robert Pastor, June/July 2008. Professor at and Founding Director of the Center for North American Studies at American University. “The Future of North America,” Foreign Affairs, http://www.foreignaffairs.org/20080701faessay87406/robert-a-pastor/the-future-of-north-america.html.
On January 20, 2009, if not before, a new national security adviser will tell the incoming president of the United States that he first two international visitors should be the prime minister of Canada and the president of Mexico. Almost every new president since World War II has followed this ritual, because no two countries in the world have a greater impact economically, socially, and politically on the United States than its neighbors. The importance of Canada and Mexico may, however, come as a surprise to most Americans, as well as to the new president. In the presidential campaign, instead of discussing a positive agenda for North America's future, the candidates have focused critically on two parts of that agenda, the 14-year-old North American Free Trade Agreement (NAFTA) and immigration. And overall, one could conclude from listening to the campaign that Iraq is key to U.S. national security, China is the United States' most important trading partner, and Saudi Arabia and Venezuela supply most of the United States' energy. None of these propositions is true. For most of the past decade, Canada and Mexico have been the United States' most important trading partners and largest sources of energy imports.
U.S. national security depends more on cooperative neighbors and secure borders than it does on defeating militias in Basra.
Canada key to US economy. State Department, September 2007. “Background Note: Canada,” http://www.state.gov/r/pa/ei/bgn/2089.htm. The U.S. and Canada enjoy an economic partnership unique in the world. The two nations share the world's largest and most comprehensive trading relationship, which supports millions of jobs in each country. In 2006, total trade between the two countries exceeded $500 billion. The two-way trade that crosses the Ambassador Bridge between Detroit, Michigan and Windsor, Ontario equals all U.S. exports to Japan. Canada's importance to the U.S. is not just a border-state phenomenon: Canada is the leading export market for 36 of the 50 U.S. States, and ranked in the top three for another 4 States. In fact, Canada is a larger market for U.S. goods than all 27 countries of the European Community combined, whose population is more than 15 times that of Canada. The comprehensive U.S.-Canada Free Trade Agreement (FTA), which went into effect in 1989, was superseded by the North American Free Trade Agreement among the United States, Canada and Mexico (NAFTA) in 1994. NAFTA, which embraces the 443 million people of the three North American countries, expanded upon FTA commitments to move toward reducing trade barriers and establishing agreed upon trade rules. It has also resolved long-standing bilateral irritants and liberalized rules in several areas, including agriculture, services, energy, financial services, investment, and government procurement. Since the implementation of NAFTA in 1994, total two-way merchandise trade between the U.S. and Canada has grown by 250%, creating many new challenges for the bilateral relationship. The Security and Prosperity Partnership of North America, launched by the three NAFTA countries in March 2005, represents an effort to address these challenges and others on a continental basis.
Canadian economy key to US economy Clifford Krauss, 10/8/2004. Author of “Inside Central America: Its People, Politics and History.” “Canada Economy Grows Where Others Falter,” New York Times, lexis.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 64 7 week seniors It only takes one look at this city's fast-changing skyline to see that Canada is defying the slowdown throttling much of the world economy. From Vancouver to Regina to Toronto to Montreal, cranes and earth-moving equipment are roaring at a rate not seen since the 1980's, creating high-rise condominiums in city centers, new single-family houses in the ever-sprawling suburbs, and tens of thousands of well-paying jobs. The building boom is a primary reason the frequently underperforming Canadian economy now has the fastest growth rate among the major industrial countries. Government statistics released last week showed that Canada's economy grew at a 5 percent annual rate in July, the 10th consecutive month of improving economic performance. In a new report, the International Monetary Fund forecast growth for the full year at a less torrid 3.4 percent pace, and the same in 2003 -- still, a more robust performance than in the United States. The cheerful statistics, and expectations of a big budget surplus to go with them, amount to a windfall for the governing Liberal Party at a time when infighting and cabinet scandals have forced Prime Minister Jean Chrétien to drop thoughts of running for a fourth term. He is due to step down as party leader in early 2004, but his general economic policy line has support from several of his potential Liberal successors. With 400,000 new jobs created over the last year, and unemployment declining, the Liberals expect to remain strong with their working-class voter base. They also expect to reverse the cutbacks of the 1990's and expand services. Just last week Mr. Chrétien announced that next year's budget would include new spending on urban low-income housing, health care and transportation, national parks, education and programs to aid the impoverished Indian population. The spending should ease the way for the next Liberal leader to defeat a badly divided opposition. Canada's good economic fortunes may also prove
helpful to the slowing United States economy, given that Canada buys 25 percent of all American exports.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
65
Xtn—oil sands key to Canadian economy Oil sands are key to the canadian economy Derek Brower, 1/31/2008. “Alberta’s Oil Rush,” Prospect Magazine, Lexis. But one effect of the $100 barrel is to make alternative sources of energy-and of oil-more economically viable. The discovery of the giant Tupi oil field off the Brazilian coast last November is a perfect example. Drilling in deep water to look for oil in the "pre-salt," a geological formation that has scarcely before been tapped, was only undertaken because the current high price of oil makes such expensive operations attractive to companies. Tupi could be the tip of a very large offshore field. But the biggest beneficiary of the high oil price has been Canada and its oil sands. As an unconventional source, the oil sands were until recently simply too costly to bother with. As recently as the mid-1990s, extracting a barrel of oil from the tar cost around $35. When oil prices were hovering around $10 a barrel at the end of the last century, the few companies involved in the oil sands were making a loss. That forced the developers to cut their expenses and become more efficient. This wasn't easy, because extracting the bitumen from beneath the muskeg and turning it into something that fuels an engine or makes a plastic is an expensive and energy-intensive process. For now, most of the tar extraction takes place near the surface, which allows it to be mined. Huge cutters tear up the topsoil, using enough electricity to power a city of 40,000. The tar beneath is dumped into 400-tonne trucks that haul their load to nearby plants where the oil sand is mixed with hot water to create a slurry, which is then separated into sand, water and bitumen. Refineries can't handle the heavy bitumen, so first it goes to upgrading plants where its molecules are reorganised and some of the impurities-like the sulphur that gets left to rot under the open sky-are removed to leave synthetic crude. It is this "syncrude" that is then exported and refined into oil products like fuels and plastics. The oil companies have whittled this process down to one that costs them $15-20 a barrel. And with long-term oil price futures trading at over $80 a barrel, the oil sands are now very
profitable. Every major oil company is under pressure to replace its reserves. Outside of Canada, that has become tough. Operating in other big oil-producing countries has in recent years become far riskier politically, as the balance of power has shifted away from "big oil" to energy-rich governments. So now the companies are flocking to Alberta. BP, the only large western oil company that seemed wary of the oil sands, recently joined the rush. Shell has bought control of its local subsidiary. The companies that operate in the oil sands say they will spend some $100Cbn (roughly £50bn) there in the next decade. That should increase output to 4m barrels a day in 2020, compared with 1.3m barrels a day now. The charge to the oil sands has turned Fort McMurray, once a trading post but now the centre of the boom, into the kind of frontier town northern Canada last saw during the days of the Klondike gold rush. The population of "Fort McMoney," as some call it, could grow to more than 120,000 in the next few years from around 40,000 in the early 1990s. For a town where the temperatures range from -40 degrees Celsius on a winter's day to +40 in the summer, that is some achievement. The climate isn't the only thing that is extreme about "Murray." "It gets wild," one local told me when I was there. "Guys spend hundreds of dollars a night on booze and drugs. And they fight." Casinos and prostitutes have followed the money to the city. Property prices are among the highest on the North American continent-if somewhere to live can be found at all. Drive for long enough on the clogged roads around the oil sands and you'll see tent camps and barracks housing thousands of "roughnecks" who have doubled their money by coming to Fort McMurray. Alberta is quickly turning into a petro-state. The energy sector directly or indirectly employs one in six workers. Farmers in the breadbasket of the country have dropped dairy and ranching to work in construction. And yet there are still skill shortages. Some oil companies have taken to flying workers in from as far away as Newfoundland, 4,000 km from Fort McMurray. The men stay for a two-week shift before flying home again in the company's charter. The companies have cut runways into the muskeg to land their planes. Alberta is pressing the federal government to relax rules on immigration to feed the talent pool. "We need welders," one executive told me. "Why don't you become a welder?" The consequences of this boom seem scarcely to bother politicians in Alberta. It has always been a boom and bust sort of place, with a more American, laissez-faire culture than most of the rest of Canada. "We're not dirigiste," one minister told me, "but we might have managed this boom differently." The political and business capitals of Alberta-Edmonton and Calgary-are undergoing their own booms. Calgary, once a prairie town whose chief attraction was its proximity to the ski slopes of the Rockies, is now Canada's most dynamic city. Ironically, given its role as the corporate centre of the oil sands, it is also the world's cleanest city, according to the consultant Mercer. Buildings go up with Dubai-like speed. EnCana, one of the giant companies of the sector, has commissioned Norman Foster to design "The Bow," a new 236m-high skyscraper that will be a suitable testament to Calgary's self-confidence. Torontonians still scoff at western Canadians for their backwardness. But the money, power and new immigrants are heading for Alberta, not Ontario. Yet all this brings problems. Calgary is unlikely to stay the cleanest city on the planet for much longer. A grey pall of smog already hangs over Canada's SUV capital. And Calgary's sprawl is spreading across the prairie that lies to its east, north and south; if the city could bulldoze through the First Nations reserve that borders its west, it would. And while small government in Alberta might be good for the oil sands, it isn't getting much infrastructure built. With a $6.8bn budget surplus from oil revenues in 2005, Alberta's then premier, the Falstaffian controversialist Ralph Klein, gave each citizen of the province a $400C "rebate," at a total cost of $1C.4bn. Critics said the money could have paid for a high-speed rail link. Or it could have been invested in the province's rainy-day fund, which stands at around $12bn, compared with Norway's $200bn. There are big issues for Canada itself. As the engine of the country's economy, the oil sands are powering its growth, even if, as the constitution allows, Alberta retains the bulk of the revenues from the sands. The cumulative value to Canada from the oil sands will be $790Cbn by 2020, according to Alberta Energy. Alberta will retain $630Cbn of that.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
66
Xtn—oil sands key to Canadian economy Decline in oil industry will take down the entire Canadian economy. Canadian Press, 1/28/2008. “Canada's economy depends on Alberta oil: Stelmach,” http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20080128/stelmach_oil_080128/20080128?hub=SciTech.
Canada depends on Alberta's oil-rich economy to fuel prosperity and any shut down in the province's oil industry would be felt across the country, says Alberta Premier Ed Stelmach. The Alberta leader was greeted by protesters as he joined other provincial and territorial leaders in Vancouver Monday for Council of the Federation meetings focused largely on climate change. But he was unapologetic. "It's fact,'' Stelmach told reporters. "I'm not saying that in a boastful way.'' Stelmach said he knows Alberta is being singled out by environmental
deep cuts by Alberta would be felt across Canada. "Today, the economy of Canada is dependent in large part on the economy in the province of Alberta,'' he said at a press conference at the end of Monday's meetings. groups but the premiers were told that
Price decline destroys the Canadian economy. The Ottawa Citizen, 4/14/2005. http://www.uofaweb.ualberta.ca/chinainstitute/nav03.cfm? nav03=43258&nav02=43112&nav01=43092.
Canadians had better hope the price of oil stays high and the Chinese economy remains strong, because their economy has become increasingly dependent on both, a new Statistics Canada study suggests. "Canada's surplus in trade in energy is now almost as large as all other resource exports combined, including forestry -- for long our largest export -- food and metals," it said, crediting the surge in world oil prices. Energy now accounts for more than 16 per cent of Canada's exports, more than double the 7.3 per cent in 1998, an increase that has mostly been at the expense of exports of autos, machinery and equipment. Canada is well positioned to profit from soaring energy prices down the road as well, the report said, noting that over the past decade one-third of the investment by firms in Canada has been in the energy sector. "The reliance on energy for such a large part of exports might raise questions about our vulnerability to a collapse in prices, such as for oil in 1986, 1991 and 1998," it said in the report published yesterday in Canadian Economic Observer, its flagship publication.
Canadian exports to the US are key to the Canadian economy—our evidence is specific to US trade Spivak, 8 – Ilya, Comtex News Network, “Trade Record Oil Prices With USDCAD” 5/2, Lexis Why is USDCAD Correlated with the Price of Oil? Historically speaking, the Canadian dollar has been highly correlated with the price of oil, with the two tracking each other with over 80% precision. This is not surprising - Canada boasts the world's second largest oil reserves (after Saudi Arabia). Canada is also the number one supplier to the world's largest oil importer, the United States. As the price of oil goes up, Canadian firms benefit from greater export revenues, improving Canada's trade balance and adding to positive growth in overall national income. The relationship has been particularly notable in USDCAD. This makes sense because the global price of oil is denominated in US dollars . If the Canadian dollar is over 80% correlated with the price of crude, then one would reckon that an appreciation in oil would see an analogous depreciation in USDCAD over 80% of the time. US Slowdown Holds USDCAD in Place as Oil Rallies
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
67
AT: Refineries bad—generic If the US doesn’t boost refinery capability China will—itheir impact turns are non-unique Laureshen, Du Plessis et. al 04 [ CJ-Alberta Energy Research Institute, D- Alberta Energy Research Institute / Alberta Economic Development, CM XU and KH Hung- State Key Laboratory of Heavy Oil Processing, China, Presented at the Canadian International Petroleum Conference-“ Asian-Pacific Markets-A New Strategy For Alberta Oil”, http://www.aeri.ab.ca/sec/new_res/docs/PAPER_2004-017_Final.pdf, June 8-10] Technical solutions are feasible for many of the constraints facing heavy oil and bitumen producers in Alberta, and it is likely that crude production will continue to grow as anticipated. However, the existing market issue is one that can only be solved technically with a major investment by U.S. refiners in new conversion capacity. Even then, it is doubtful that there will be enough refinery space in the U.S. to handle the volumes that are projected from Alberta in the coming 20-30years. One obvious solution is to seek new markets. The rapid economic growth in the Asian-Pacific region, which has a major dependence on Middle East oil, makes countries such as China, Japan, Taiwan and Korea attractive potential markets for Alberta crude.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
68
AT: Refineries bad—pollution Pollution from refineries is inevitable—China has already invested in Canada’s oil industry The Gazette, 2006 (“Criticism of China won't affect trade relations”, November 2006, lexis) "We are being more open, more transparent and more assertive, but we are equally being more aggressive on the trade and investment side of things," Emerson said. "There is no doubt in my mind that China will look after its economic and commercial interests." Relations between the two countries have soured since Harper's election victory in January. After meeting with Chinese President Hu Jintao at the Asia-Pacific Economic Co-operation summit this month, Harper noted that the Chinese aren't accustomed to "frank" discussions with Canadian governments. Still, Hu has said he wants to increase Chinese access to Canadian oil and gas, and Harper hasn't tried to block efforts by foreign companies to acquire Canadian resource companies, such as Switzerland-based Xstrata Plc's takeover of nickel miner Falconbridge Ltd. Canada said last week it would review rules limiting foreign ownership in the country, in a bid to boost investment from abroad. Hu told reporters during a state visit to Ottawa last year that his country wants to invest more in Canada's petroleum industry, to help feed his country's appetite for energy. Some of China's state-owned oil companies have already invested in Canadian producers. Cnooc, China's biggest oil-and- gas company, and China Petrochemical Corp., parent of Asia's largest refiner, bought minority stakes in Canadian energy firms last year. Alberta contains the largest pool of oil reserves outside the Middle East. Pollution inevitable—China has already invested billions in Canadian oil sand mines, increasing the number of refineries Harding, 2005 (Jon, Reporter for the Financial Post, “China’s Sinopec to pump cash into Syneco”, June 1, lexis) CALGARY - China's interest in the oil sands continues to grow as the country's second largest oil producer said yesterday it will invest $105-million and possibly spend billions more helping Calgary startup Synenco Energy Inc. build its $4.5-billion oil sands mine. Sinopec Group and tiny, privately held Synenco have struck a deal to create a joint-venture called Northern Lights Partnership, of which Synenco will retain a 60% interest. Asia's largest refiner of petroleum products would receive 40% of future production from the Northern Lights mining project, which is still at an early planning stage and is expected to produce 100,000 barrels of light synthetic oil a day by 2009. Through its new Calgary-based subsidiary called Sino Canada, the Chinese national would also cover 40% of the costs to develop Northern Lights. "It works out to Sinopec paying $105million for 40% of the resource, which is -- best estimate -- 1.5-billion barrels [recoverable]," said Jim Donnell, Synenco's president and CEO. "We feel very good about Sinopec," Mr. Donnell said. "They operate more than two-dozen refineries in China with a refining capacity of over three-million barrels a day. Each of those facilities have engineers, construction and design expertise. They have rich experience [to offer] as it relates to refining and upgrading." New technologies have reduced or eliminated environmental impacts of processing oil shale Bunger, Crawford et. al 04 [James W. -principal investigator for value-enhancement processing of US and Estonian kerogen oils, Peter M.-consultant in energy technology, policy, and strategic communications in Washington, DC, Harry R. Johnson principal petroleum engineer with Intek Inc., Oil and Gas Journal-“Is Oil Shale America’s answer to the peak oil challenge?” 5th Issue, August 9 In Colorado, Shell Oil Co. is currently testing a proprietary in situ conversion process (ICP), that uses sub-surface heaters to slowly convert kerogen to high yields of high-quality oil and hydrocarbon gases. The ICP process significantly reduces (and in some cases eliminates) the environmental impacts resulting from previous shale oil recovery methods. The process involves no open-pit or subsurface mining, creates no leftover piles of tailings, avoids potential groundwater contaminants associated with combustion, and minimizes unwanted byproducts and water use. Shell believes its technology could be profitable at $25/bbl, once steady-sta production is reached. There may be requirements for other in situ technologies, depending on the resource characteristics. In situ challenges are improved heating technology performance and reliability and, depending on the technology, improved groundwater protection processes.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
69
Xtn—Chinese refineries bad—environment/pollution Chinese oil refineries are comparatively worse for the environment—no regulations BBC, 8 [British Broadcasting Company WorldWide Monitoring, “China's environment watchdog admits it lacks sway to block big oil refinery”—3/4, Lexis] The country's top environmental watchdog has admitted it lacks the power to block the construction of a massive oil refinery near Guangzhou , which experts say will exacerbate air pollution problems in the Pearl River Delta. Yesterday's remarks by State Environmental Protection Administration deputy director Pan Yue follow mounting public concern over the project's impact. The mainland's largest joint venture, the US5bn dollars Sinopec and Kuwait Petroleum Corporation Enhanced Coverage Linking Kuwait Petroleum Corporation project is located in Guangzhou's Nansha district, about 40km from Yuen Long and Macau . Speaking on the sidelines of the annual session of the Chinese People's Political Consultative Conference, Mr Pan said more attention should be given to the environmental impact of the project, listed as a key development by the Guangzhou city government this year. "Environmental factors should be thoroughly considered in the overall planning of any regions and industries," he said. "However, the existing law does not make it mandatory to have an environmental assessment for the whole region before a specific project can be allowed to go ahead." Environmentalists have argued that the project, approved by the National Development and Reform Commission last year, should be halted pending the approval of environmental assessments for the whole Nansha industrial district by Sepa. Fourteen Guangdong People's Congress deputies submitted a motion last month asking the government to halt the project. They said the project, situated in the heart of the Pearl River Delta, would inevitably aggravate air pollution in Guangzhou, Shenzhen , Zhuhai , Zhongshan, Dongguan, Hong Kong and Macau. They cited concerns by mainland and Hong Kong environmentalists over pollution from the Nansha industrial district, and its effects on the air and marine environment in the region. Villagers from the district were relocated in June and refinery construction was widely expected to start this summer, the Economic Observer newspaper reported. The local government has insisted it can minimise possible environmental consequences on neighbouring cities. Mr Pan said the Nansha refinery was just one of many large environmentally sensitive projects, most notably hydropower and petrochemical plants, that Sepa had failed to check due to the lack of legal support. "The most important question we want to ask is whether environmental factors have ever been considered in authorities' approval of large hydropower and urban development projects," he said. He refused to remark on the damming of the Nu (Salween) River in northwestern Yunnan, the longest undammed river in Southeast Asia. Final preparations have started for the construction of one of the 13 proposed dams despite a lack of Sepa approval. On completion, the Nansha plant will be able to process up to 15m tonnes of oil a year and produce 800,000 tonnes of ethylene, used to make plastic. It is scheduled to begin operation in 2010. Chinese oil refineries are worse for the environment—refineries in Costa Rica prove AFP, 7 [Agence France Presse, “China oil refinery threatens Costa Rica environment: groups” 6/17, Lexis] An oil refinery would jeopardize Costa Rica's environment as planned by a Chinese company known as a polluter, environmental groups said Saturday. Oilwatch Mesoamerica and other groups warned that recent agreements between China and Costa Rica included a refinery built by China Petroleum Corporation. "We are studying the history of this company, which has little concern for the environment or human rights, two of President Oscar Arias's causes elsewhere in the world," Oilwatch Mesoamerica director Alicia Casas told AFP. Nobel Peace Prize laureate Arias broke with Taiwan and normalized relations with China on June 1 and followed up with a set of cooperation agreements. Oilwatch Mesoamerica joined with the Federation for the Conservation of the Environment to denounce a large number of accidents they said killed hundreds of people and caused a lot of pollution "through negligence" of the China Petroleum Corporation in the Chinese cities of Cangzhou, Chongqing and Kaixian. "We were surprised that one of the Beijing envoy's first announcements was construction of a mega-refinery, at a cost of billions of dollars," Casas said. She said Arias "has an obsession" with bringing this oil company to Costa Rica.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
70
Refineries Good—Oil Shocks Refineries are vital to preventing oil shocks Leng, 6 – Sunita Sue, Staff writer, The Edge Singapore, “As I Call It: Taxing oil profits is no windfall solution” 5/8, Lexis After the oil shock of the late 1970s, then US president Jimmy Carter pushed through the Crude Oil Windfall Profits Tax Act in 1980. The tax was imposed on the difference between the market price of oil and a government-determined base price. According to a study by the Congressional Research Service, the windfall profits tax was expected to raise more than US$320 billion between 1980 and 1989. However, the government only managed to collect US$80 billion. Worse, the final amount was actually only about half of this because the tax was deductible against corporate income. The study also found that the tax had the effect of decreasing domestic production by 3% to 6%, increasing US dependence on foreign oil sources. Refining bottleneck If left to the market, soaring energy prices will force everyone to moderate their gas-guzzling ways at some point, whether it's buying a smaller car or using less air-conditioning. But that will take time and that's the demand side of the equation. What really needs to come under scrutiny is the supply side -- specifically, the refineries. Oil prices are high because there is too little refining capacity. The US hasn't built a new refinery in years. In fact, since deregulation in 1982, oil consumption has risen by a third while oil companies have reduced refining capacity by a tenth, says the Foundation for Taxpayer and Consumer Rights. Refining is the bottleneck. It needs to be addressed. And while we're there, get rid of those tax breaks and subsidies that the big oil boys enjoy. The extra money could go some way towards making those hybrid cars cheaper. Lack of refinery capacity is driving up high prices Murdoch, 5 [Scott, Staff Writer, Northern Territory News, September, “No Oil Price Relief in Sight,” Lexis] GLOBAL refinery constraints are expected to keep world oil prices at current highs with little relief expected in the next few years. A dour forecast by Abare, the agricultural research agency, found oil consumption rose by 3.7 per cent in the past year around the world. However, despite volatility in the spot price market during the past few months, the high is seemingly here to stay. But while the prices are punishing for the consumer, the nation has earned $6.3 billion in the past year through exporting oil. The Abare study found the price has been exacerbated by refining capacity constraints, particularly in the US. The situation is expected to worsen in the wake of Hurricane Katrina. The powerful Organisation of Petroleum Exporting Countries (OPEC) said on the weekend it would consider releasing more oil in a bid to ease the price. However, the cartel is already pumping nearly 2 million barrels per day above its quota. The global impact of the petrol price impost was due to be revealed overnight when the US Fed Reserve met to set interest rates. The central bank was tipped to raise the official cash rate for the 11th consecutive quarter to 3.75 per cent. Abare analyst David Bailey said the current oil shock had now become a supply-side story despite the situation being continually blamed on demand. "The underlying causes of the higher prices over the past few months have been supply disruptions as a result of adverse seasonal conditions," he said. Petrol prices at the bowser have soared to record highs in the past week across the country.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
71
Refineries Good—High Oil Prices High oil prices are a result of low refining capacity, not peak oil. The Pennisula 08 [“Refining capacity shortfalls behind high oil prices” 625http://www.thepeninsulaqatar.com/Display_news.asp? section=Local_News&subsection=Qatar+News&month=June2008&file=Local_News2008062521757.xml] doha • The Deputy Premier and Minister of Energy and Industry, H E Abdullah bin Hamad Al Attiyah, said yesterday the Ras Laffan condensate refinery will be operational next year and plans are afoot to expand the refinery in a second phase. As for the current global oil situation, Al Attiyah said the oil market was well-supplied but refineries were unable to cope with the huge amount of crude. "There is more floating crude oil and no buyers, especially since most refineries in the world lack refining capacity and cannot treat more crude oil," he told reporters at a function in Ras Laffan Industrial City. However, he said there was a big shortage of diesel worldwide because of high demand and limited output from the refineries. There is a need for investing in and providing incentives to build more refineries, the minister said, adding that there was a reluctance to invest in refineries because the margin was very low. Besides, he said, many countries impose a lot of restrictions on building of refineries. "We find that there is more oil in the market but lack of refineries to treat this crude oil and what we are feeling today is a shortage in products but there is no shortage in supply of crude oil," the minister said. Shortage of refineries has caused high oil prices. Reuters 08 (Lin Noueihed, June 17, “Refining shortage cause of high oil price: UAE”, http://uk.reuters.com/article/oilRpt/idUKL17674841200806170) DUBAI (Reuters) - High oil prices are due to a shortage of refining capacity in industrialized nations, the United Arab Emirates Oil Minister Mohammed al-Hamli said in remarks published on Tuesday. "There are not enough refineries to meet growing demand," Hamli told the Gulf News daily."A shortage of refineries is one of the main reasons behind the increasing prices as a result of the policies adopted by industrialized nations not to invest in new refineries due to environmental concerns, while the sector needs substantial new investments." OPEC has consistently said that fundamentals are not to blame and that high oil prices are due to factors beyond its control such as U.S. dollar weakness, speculation and international politics as well as a lack of refining capacity. But concerns over globally rising prices have prompted Saudi Arabia to host a meeting of producers and consumers on June 22 to discuss rising oil. Reports that Saudi Arabia plans to boost output initially helped ease prices but the effect was offset by U.S. dollar weakness, propelling oil to a record high of almost $140 a barrel on Monday The UAE is one of the few members of OPEC with the spare capacity available to boost output, along with Saudi Arabia. In Abu Dhabi to meet Hamli on Monday, British Energy Minister Malcolm Wicks told Reuters that the UAE had not made any promise to boost output. The refinery bottleneck is causing oil prices to be high. Gulf News 08 [Ahmed A. Elewa, “High Oil Prices Cut Refinery Investment”, June 16, http://www.gulfnews.com/business/Oil_and_Gas/10221589.html] A shortage of refineries is one of the main reasons behind the increasing prices as a result of the policies adopted by industrial nations not to invest in new refineries due to environmental concerns, while the sector needs substantial new investments," Al Hamili said. The US has not established any new refineries for more than two decades, while global oil demand is expected to grow by 12.7 million barrels per day, or 15 per cent by the year 2015, according to a report by the British Treasury. "We would welcome the decision by any producing country with extra capacity to increase production, yet this decision lies in the hands of these countries, not for us to decide," Wicks said. "The reason for my visit is to discuss the issue and the likely agenda of Jeddah's meeting." He attributed rising prices to the growing demand from emerging markets, speculation and developments in financial markets.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
72
Refineries Good—High Oil Prices The refinery bottleneck is causing oil prices to be high. Gulf News 08 [Ahmed A. Elewa, “High Oil Prices Cut Refinery Investment”, June 16, http://www.gulfnews.com/business/Oil_and_Gas/10221589.html] A shortage of refineries is one of the main reasons behind the increasing prices as a result of the policies adopted by industrial nations not to invest in new refineries due to environmental concerns, while the sector needs substantial new investments," Al Hamili said. The US has not established any new refineries for more than two decades, while global oil demand is expected to grow by 12.7 million barrels per day, or 15 per cent by the year 2015, according to a report by the British Treasury. "We would welcome the decision by any producing country with extra capacity to increase production, yet this decision lies in the hands of these countries, not for us to decide," Wicks said. "The reason for my visit is to discuss the issue and the likely agenda of Jeddah's meeting." He attributed rising prices to the growing demand from emerging markets, speculation and developments in financial markets.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
73
High Oil Prices Bad—Economy High oil prices are hamper economic recovery. We are headed for a deeper recession. Hallagen 2008 (Liam - Chief Economist at Prosperity Capital Management, Feb 6, The Telegraph, “US staring at double-dip recession as calls for higher interest rates grow,” http://www.telegraph.co.uk/money/main.jhtml? xml=/money/2008/06/01/ccliam101.xml) US consumers - still America's economic engine room - are adjusting to the realities of "$4 a gallon gasoline". Inflation is on everyone's mind. The hope had been that Bush's $150bn emergency tax rebates - which began arriving in bank accounts last month - would provide households with a shot in the arm. But the truth is, even before the rebate has been fully delivered, its impact has been largely offset by inflation. While the US government's positive fiscal boost is a one-off, high oil prices will continue to hobble the world's largest economy for the foreseeable future. Crude prices aren't expected to fall sharply any time soon. So, it won't be long before any positive effect from the tax rebate is completely swamped. The Fed has long been able to lower interest rates despite inflationary pressures. The dollar's reserve currency status has traditionally given the US central bank room for manoeuvre. The world has now changed. So weak is the US currency, so large are the country's debts, and so powerful is this "structural" oil price shock that even an overtly political central bank like the Fed can no longer do what it wants. So this inflation spike will harm the US not only via escalating costs and lower spending power but, as the markets have now reluctantly concluded, by forcing the Fed to raise rates just when the broader economy so badly needs them to fall. In a recent private seminar, I heard Greenspan say: "If we allow inflation to re-emerge, growth rates will slow, living standards will suffer and we could well see US stagflation. And the only way you can truly contain inflation is by raising rates." It doesn't help Bernanke that his predecessor has the brass neck to offer advice he refused to follow himself. But with producer price inflation above 6 per cent and one-year inflationary expectations hitting a record 7.7 per cent last month, US rates must rise. And that's why America's economic turmoil is going to get a lot worse before it gets better. We're looking at a double-dip recession. Recessions affect the global economy – triggering other depressions Stein 02 (Charles, Business Columnist for the Globe , Boston Globe , March 31, Lexis) A coincidence? No way. More than any time in the recent past, the United States is the key player in the world economy. "We are the only locomotive of growth," said Nariman Behravesh, chief economist at DRI-WEFA, a Lexington forecasting firm. America's dominance is a function both of our strength and the rest of the world's weakness. Europe and Japan, for different reasons, aren't in a position to make much of a contribution. How did we get here? And what are the implications of our leadership role? The answer to the first question is easier. America is more critical to the world's economy, in part, because it represents a growing slice of the pie. According to Economy.com, a Pennsylvania research firm, the United States now accounts for 32 percent of the world's economic output, up from 25 percent in 1990, and 24 percent in 1980. The numbers climbed because America grew faster than its competitors, especially in the 1990s, and because the US dollar, the measuring stick, has appreciated in value. The laws of arithmetic dictate that when you get as big as America, you have a major impact on the other players in the game. In some countries that impact is particularly large. In Singapore, for example, exports to the US account for 27 percent of the gross domestic product. In Hong Kong, the comparable number is 28 percent. In Mexico, about 25 percent. Simply put, when we stop buying, these countries stop selling. And growing. Serious economic decline leads to global war and extinction. Bearden 00 (T.E., LTC U.S. Army (Retired), June 24 , “The Unnecessary Energy Crisis: How to Solve It Quickly,” http://www.freerepublic.com/forum/a3aaf97f22e23.htm) History bears out that desperate nations take desperate actions. Prior to the final economic collapse, the stress on nations will have increased the intensity and number of their conflicts, to the point where the arsenals of weapons of mass destruction (WMD) now possessed by some 25 nations, are almost certain to be released. As an example, suppose a starving North Korea launches nuclear weapons upon Japan and South Korea, including U.S. forces there, in a spasmodic suicidal response. Or suppose a desperate China-whose long-range nuclear missiles (some) can reach the United States-attacks Taiwan. In addition to immediate responses, the mutual treaties involved in such scenarios will quickly draw other nations into the conflict, escalating it significantly. Strategic nuclear studies have shown for decades
The real legacy of the MAD concept is this side of the MAD coin that is almost never discussed. Without effective defense, the only chance a nation has to survive at all is to launch immediate full-bore pre-emptive strikes and try to take out its perceived foes as rapidly and massively as possible. As the studies showed, rapid escalation to full WMD exchange occurs. Today, a great percent of the WMD arsenals that will be unleashed, are already on site within the United States itself. The resulting great Armageddon will destroy civilization as we know it, and perhaps most of the biosphere, at least for many decades. that, under such extreme stress conditions, once a few nukes are launched, adversaries and potential adversaries are then compelled to launch on perception of preparations by one's adversary.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
74
Xtn—high oil prices bad—economy High oil prices spur a recession and will continue to a depression. Hargreaves 08 (Steve - CNNMoney.com staff writer, March 7, “$100 oil hurts, just like a recession: Economists, once so dismissive of pricey crude's economic impact, say it's going to hurt,” CNNMoney.com, http://money.cnn.com/2008/03/07/news/economy/oil_recession/?postversion=2008030715) "You have a very significant restraint on consumer spending," said Chris Lafakis, an associate economist at Moody's Economy.com, an economic consultancy. "It acts as a tax would." Lafakis said consumers spend an extra $5 billion each year for each $1 increase in the price of crude. When economists were predicting that oil wouldn't negatively impact the economy, they based their assertion on a price of about $80 a barrel. But if oil stays at $100 a barrel for the next 12 months, consumers will have shelled out an extra $100 billion on oil by next year. That's an extra $100 billion not being spent at the mall, mega-mart or multiplex. "The entire stimulus package could be drained by higher energy costs," Lafakis said, referring to the $120 billion lawmakers will refund to taxpayers in an effort to keep the economy out of recession. "That has the potential to turn a mild recession into something more dark."
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
75
AT: Refineries cause high prices Refineries aren’t responsible for high prices—hardly any money goes to them Leonard, 8 [Andrew, staff writer, Salon.com, “Why gas is so expensive” 5/29, Lexis] The relatively small percentage of the price of a gallon of gas that goes toward refinery profit margins pokes some holes in the notion that environmental regulations -- at least as applied to refineries -- are a primary villain in inflicting high gas prices on the public. According to this theory, which seems to get more media time with every nickel jump in the price of a gallon of gas, "extremist" air quality regulations combined with legal harassment by environmental activists have inhibited refinery owners from building new refineries. Central to this proposition is the idea that the real bottleneck for gas prices is not in the supply of oil, but in the ability to process it and refine the oil into gasoline. An example of how this works came after Hurricane Katrina, when numerous refineries in the Gulf Coast region were knocked out of commission, and the price of gas spiked because the remaining refineries couldn't make up the difference. If environmentalists hadn't prevented new refineries from being built, argued the critics, there would have been enough slack in the system to avoid such oil shocks. It is true that no new refineries have been built in the United States since 1976 and hundreds have closed down. Between 1985 and 1995, laments the California Energy Commission, 10 refineries closed in California alone. It is also true that overall refining capacity is down, in both California and the entire United States. But total production of gasoline is up, nearly 20 percent, since 1976. Instead of building big new refineries, refinery owners closed smaller, inefficient -- unprofitable -- facilities and expanded and improved the production lines at their existing complexes.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
76
Refineries good—gas prices Refineries are key to checking rising gas prices. The Toronto Star, 2007 (Laura Bobak, Refinery woes oil sector's Achilles' heel, July 11, lexis) Refineries are the crucial middlemen in the process by which viscous black sludge is processed into the clear, flammable liquid consumers depend upon to get to work, run errands, transport children and visit family and friends. "Gasoline markets continue to be vulnerable to short-term refinery outages or other supply disruptions and can be expected to remain volatile throughout the summer," Natural Resources Canada said in its June 8 "Fuel Focus" report. Meanwhile, federal statistics show profit margins for refiners are up, as wholesale prices soar as a result of the supply disruptions. But don't be too quick to blame all price hikes on refiners: their profits represent only one small portion of the price of a litre of gas, and they don't always control the factors that lead to increases. After oil arrives at a refinery, it is broken down into basic components through a convoluted process that uses heat, pressure and chemical reactions to create end products such as gasoline, heating oil, jet fuel and diesel fuel. The process is further complicated by the fact refiners must blend, purify and fine-tune gasoline to meet vehicle manufacturers' specifications and government emissions standards. Operating a refinery costs millions of dollars, while building one can cost billions - one reason these massive shiny jungles of piping are few and far between. Refining crude involves heating the oil in furnaces. The resulting liquids and vapours are released into the skyscraper-like distillation towers that are a hallmark of refineries. After separation and purification, they can be revamped into other products. The exact cost of refining oil is competitive information, but Ted Stoner, a vice-president with the Canadian Petroleum Products Institute, says a major component, after the capital cost of the refinery and workers' wages, is the cost of energy to fuel the furnaces. "Refineries are continuously seeking out energy conservation ideas to keep their energy bills at a minimum," Stoner said. When fires or equipment failures disrupt refinery production, the shutdown ripples through the downstream supply chain. Uncertainty about future supplies can add a risk premium to prices, notes Canada's Competition Bureau, and seasonal variations in demand also contribute to price fluctuations. Shortages have resulted in increased wholesale prices from refiners over the last three years - by about six cents per litre in eastern markets and 10 to 12 cents per litre in Western Canada, according to Natural Resources Canada. "Refining margins continue to increase, reflecting the supply/demand imbalance for gasoline across North America this spring," says its report, noting more than 30 distinct events so far this year have reduced refining capacity. "In the face of robust demand, gasoline inventories have been drawn down and wholesale prices have been driven up as markets try to rebalance. These increases reflect the higher costs associated with new fuel specifications, the tighter supply in the west and improved returns for refiners." In the U.S., a spring punctuated by refinery outages caused a gasoline supply crunch, leading to May's record U.S. gasoline prices. Those prices have moderated recently as refineries have come back on line and started producing more gas. Refineries are crucial to prevent sky-high gas prices. Moore, 2005 (Adrian, Ph.D. in Economics, vice president of research at Reason Foundation, Katrina Reveals Gas Price Folly, September 1, lexis) The ongoing fallout from Katrina sheds light on our woeful energy policies, demonstrating that we are so vulnerable that even a temporary shutdown of oil refineries in one corner of the country will have a huge impact on gasoline prices across the country and in California. Why? Supply and demand. And not simply the supply of oil we get from the Middle East, Venezuela, and others. A new oil refinery has not been built in the United States since 1976. During that time, our gasoline use has increased over 25 percent. The nation's 149 existing refineries have been running at maximum capacity trying to meet record demand and, as a result, not only do we import oil, we actually have to import 10 percent of our daily gasoline from refineries overseas. So when Hurricane Katrina or a refinery fire or anything else causes even just a few refineries to shut down for awhile, there is absolutely no excess capacity nationwide to make up the difference, and prices at the pump skyrocket. For the wealthiest, most powerful nation in the world this is a ridiculous situation that will only get worse as our insatiable demand for gasoline keeps growing and refinery capacity falls further behind in the coming years. Just a few new refineries would alleviate the problem and help keep our gas prices lower and steadier.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
77
Refineries good—oil supply Refineries are critical to cushion the US against oil supply disruptions. Furchtgott-Roth 07 (Diana - former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute, May 11, The New York Sun, “Get Pumped,” http://www.nysun.com/opinion/get-pumped/54275/) "Surprises get priced," president of EPRINC, Lucian Pugliaresi, says. He writes, "Rising gasoline demand in the U.S., combined with unscheduled refinery closings, looming strikes, limited spare replacement capacity, longer turnaround times for scheduled maintenance, and refining factors are all contributing." No new refinery has been built in America for 30 years. For those reasons and others, refiners' inventories of gasoline are low. Inventories serve as a cushion against disruptions of supply. So does spare refining capacity, of which there is none. Inventories have declined from February highs, and now stand at 192 million barrels, equivalent to about three weeks of supply, barely above the low point of 190 million barrels that occurred just after Hurricane Katrina. Unforeseen shutdowns have dropped the national average for refinery capacity utilization down to 88% from the usual 93%. Sinclair Oil's refinery in Wyoming is shut for 10 days of maintenance due to a power outage on May 6. It would ordinarily refine 71,500 barrels of oil a day into gasoline, diesel, and jet fuel
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
78
Refineries good—US Canada Relations Energy imports are a key component of U.S.-Canadian relations. Ek and Fergusson 07 – (Carl and Ian F., Foreign Affairs, Defense, and Trade Division congressional researchers, May 15, “Canada-US Relations,” Order code 96-397, http://209.85.215.104/search?q=cache:jkhCWkWD0wJ:www.fas.org/sgp/crs/row/96397.pdf+US+oil+Canada+relations+improve+benefit+importing+tar+sands+good&hl=en&ct=clnk&cd=9&gl=us&client=saf ari) Canada is the United States’ largest supplier of energy — including oil, uranium, natural gas, and electricity— and the energy relationship has been growing. Canada is the world’s seventh largest petroleum producer, and its reserves are believed bysome to be second onlyto those of Saudi Arabia; Canada’s sources of oil include traditional and offshore wells and, increasingly, Alberta’s tar sands. Canada provides 17% of U.S. oil imports and supplies 18% of U.S. natural gas demand. Canada is particularly valued because it is reliable source of energy, a key factor contributing to U.S. economic security — it is not a member of OPEC. The two countries are cooperating on the development of pipeline construction projects. China recently has begun to show increasing interest in Canada’s oil sector, a development that is believed to have “caused some consternation in Washington.” Canada also a net exporter of electricity to the United States, and the North American electricity grid is closely interconnected. Following the August 2003 blackout, the two sides have worked to develop improved standards for electricity transmission reliability. 45 Bilateral Trade Issues. The United States and Canada enjoy the largest bilateral commercial relationship in the world; the U.S. State Department estimates total two-way trade at $1.4 billion per day.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
79
Oil Investment Good—Prices Lack of oil investments will increase prices—turns the case Lowe,0 8 [John; Executive Vice President, Exploration and Production, ConocoPhillips—Before the Select Committee on Energy Independence and Global Warming U.S. House of Representatives, http://www.conocophillips.com/NR/rdonlyres/ B4168205-5A4E-473E-A78D-8F561FC4BD25/0/Markey_Testimony_written.pdf] One of the biggest drivers of global oil prices has been sustained global economic growth since 2004, which led to strongerthan-expected energy demand growth. In fact, real growth in global gross domestic product between 2004 and 2007 of nearly 5 percent per year was about 40 percent higher than the average growth rate since 1980.11 Due to this economic prosperity, between 2004 and 2007 oil demand grew by 2 percent per year, almost twice the rate experienced from 2000 to 2003. Nearly half of the demand growth since 2000 has been in developing Asian nations that have reached a highly energyintensive stage of economic growth. In these nations, rising per-capita income also enables a larger proportion of the population to afford affluent lifestyles similar to those in the United States. Although responsible for only 12 percent of global oil demand growth since 2000, the United States, with just five percent of the world’s population, still accounts for 24 percent of global oil demand.12 A second reason for high global crude oil prices is constraints on expanding conventional supplies, in particular, rising resource nationalism that limits access to resources for development. Figure 3 below shows that in the 1960s, 85 percent of global oil and natural gas reserves were available for direct development by international oil companies, versus only 7 percent today. In addition, rising competition for access to the resources that are open for development has enabled host governments to dictate fiscal terms that are so onerous that publicly traded oil companies cannot economically pursue them. Morgan Stanley estimates that the tax rates of major oil companies have increased from about 30 percent to 45 percent since 2000.13 In some cases, governments change fiscal terms after investments have been made or increase taxes on existing production, even in mature producing areas in otherwise stable countries (Alaska in the United States, and the United Kingdom). Such actions can make it uneconomic to invest the capital required to slow decline rates in existing fields. As mentioned earlier, resource access is also very limited in the United States, where an estimated 40 billion barrels of technically recoverable oil resources are either completely off limits or subject to significant lease restrictions. Similar restrictions apply to more than 250 trillion cubic feet of recoverable natural gas resources.14 Failure to invest in oil refineries exacerbates the energy crisis—turns the case Brettell, 8 [Joe, “FUELING SOLUTIONS TO HIGH GAS PRICES; [1]” US Fed News Service, Proquest, 6/8] A comprehensive energy plan must also include a way to upgrade our energy infrastructure and increase refining capacity. While refinery capacity has been increased by more than 20% since 1985, a new oil refinery has not been built since 1976! This lack of investment in energy infrastructure makes us vulnerable to natural disasters; note the rise in gas prices after Hurricane Katrina or other supply chain problems. According to the U.S. Energy Information Administration, if current domestic refinery expansion plans were allowed, domestic refining capacity would increase by about 800,000 barrels per day, the equivalent of four new refineries, by 2010. While these additional refineries are desperately needed, they are being held up by excessive red tape. Congress needs to fast-track these expansions plans and examine ways to deliver increased supplies of cheaper gas to ease the burden on Colorado families as soon as possible. While tapping our abundant domestic resources and increasing refining capacity are excellent short and mid-term solutions, only the development of safe and reliable alternative fuels, along with a fresh perspective on existing resources such as wind, nuclear and solar energy, will serve as a permanent long-term solution to this problem.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
80
Oil Investment Good—Economy Oil refinery investments are key to the economy PR Newswire, 7 – “U.S. Investment Monitor Shows Large Investments in Energy and Technology Projects Increased Average Project Size to Five-Year High in 2006” 11/6, Lexis The report analyzed major U.S. business investment projects in each state announced during 2006, which had a minimum of $20 million of capital invested or 20 jobs retained or created. The average capital investment per job created or retained rose from $177,000 in 2000 to $324,000 in 2006. The announced new projects included in the study account for $111 billion in total capital investments and 347,000 new and retained jobs in the U.S. in 2006. "Both capital investment and employment drive economic growth and are the focus of state economic development strategies," said Tom Neubig, Director of QUEST. "These investments, which pursue locations with advantageous criteria, serve as indicators of a region's long-term economic growth and competitiveness." The 20 largest projects account for $40 billion of capital investment, more than 30 percent of the total investment in projects included in the USIM. Semiconductor and energy sectors announced 14 of the 20 largest capital investments. Energy projects accounted for half of the 20 largest investments, and represent more than $20 billion in capital investment. Although investments in fossil fuels captured a smaller share of the total energy sector in 2006 than in prior years, the largest 20 projects included five oil refineries, three liquified natural gas terminals and two coal gasification facilities. Federal and state incentive mechanisms, coupled with increased consumer demand for petroleum alternatives, stimulated a significant amount of investment in alternative energy projects. U.S. ethanol production capacity accounted for 57% of alternative energy investments in 2006. "The energy sector continued to reshape the geographic profile of major capital investments as new ethanol facilities attracted investment to the farm belt," said Andrew Phillips, principal author of the study. "Despite this trend toward petroleum alternatives, oil and gas projects in Texas contributed to its first place ranking in 2006." The report also confirms that the U.S. continues to offer attractive investment opportunities for foreign companies. Approximately 26 percent ($29 billion) of capital investment projects in the U.S. were announced by non-U.S. companies. "Globalization has made companies more cost conscious, and the mobility of labor, capital, and consumers makes it easier for companies to locate their operations almost anywhere," said Neubig. "Within the U.S., states are competing to retain and attract capital investments from companies worldwide and must carefully evaluate their state and local tax systems and economic development strategies to remain competitive." Nuclear war Mead ‘92 (Walter Russell, Senior Fellow – Council on Foreign Relations, New Perspectives Quarterly, Summer, p. 30) The failure to develop an international system to hedge against the possibility of worldwide depression- will open their eyes to their folly. Hundreds of millions-billions-of people around the world have pinned their hopes on the international market economy. They and their leaders have embraced market principles-and drawn closer to the West-because they believe that our system can work for them. But what if it can't? What if the global economy stagnates, or even shrinks? In that case, we will face a new period of international conflict: South against North, rich against poor. Russia. China. India-these countries with their billions of people and their nuclear weapons will pose a much greater danger to world order than Germany and Japan did in the 1930's.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
81
Canadian Oil Sands Good—US Oil Supply Oil refinery investment for making use of Canadian resources is high now—this will create a sustainable basis for future oil Edmonton Journal, 6 “Oil futures a safe investment for young workers: This is not a sunset industry, energy minister says” Gordon Jaremko, The Edmonton Journal. SECTION: ALBERTA OIL & GAS REPORT; Pg. E1, Lexis The plan will spell out a strategy for making the most of Alberta oil, natural gas, coal, electricity and renewable energy, including wind and sunshine, the minister said. Melchin said youth will be sent a message: "This is a great, long-term industry. So go to school and get the skills to be part of it, and do not be fearful it's a sunset industry." High priority will be given to value-added development by encouraging investment in oilsands upgraders, refineries and petrochemical projects, Melchin indicated. The policy will try to repeat, in fields such as fuels and chemical manufacturing, the province's success in the 1990s of stimulating oilsands projects by deferring provincial royalties until construction costs are paid off. "We want to challenge industry," Melchin said. "We need to look at the tax, royalty and regulatory framework to make sure it signals to industry what we want to facilitate." Visiting official delegations from the world's hottest oil growth market, China, have already been firmly told Alberta does not want to be only a source of raw, discount-priced bitumen for other countries' energy and manufacturing industries, Melchin said. Sources of encouragement to think big have included the traditional customer for about 60 per cent of Alberta production: the United States. Expectations are high and rising in Washington, D.C., where the province figures prominently in annual forecasts of global oil supplies by the U.S. Department of Energy's economic research arm. Three years after the U.S. Energy Informatio n Administration officially accepted Alberta's oilsands reserves count of 175 billion barrels, the forecast for the province's production is improved. As the second-largest economically recoverable oil stockpile in the world after Saudi Arabia's legendary reserves, the northern
Canada will stand out as the world's fastest growing oil producing country if annual average oil prices stay at $50 US a barrel or more, EIA 20-year global projections indicate. Canadian oil output is forecast bitumen is now rated as likely to be well tapped due to the 116-per-cent jump in annual average oil prices to $57 US per barrel for 2005 from $25.90 in 2001.
to hit 6.4 million barrels a day by 2025, up 120 per cent from about 2.9 million. Canada climbs world oil rankings from twelf th-biggest producer to fourth, after the former Soviet Union (with a forecast 19.6 million barrels daily in 2025, up 75 per cent), Saudi A rabia (11 million, up 20 per cent) and the U.S. (11 million, up 18 per cent). "The upward movement is definitely in the oilsands," EIA oil market analyst Dan Butler said in an interview. "There is a lot of optimism." Oil in the $50 range has emerged as the agency's most likely reference case forecast, although $90 is rated as possible if consumers ignore price hikes and demand continues to outstrip production growth. A price decline is also plausible before 2010 if conservation spreads at the same time as about 5.5 million barrels a day of new production starts from projects in Africa, the Caspian Sea region and the North Sea, Butler said. But the fall is expected to be gentle by historical standards, to $29 a barrel instead of the $10-to-$21 industry hardship range in which oil stagnated in between 1986 and 1999. At a winter conference, oilsands developers said their projects are built to stay profitable even if markets dip below $30. American forecasters also acknowledge an
Canadian supplies are dependable. "There are not many safe, predictable places in the oil world like Canada," Melchin said in describing Alberta's message to the U.S. "That makes us unique. We are probably one of the prime places on the planet to look for future growth." American forecasters also rate Africa and Central and South America as capable of production increases exceeding 100 per cent over the next 20 years because their oil industries are just developing. But as in the Middle East, the regions' political risk clouds the industry and investment outlooks. The oilsands spell the prospect of reduced American oil dependence on the Middle East. "We recognize your reserves. You are second after Saudi Arabia. Iraq is no longer second," Butler said. "Certainly from the security aspect the U.S. is interested in, that's a good thing. "Volumes of oil in your neighbour's yard are a lot more important than the volumes that are over in the Persian Gulf," Butler said, adding that Washington is also heartened by prospects of Mexican growth. Canada is already the top U.S. import source. American purchases of Canadian oil and refined products averaged more than 1.9 million barrels a day in 2005, which was about 16 per cent of total U.S. imports and well ahead of second-place Saudi Arabia's 1.5 million barrels daily. energy trade and investment message from Melchin and Alberta's envoy in Washington, former provincial energy minister Murray Smith:
Canadian oil sands are crucial to US oil supplies Lowe, 08 [John; Executive Vice President, Exploration and Production, ConocoPhillips—Before the Select Committee on Energy Independence and Global Warming U.S. House of Representatives, http://www.conocophillips.com/NR/rdonlyres/ B4168205-5A4E-473E-A78D-8F561FC4BD25/0/Markey_Testimony_written.pdf] Heavy oil The Canadian oil sands are projected to become an increasingly important source of oil for the United States, particularly considering recent declines in heavy oil production in Mexico, Venezuela and California. The Canadian oil sands are projected to approach 20 percent of U.S. oil supplies by 2020.8 ConocoPhillips has a leading land position in the Canadian Athabasca oil sands and is actively investing to produce this oil, and then transport it to the United States for processing at our refineries. We have access to over 15 billion barrels of net potential oil resources, and plans are in place to increase our net production to about 400,000 barrels per day over the next decade. In 2008 alone, we are spending $900 million in development capital on the Canadian oil sands.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
82
Canadian Oil Shales Good—Dependence Canadian oil shale eliminates mid-East dependence and lowers prices. The Heritage Foundation 07 [ Daniel Fine PhD., “Oil Shale: Toward a Strategic Unconventional Fuels Supply Policy”, March 8, http://www.heritage.org/Research/EnergyandEnvironment/hl1015.cfm] The national security argument, or the energy security argument, centers on foreign oil import dependency. If shale is commercialized by 2012, we can, under production from Colorado alone, eliminate dependency on Middle East oil by 2020. The President wants to lower it by 20 percent by 2017. Shale production will eliminate it altogether, and that dependence is roughly 2.3 million barrels a day. The projection is that when it is commercialized, with the ramp-up that will occur, and with everything favorable—that is, world price—we would be at 2 million barrels a day, or the objective of the Department of Energy in the shale process. Currently, we're getting 2.2 million barrels a day from the entire Middle East: 19 percent of our total imports. Our major sources of imports are Canada and Mexico—that is, North America—and oil shale would expand a North American domestic energy source, which minimizes and reduces foreign oil dependency with GDP benefits to the American people. Some of the projections are that when shale is commercialized in the next three to five years, the market price will decrease at least $5 a barrel. That's conservative, but that depends on supply and demand worldwide and the growth of economies worldwide. Oil shale will eliminate foreign oil dependence Fine, ’07 (Daniel, co-editor of Resource War in 3-D: Dependence, Diplomacy and Defense, “Oil Shale: Toward a Strategic Unconventional Fuels Supply Policy,” The Heritage Foundation, April 26, http://www.heritage.org/Research/EnergyandEnvironment/hl1015.cfm, Accessed 06-30-08) How long can oil shale last? There is enough shale to sustain United States consumption of crude oil easily through 2120. One of the arguments in the energy security debate has been foreign oil import dependence. Some elements of the national security community in Washington have joined the alternative fuels community, the biofuels community, under the notion that we are dependent upon potentially hostile supply sources after 9/11, which could be disrupted or politically manipulated. The national security argument, or the energy security argument, centers on foreign oil import dependency. If shale is commercialized by 2012, we can, under production from Colorado alone, eliminate dependency on Middle East oil by 2020. The President wants to lower it by 20 percent by 2017. Shale production will eliminate it altogether, and that dependence is roughly 2.3 million barrels a day. The projection is that when it is commercialized, with the ramp-up that will occur, and with everything favorable—that is, world price—we would be at 2 million barrels a day, or the objective of the Department of Energy in the shale process. Currently, we're getting 2.2 million barrels a day from the entire Middle East: 19 percent of our total imports. Our major sources of imports are Canada and Mexico—that is, North America—and oil shale would expand a North American domestic energy source, which minimizes and reduces foreign oil dependency with GDP benefits to the American people. Some of the projections are that when shale is commercialized in the next three to five years, the market price will decrease at least $5 a barrel. That's conservative, but that depends on supply and demand worldwide and the growth of economies worldwide.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
83
Canadian Oil Shales Good—Dependence Oil shale solves US energy independence for the next 400 years. Henry, 07 (Darrell Henry, contributing editor, Western Business Roundtable. “Oil Shale: The Future of U.S. Energy Security” 11-16-07. http://www.redorbit.com/news/science/1146906/oil_shale_the_future_of_us_energy_security/index.html) Total world resources of oil shale are estimated at 2.6 trillion barrels of oil, with the Green River formation in Colorado, Utah and Wyoming containing an estimated 1.2 trillion to 1.8 trillion barrels- the largest deposits in the world. Even by conservative estimates, there are 800 billion barrels of recoverable oil from oil shale in the area, an amount three times greater than the proven oil reserves of Saudi Arabia. INCREASED DOMESTIC ENERGY SECURITY Energy independence is essential to preserve America's economic strength and national security. A recent report by the U.S. Department of Energy is the latest reminder that reducing our dependence on foreign imports of oil and refined products is essential to achieving the energy security objective. Import reductions can be achieved in two fundamental ways: by reducing demand for oil through conservation and efficiency, and increasing production of fuels from domestic resources, including alternatives, biofuels and unconventional fuels. Oil shale has the potential to increase domestic energy security and make the U.S. less reliant on foreign sources of energy. "The disturbing irony is that the world epicenter of anti- American hatred and terror is also the epicenter of our number one source of energy," said former New York Governor George Pataki. In public opinion poll after poll, an overwhelming majority of citizens-nearly 85%-express strong support for weaning the U.S. from increasing foreign energy addiction. They want America to be as energy independent as possible. Soon, new American technologies can help Western oil shale do just that. 21ST CENTURY TECHNOLOGY The greatest challenge to realizing the vast potential of oil shale in Colorado, Utah and Wyoming has been technology, extracting the resource in an economically viable and environmentally responsible way. With U.S. demand for petroleum products topping 20 million barrels per day, oil shale could be used to meet a quarter of that demand-800 billion barrels of recoverable resources, which would last more than 400 years. A new era has begun for Western oil shale. We are closer to finding viable techniques for extracting the resource in an economically feasible and environmentally responsible way, with cutting-edge research and development under way by private companies in the region. Oil shale must be mined and processed to generate oil similar to that pumped from the ground, but extracting oil from oil shale is more complex than conventional oil recovery and historically, more expensive. There are several methods to extract oil from shale; some are advancements to traditional techniques while others are being tested for the first time in the Green River formation. Some companies are using new technology to improve on the traditional method of accessing oil shale. Oil shale is first mined and then heated to a high temperature (retorting); the resulting liquid is then separated and collected. An alternative experimental process is referred to as "in-situ retorting." This involves heating the oil shale while it is still underground and then pumping the resulting liquid to the surface. Shell Oil Co. has U.S. Bureau of Land Management research and development leases and is moving stage-by-stage to prove up and resolve the issues around extraction of shale through a proprietary process known as "thermally conductive in-situ conversion." Shell has carried out a small field-test, the Mahogany Demonstration Project South, on its private property in Rio Blanco County, Colorado, using an in-ground heating process to recover oil and gas from the shale formation. The process involves heating underground oil shale using electric heaters placed in deep vertical holes drilled through a section of oil shale. The volume of oil shale is heated during a period of two or three years until it reaches 650[degrees]F to 700[degrees]F, at which point oil is released from the shale. The released product is gathered in collection wells positioned within the heated zone. The field results have given confidence in Shell's insitu conversion process. A commercial decision on using this technology is anticipated early in the next decade, though possibly later depending on the sequence and outcome of research activities. THE EFFECT OF EPACT 2005 Without the oil-shale provisions in the Energy Policy Act of 2005 (EPACT 2005), federal oil shale land would remain unavailable to the private sector, as it has since 1930 when President Herbert Hoover issued Executive Order No. 5327, withdrawing oil shale from leasing. Even though President Harry S. Truman issued Executive Order No. 10355 in 1952, authorizing the Secretary of the Interior to rescind the Hoover order and lift the moratorium, to date it has not been lifted. (Limited leasing agreements in the 1970s were "prototypes" constructed so as not to have the effect of lifting the moratorium.) With EPACT 2005, Congress provided clear direction in federal energy policy by instructing the Department of the Interior to develop a commercial leasing program and lift the leasing moratorium. With the exception of Shell, which is operating on private property, there has been no significant money put into oil- shale development on federal land since the prototype program in the 1970s. EPACT 2005 was passed in August 2005, prior to the deadline for application of the leases in September 2005, and it is generally agreed among applicants and observers that it was the passage of EPACT 2005 and the prospect of obtaining additional contiguous acreage that generated enthusiasm for the experimental lease applications. Some members of Congress wish to restore the barriers that have been in existence for nearly a century. If Congress succeeds in re- enacting barriers, we can expect the following: * America's commercial oil-shale production will continue to be sidelined until the federal government provides clarity in its regulatory regime and leasing program; * industry, and, more importantly, Wall Street, will perceive the proposed legislation as hostile to oil shale. This is a dangerous direction and could slow or halt any investment until favorable government policy is expressed; * current lessees are likely to be discouraged from making large investments. In the case of the Utah lease, the 5,120-acre preference may not be sufficient to support a full-scale operation. Without a clear path to
* loss of oil shale as one of our domestic resources will exacerbate a future supply crisis. As we've seen from hurricanes Katrina and Rita in 2005 and the conflicts in the Middle East, the U.S. is highly vulnerable to supply disruptions, and with continued competition for the world's oil supply from China, India and other burgeoning economies, there is some urgency to begin the process. development, investors prudently will likely hold back from investing further in oil shale; and
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
84
Canadian Oil Shales Good—Dependence Oil shale development will eliminate energy dependence by 2020. Fine, 07 (Daniel Fine, Ph.D., Co-editor of Resource War in 3-D: Dependence, Diplomacy and Defense, lecture at the Heritage Foundation. “Oil Shale: Toward a Strategic Unconventional Fuels Supply Policy” 4-26-07. http://www.heritage.org/Research/EnergyandEnvironment/hl1015.cfm) How long can oil shale last? There is enough shale to sustain United States consumption of crude oil easily through 2120. One of the arguments in the energy security debate has been foreign oil import dependence. Some elements of the national security community in Washington have joined the alternative fuels community, the biofuels community, under the notion that we are dependent upon potentially hostile supply sources after 9/11, which could be disrupted or politically manipulated. The national security argument, or the energy security argument, centers on foreign oil import dependency. If shale is commercialized by 2012, we can, under production from Colorado alone, eliminate dependency on Middle East oil by 2020. The President wants to lower it by 20 percent by 2017. Shale production will eliminate it altogether, and that dependence is roughly 2.3 million barrels a day. The projection is that when it is commercialized, with the ramp-up that will occur, and with everything favorable—that is, world price—we would be at 2 million barrels a day, or the objective of the Department of Energy in the shale process. Currently, we're getting 2.2 million barrels a day from the entire Middle East: 19 percent of our total imports. Our major sources of imports are Canada and Mexico—that is, North America—and oil shale would expand a North American domestic energy source, which minimizes and reduces foreign oil dependency with GDP benefits to the American people. Some of the projections are that when shale is commercialized in the next three to five years, the market price will decrease at least $5 a barrel. That's conservative, but that depends on supply and demand worldwide and the growth of economies worldwide. There's been a great deal of excitement about biofuels, and as you know, in Mexico and New Mexico and Arizona, the prime base for a staple tortilla is white corn. Because of the biofuels investment, U.S. farmers are beginning to turn their crops from food to fuel, and white corn has almost disappeared from the market. Even though Mexico has a NAFTA quota of 460,000 tons a year, Mexico is not getting it, so the price of tortilla corn in Mexico has had people demonstrating in the street and has caused low-income families difficulties in buying daily bread. I introduce that in contrast to the notion that we have a resource that has no impact whatsoever on food supply. Canadian oil shale eliminates mid-East dependence and lowers prices. The Heritage Foundation 07 [ Daniel Fine PhD., “Oil Shale: Toward a Strategic Unconventional Fuels Supply Policy”, March 8, http://www.heritage.org/Research/EnergyandEnvironment/hl1015.cfm] The national security argument, or the energy security argument, centers on foreign oil import dependency. If shale is commercialized by 2012, we can, under production from Colorado alone, eliminate dependency on Middle East oil by 2020. The President wants to lower it by 20 percent by 2017. Shale production will eliminate it altogether, and that dependence is roughly 2.3 million barrels a day. The projection is that when it is commercialized, with the ramp-up that will occur, and with everything favorable—that is, world price—we would be at 2 million barrels a day, or the objective of the Department of Energy in the shale process. Currently, we're getting 2.2 million barrels a day from the entire Middle East: 19 percent of our total imports. Our major sources of imports are Canada and Mexico—that is, North America—and oil shale would expand a North American domestic energy source, which minimizes and reduces foreign oil dependency with GDP benefits to the American people. Some of the projections are that when shale is commercialized in the next three to five years, the market price will decrease at least $5 a barrel. That's conservative, but that depends on supply and demand worldwide and the growth of economies worldwide.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
85
Canadian Oil Shales Good—Economy Developing the oil shale industry would have huge economic benefits. Henry, 07 (Darrell Henry, contributing editor, Western Business Roundtable. “Oil Shale: The Future of U.S. Energy Security” 11-16-07. http://www.redorbit.com/news/science/1146906/oil_shale_the_future_of_us_energy_security/index.html) Development of this vast domestic resource could supply the U.S. energy needs for up to 400 years. This presents an opportunity to improve the national energy security position and reduce the instability caused by dependence on foreign sources of energy. Oil shale's economic benefits would be substantial, not just to our impacted communities, but to American consumers at large. Based on a 3-million-barrel-per-day production rate, estimates are the industry would generate: * $20 billion annually in revenues through lease bonus payments, royalties on production and corporate income taxes. Roughly half of those profits would likely go to federal, state and local governments; * several hundred thousand jobs in direct industry employment, plus the associated ripple effect; and * an estimated 3% to 5% decline in, world oil prices, which would benefit consumers and business users in the U.S. by about $15 billion to $20 billion a year.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
86
AT: Oil shales not viable Technological progress makes oil shales viable. Fine, 07 (Daniel Fine, Ph.D., Co-editor of Resource War in 3-D: Dependence, Diplomacy and Defense, lecture at the Heritage Foundation. “Oil Shale: Toward a Strategic Unconventional Fuels Supply Policy” 4-26-07. http://www.heritage.org/Research/EnergyandEnvironment/hl1015.cfm) Why should we not call shale an official strategic fuel in the United States, and why not commercially develop it in a most aggressive way? The technology issue is moving significantly in terms of progress. For example, one major development is the Shell Oil project in Colorado. Shell has established some leadership; it has been in Colorado for 30 years. It has invested, in terms of research and development, a significant amount of its own revenues and is moving toward commercialization. Shell has Bureau of Land Management research and development leases and is moving stage by stage to prove up and resolve all the issues around extraction of shale through a proprietary process called the in-situ conversion process. Understanding ICP requires a visualization that eliminates the surface retort heating and disposal of shale rock as a mining-industrial process. Shell is going underground. The refinery of shale will be underground, with almost no surface impact. This is a breakthrough change in technological capability, and it makes shale accessible. Shell is confident that it can recover shale oil with the price of West Texas intermediate oil at around $25 a barrel. Older studies have always argued—again, using the 1970s know-how and data—that surface processing would create prohibitive costs extending to intractable problems of reclamation; and water use in the older studies, as I said, was projected at three barrels of water to one barrel of oil shale oil. However, Shell is going underground into the shale formation with electrical heaters. The U.S. can transition to oil shale production Feulner, ’07 (Edwin J., President of the Heritage Foundation, “Ethanol isn't worth getting pumped up about, but oil shale might be,” March 22, The Heritage Foundation, http://www.heritage.org/Press/Commentary/ed032107a.cfm, Accessed 0630-08) Fortunately, there's another possibility. If scientists can overcome some technological challenges (as well as environmental objections), oil shale has the potential to provide more than a trillion barrels of domestic oil. Dr. Daniel Fine of MIT recently reported that 750 billion barrels worth of oil shale have been discovered so far in Colorado alone. That's enough to power the U.S. economy through 2030. In fact, he says, if we begin full-scale production within five years, we could completely end our dependence on OPEC by 2020. Instead of supporting thugs such as Venezuelan President Hugo Chavez, we could leave them high and dry. Of course, there's a reason the U.S. economy doesn't already run on oil shale: It's difficult to collect and refine. But technology is changing that. Fine points out that Shell Oil has developed a technique that uses underground heaters to transform crude oil shale into burnable petroleum before it's even brought to the surface. This allows it to be extracted with far less above-ground pollution. Meanwhile, Chevron came up with technology that uses significantly less water to cool the refining machinery. That means processing oil shale is becoming environmentally safer and less expensive. And speaking of the environment: These methods of harvesting oil shale force excess carbon back into the ground, so even Al Gore should support them. Plus, they're becoming more cost-effective every year. Fine estimates we eventually could produce a barrel of oil for $25. And, he says, the Defense Department has found that shale actually produces jet fuel that is far better than average.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
87
Canadian Tar Sands Good—Gas Prices Current investments in Canadian tar sand derived oil will help stabilize gas prices Evanoff, 6 [Ted, Knight Ridder Tribune Business News, Proquest, 9/21] Maybe you never think of where it comes from, but there's probably West Texas sweet in your car's gas tank, or Saudi light. And soon you may have Alberta tar. Many Indianapolis drivers will burn more gasoline made from Canadian tar sand, a move that might help stabilize pump prices a bit, once London oil giant BP upgrades a massive oil refinery near Gary. The company's BP America unit Wednesday pledged $3 billion over four years, starting in 2007, to reconfigure its 1,400-acre plant at Whiting for more Canadian crude while vulnerable deliveries diminish from Texas and the Middle East. Known as BP Whiting, the largest U.S. inland refinery will be reworked to run on 90 percent Canadian heavy crude piped 1,600 miles to Northwest Indiana from near Fort McMurray, Alberta. "Energy security is one of the key elements," said BP Whiting spokesman Tom Keilman. "This will give us more capability to refine more crude from the oil sands." Canada, already the United States' largest crude supplier, is stepping up output at a time when Americans nationwide have grown more concerned about energy independence. Texas' oil reserves are tapping out. And U.S. supplies can appear at risk from Middle East political turmoil as well as the storm- prone Gulf of Mexico. After Hurricanes Katrina and Rita lashed the Gulf Coast last year, gas prices shot above $3 a gallon nationwide. Those record gasoline prices, though, have set off an oil boom in Canada's Alberta province. Oil geologists say some 85,000 square miles of sand beneath forests of spruce and fir are loaded with oil tar. It's the largest proven oil reserve after Saudi Arabia. Plans are afoot to invest as much as $110 billion on the oil sands. In terms of spending, it would be the world's largest industrial development. It would bring sand to the surface, remove the grit, bury waste in a landfill and pump the resulting crude oil to refineries. China is considering its own pipeline from Alberta to Canada's Pacific coast, though the United States is Alberta's largest customer. Daily, about 1.7 million barrels of Canadian crude enter the United States, or about 9 percent of total U.S. consumption. Developments now planned in Alberta could double Canada's flow to the United States. If that happens, Canada would sell more oil to the U.S. than Saudi Arabia and Venezuela combined. Once the Whiting project is completed, Keilman said, Canada will supply up to 90 percent of BP Whiting's crude, compared with about 30 percent now. The plant daily refines 16 million gallons of petroleum products, including about 9 million gallons of gasoline. The new equipment will raise the 1,300-employee refinery's gasoline output about 15 percent, Keilman said, and could help ease the price spikes that result from shortages in crude supplies. BP Whiting will continue output over the next four years without a break while the new technology is installed, Keilman said. "It doesn't mean Indianapolis is going to be in a better position than Chicago if there's a catastrophe that interrupts oil supplies from the Gulf," said Maggie McShane, executive director of the Indiana Petroleum Council, a trade group. "It does mean our reliance as a region on a source of petroleum is better."
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
88
Canadian Tar Sands Good—AT: Environment Tar sands would drastically improve US energy security – environmental costs are exaggerated. Owens, 08 (Mackubin T. Owens, Adjunct Fellow of the Ashbrook Center, a professor of national security affairs at the Naval War College in Newport, RI, and editor of Orbis, the journal of the Foreign Policy Research Institute.) World demand for oil continues to grow—and is likely to keep on climbing. While economic growth in China and India is the source of much of this increase in demand for oil, US demand is also part of the equation. Americans currently consume about 20 million barrels of oil daily, of which about 60% is imported. The Energy Information Administration (EIA) expects imports to reach 70% by 2025. The reason: domestic oil production is projected to fall 17% by 2025 (assuming no production from the Arctic National Wildlife Reserve). To make matters worse, the world’s spare production capacity is at its lowest level in 30 years, equal to only one percent of world demand, making the market extremely sensitive to political and economic uncertainty, hurricanes, and terrorism. This situation threatens US energy security. Energy security is not to be confused with "energy independence." While energy independence is a pipe dream, energy security is achievable. The key to enhanced energy security is an increase in the supply of energy. Unfortunately, energy security is often sacrificed because of environmental concerns. A case in point is the exploitation of "oil sands," geologic formations containing deposits of bitumen (heavy crude oil)—a viscous, solid or semisolid form of crude oil that does not easily flow at normal ambient temperatures and pressures, making it relatively difficult and expensive to process into gasoline, diesel fuel, and other products. Canada possesses substantial oil sands. Indeed, Canada’s oil sands reserves are approximately equal to the world’s total reserves of conventional crude oil. According to oil industry analysts, 174 billion barrels of crude oil is trapped in the oil sands of Alberta. Since Canada is our No. 1 source of imported oil, the Alberta oil sands constitute a vast, secure, and reliable supply of crude oil, which also creates thousands of well-paying jobs. Currently, about 1 million barrels per day are piped from Alberta to U.S. refineries in the Midwest and Gulf Coast, and several refineries and pipelines are investing heavily to increase their refinery and pipeline capacity so they can use more of the Canadian oil sands, with planned expansion to three million barrels per day by 2015. Such investments will increase America’s energy security and reliability, reducing the risk of supply disruptions. But the exploitation of oil from oil sands oil typically requires enhanced extraction and refining methods, which has led environmental groups and some public policy makers to raise concerns about the environmental consequences both of the Canadian oil sands mining process and expansion of petroleum refineries capable of refining crude oil from oil sands, particularly in the Midwest. Arguing that expanding the use of oil from oil sands will result in the destruction of the Canadian Boreal Forest and increase greenhouse gases, environmental groups have issued challenges to the environmental permits required for oil sands extraction and refinery expansion. Such environmental challenges to the expanded use of oil sands pose a real danger to U.S. energy security, while doing little if anything to reduce global greenhouse emissions. Since refining oil sands is capital intensive, refiners need to have certainty regarding the availability of the resource. Such regulatory roadblocks make it less likely that oil companies will make the necessary investments to exploit this vast resource. In addition, challenges by environmentalists are likely to be used as precedents for hampering development of tar sands in California and the substantial deposits of oil shale in the American West. The fact is that it is possible to extract, refine, and transport crude oil from oil sands in an environmentally responsible manner. Oil companies have developed mitigation measures that conform to permit constraints based on current rules and regulations. The public must understand that the additional mitigation measures demanded by environmental groups may make the exploitation of oil sands less economically viable, undermining US energy security. Of course, environmental concerns are valid, but they need to be placed in proper context. All economic decisions involve "trade-offs." Unfortunately, environmentalists often act as though the value of a pristine environment is infinite, permitting no trade-offs at all. When such a view takes hold in policy debates, the consequences can be severe. Environmental concerns have become a centerpiece of the US political economy, but they must be balanced against the requirement for affordable energy and energy security.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
89
DA Turns case—energy prices Disad turns the case: production of refining capabilities is vital to lowering energy prices overall Lowe, 08 [John; Executive Vice President, Exploration and Production, ConocoPhillips—Before the Select Committee on Energy Independence and Global Warming U.S. House of Representatives, http://www.conocophillips.com/NR/rdonlyres/ B4168205-5A4E-473E-A78D-8F561FC4BD25/0/Markey_Testimony_written.pdf] We must point out that as our nation develops policies to increase supplies of renewable and alternative energy supplies, we must not overlook the vital need to also encourage the development of conventional supplies of oil and natural gas. To focus strictly on one and not on both, is certain to create supply problems in the near future. As Congress periodically debated the architecture of a national energy policy, the industry has consistently stressed the need for more resource access. Gaining this access is, in fact, critical to lowering energy prices. Yet, domestic access restrictions are increasing. To illustrate this point, during the most recent energy bill debate, the House of Representatives voted to ban drilling in Colorado’s Roan Plateau Basin, a potentially prolific natural gas producing area, further decreasing the areas of the U.S. accessible to resource development. Development of domestic natural gas offers the dual benefits of improving U.S. energy security and lowering carbon dioxide emissions. We cannot see a viable policy solution to either challenge without an increased role for domestic natural gas.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
90
AT: Alt energy solves need for fossil fuels Our evidence is comparative—investing now in oil refineries is better for the short term than alternative energy Lowe, 08 [John; Executive Vice President, Exploration and Production, ConocoPhillips—Before the Select Committee on Energy Independence and Global Warming U.S. House of Representatives, http://www.conocophillips.com/NR/rdonlyres/ B4168205-5A4E-473E-A78D-8F561FC4BD25/0/Markey_Testimony_written.pdf] ConocoPhillips believes there are several concrete steps that Congress can take to enhance the nation’s future energy security. We want to first emphasize that despite the current tight market, the world is not short of energy supplies. Rather, it lacks sufficient political will to develop the vast fossil fuel and alternative resources that are available. Additionally, it is vital to point out that there is no “silver bullet” that would quickly and inexpensively replace fossil fuels and create energy security. Instead, the United States must bring all economic sources of energy to the marketplace. Doing so will require strong political leadership and determination, as well as, sound insight into the realities of the energy market. We need no less than a national commitment to achieve security of both near- and long-term energy supply and policies that outline a clear path to follow. ConocoPhillips believes that a sound U.S. energy policy must incorporate the six actions explained below. Encouraging conventional supplies Although the United States has only 3 percent of the world’s remaining oil and natural gas proved reserves, this is due in part to governmental policy. We could increase U.S. reserves by drilling in the vast onshore and offshore areas that are currently off limits. Altogether, these areas are estimated to hold 80 billion barrels of recoverable oil and natural gas equivalent – enough to double current U.S. reserves. Industry critics frequently charge that since one area or another only offers a few months or years of supply, it should not be developed. ConocoPhillips believes that it is economic folly to instead transfer $8 trillion dollars – the possible market value of these potential resources at current oil prices – to other countries through imports instead of keeping that money at home and gainfully employing thousands of Americans. Unless Congress acts to improve access to domestic resources, the United States must accept oil import dependence at the current rate of about 60 percent, or even higher in the future. Therefore, the federal drilling moratoria on non-sensitive lands should be suspended and rilling allowed under strict environmental oversight. Industry technology and operating practices have made quantum leaps in the years since these moratoria were enacted. Our national vulnerability no longer allows the luxury of ignoring so much energy potential. It is often said by those opposed to providing more access that, “We cannot drill ourselves out of our domestic energy situation.” That is true, as is the fact that, “We cannot expect an aggressive program to develop alternative and renewable fuels to provide needed energy security overnight no matter how aggressively we develop them.” A balance of both is required. To satisfy projected demand, the United States and the world also need OPEC nations, and particularly those with large reserve holdings, to expand their production capacity. We are concerned about the mixed signals that U.S. policymakers are giving these countries. On one hand the United States urges them to increase production, while on the other it threatens to back out a substantial portion of Middle East oil imports, or to sue OPEC. These countries may not expand their production capacity to the extent that is needed if they do not believe there is a sustained market for their crude oil. Congress should also facilitate the building of the critical infrastructure needed to deliver energy supplies to the public. The United States needs more ethanol unloading and blending terminals, more pipelines and power transmission lines, and more refinery expansions. But duplicate and overlapping federal and state laws, and overly long and difficult regulatory processes, discourage or delay such infrastructure additions, particularly for refineries. For example, ConocoPhillips applied in May 2006 for a permit to expand our Wood River refinery in Illinois, and we still do not have a final permit. At our refinery in Wilmington, California, local permit challenges and litigation have threatened an ultra-low-sulfur diesel fuel project since 2004. An expansion at our Rodeo refinery near San Francisco took 28 months to permit and only after a compromise was reached with the state Attorney General. These expansions are designed to increase supplies of transportation fuels – precisely as Congress would wish. In cases like these, where infrastructure is clearly needed to serve the national interest, Congress should expedite federal and state permitting processes to ensure a balance between federal, state and local and special interests.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
91
AT: Alt energy solves need for fossil fuels Ignoring fossil fuel investments for alternative energy will drive up energy prices Lowe, 08 [John; Executive Vice President, Exploration and Production, ConocoPhillips—Before the Select Committee on Energy Independence and Global Warming U.S. House of Representatives, http://www.conocophillips.com/NR/rdonlyres/ B4168205-5A4E-473E-A78D-8F561FC4BD25/0/Markey_Testimony_written.pdf] With potential advances in technology and infrastructure improvements, these obstacles can be overcome, but we must realize that alternatives cannot be developed overnight and that our dependence on conventional resources will continue into the foreseeable future. Overestimating how quickly the United States can transition to new fuels will likely lead to inadequate development of conventional supplies and higher prices at the pump. Most energy demand projections indicate that even with rapid penetration of alternative- energy technologies, accompanied by substantial reductions in carbon dioxide emissions, fossil fuels must still supply at least two-thirds of global energy by 2030.2 Indeed, there is an apparent misunderstanding of the enormous scale of fossil-fuel use – for example, the world currently consumes 86 million barrels per day of oil – or 40,000 gallons per second. There is also a lack of understanding of the enormous scale of existing infrastructure or the ongoing investment required merely to maintain existing production. For example, the United States has 200,000 miles of oil pipelines and 280,000 miles of natural gas pipelines that required a century of construction.3 Oil and natural gas must serve as important bridge fuels as we move toward alternative sources. If the United States is to improve its energy security, Congress must ensure that the nation has sufficient conventional oil and gas supplies, even as it works to develop alternative energy supplies. Figure 1 below shows how much oil production will need to be added to replace the decline in existing conventional oil production and expand supplies. It will take unprecedented investment to achieve the production levels required to satisfy global oil demand. In fact, the International Energy Agency estimates that through 2030, nearly $10 trillion of investments in oil and natural gas exploration and production, refining, transportation and infrastructure will be required, averaging about $400 billion annually.4 Continued fossil fuel investments are vital to sustain energy supplies—we will need it for at least a decade before alternative energy can fill in Lowe, 08 [John; Executive Vice President, Exploration and Production, ConocoPhillips—Before the Select Committee on Energy Independence and Global Warming U.S. House of Representatives, http://www.conocophillips.com/NR/rdonlyres/ B4168205-5A4E-473E-A78D-8F561FC4BD25/0/Markey_Testimony_written.pdf] Fossil fuels will continue to provide an important bridge to the time when alternative energy sources are available in significant quantities. This bridge is likely to be necessary for decades given the scale of the world’s current energy consumption and the massive infrastructure investment and construction that would be needed to replace existing energy infrastructure. Thus, it is important that the energy industry retain the capability and opportunity to invest sufficient capital in economically attractive traditional oil and gas opportunities in order to continue meeting U.S. and global energy demand.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
92
AT: Alt energy solves demand for oil/gas Demand for oil and gas is inevitable—lack of refineries guarantees that we won’t be able to meet that demand Porter, 7 – Michelle, Telegraph-Journal, 1/26, “Irving project shows faith in oil demand, says analyst” Lexis Irving Oil's proposal for a new refinery in Saint John signals a confidence that consumption of petroleum will not flag in the coming decades. "In ten, twenty and thirty years people are going to still be driving their cars," predicted Kevin Scott, director of refining growth for Irving Oil Ltd., during a press conference Thursday after announcing that the company has filed an application for environmental permits from federal and provincial governments for the project. "The demand isn't going to change a whole lot." It's a confidence that Halifax-based oil industry consultant Bill Simpkins says is not misplaced. Recent discussions surrounding energy efficiency - including U.S. Presdient George W. Bush's announcement that the United States will cut back on gasoline consumption by 20 per cent - are not new, Simpkins said Thursday. "This reminds me of discussions back in the '70s," he said. "We have had a lot of these discussions around conservation, but it really isn't changing demand. We continue to have this love affair with large vehicles." Prices are fluctuating, he said, citing prices that have dropped from the $70US range to the mid-$50 range (light sweet crude futures for March delivery closed at $54.23 Thursday). But, Simpkin said, a drop in demand is nowhere in sight. "What are we going to replace petroleum with?" he asked. "Right now there's nothing there that will replace petroleum products." Simpkins believes that the investment in a second oil refinery is one that will pay off because alternative energies are not yet ready to overtake petroleum. "While there will always be a place for alternative energy, until we become a hydrogen or fuel-cell society there will always be a demand for petroleum products." Scott said Irving looked at the impact of conservation efforts upon demand when it considered the viability of the project. The company concluded that "ultimately petroleum will form the main energy source for North America for many years to come," he said. Despite President Bush's announcement, Scott is confident that the United States will remain the major buyer of Irving's gasoline.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
93
Uniqueness: no refinery expansion now Massive regulations and lawsuits are holding up refinery construction. States News Service, 08 (It’s Past Time to Expand Domestic Refining Capacity, June 20, lexis) A new refinery has not been built in the United States since 1976, and the refineries that we do have are operating at or near capacity. In fact, in 2007, according to the Energy Information Administration, the United States imported 148 million barrels of finished gasoline for use in our cars and trucks. That is on top of the billions of barrels of crude oil we imported. For too long, we have not taken the proper steps to strengthen the energy infrastructure here in the United States that will make us energy secure. Instead, for decades now, we have depended on oil, both crude and refined, from abroad. Often times, this oil comes from unfriendly nations, and the money we send to these states gets used in nefarious ways against our very own interests. The time has come to make the investments in our nation's energy infrastructure to help reduce our dependence on foreign oil. There is no doubt, we must continue to invest in the future with renewable and alternative technologies like wind, solar, biomass, geothermal and the like. But we need more time to invest in these technologies. In fact, renewable energy sources-hydroelectric, geothermal, wind, solar, and biomass- only met about 7 percent of America's total energy needs in 2006, according to the Energy Information Administration. No matter how much we would like to say we can quickly wean this nation off it's addiction to fossil fuels, there simply is no quick fix. So, in the mean time, while we continue to develop the renewable and alternative technologies of tomorrow, we must produce more fuel here at home today. However, even if we were to produce more oil, we simply do not have the capacity to refine it in order to turn it into the fuel we use to power our cars and trucks. Massive regulations and skyrocketing litigation costs have prevented the construction of a new refinery for over three decades.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
94
Uniqueness—no investments now Oil companies are not investing in refineries now because of fear of declining demand. The Canberra Times, 2007 (Why oil companies are not investing in more refineries, May 24, lexis) The recent rise in oil prices is attributed to refinery shortages in the US ("Fuel prices set to spike", 22 May, p7). The really interesting question is: why has inadequate refining capacity in the US now led to rising prices, when this factor has not operated in the past. (Witness the very low global oil prices until the last four years or so). Why is it that, in recent years, oil companies, in the world's biggest oil market by far, have not undertaken the level of new investment which is more than adequate to meet demand, as they have always done in the past? There is one fundamental reason for this: they are not willing to risk the massive investment dollars required, when they are not really confident that there will be the strong, increasing volume of oil throughput needed to justify this investment. In other words, when it comes to the acid test, oil companies have shown that they are not confident that there will be increasing volumes of oil available, as in the past.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
95
AFF—AT: Oil refinery DA Refining capacity is irrelevant—it’ll have no impact on oil and gas prices Davidson, 8 – Paul, Staff Writer, USA Today, “Oil refineries can't keep pace with demand” 6/13, Lexis No new refinery has been built in the United States in the past 32 years. Capacity at existing refineries has increased about 1% a year, failing to keep pace with demand, says Aaron Brady, a Cambridge Energy Research Associates analyst. Until recently, the tight supplies and surging demand allowed refiners, such as major oil companies, to charge a premium of about $9 a barrel of oil, or 21 cents per gallon of gasoline, Brady says. This year, however, high crude oil prices and lower U.S. demand have forced refiners to live with razor-thin margins. That means if crude prices fall, some of the drop could be offset by higher profits for refiners. The good news: Refiners worldwide are sharply expanding capacity. Oil consortium Motiva plans to double capacity at its Port Arthur, Texas, facility by 2010, creating the largest U.S. refinery. Most of the new equipment is designed to process heavy crude oil, which is more abundant and cheaper than light, sweet crude but more expensive to refine. The bad news: Refining makes up just 10% of the price of gas, so boosting capacity won't help much. "Adding refining capacity is not going to have a significant impact on the price of gasoline," says Kevin Lindemer of financial analysts Global Insight. And much of that refining infrastructure will take three to five years to build, says analyst Robert Linden of Pace Global Energy Services. Even so, it should help stabilize gasoline prices if crude oil costs fall or a hurricane shuts down Gulf Coast refineries, Brady says. No impact to oil refinery investment—capacity is high no matter what Robertson, 8 – Peter, Vice Chairman of the Chevron Corporation, “Rising Gasoline Prices,” Committee on House Judiciary Subcommittee on Antitrust & Competition Policy Task Force, CQ Congressional Testimony, 5/22, Lexis In the U.S., consumers have begun to respond to the high fuel prices by using less. Recent figures from EIA suggest that petroleum product demand in the U.S. has fallen 1.4 percent over the first two months of the year, compared with the same period last year. Gasoline production at U.S. refineries was at record levels over the first quarter of 2008, leaving inventories at their highest levels in a decade. Capacity increases at existing refineries have added the equivalent of 10 new refineries over the past decade. Overall refining capacity has increased by 20 percent since 1985 even though there are 57 fewer refineries (See Appendix chart #7). That retail fuel prices still remain high underscores the fact that many factors are in play, and, unfortunately, there are no short-term fixes to today's price levels. Finally, it is important to note that the U.S. transportation fuel markets are not only well supplied but also highly competitive. We are the sixth largest U.S. refiner and operate five of the nation's roughly 150 refineries. Our market share is less than six percent. Marketing operations are similarly competitive. Chevron is the fourth largest U.S. branded marketer operating under the Chevron and Texaco brands. We have roughly 9,700 of the country's 168,000 branded stations. And it's important to note that 95 percent of our stations are operated by independent business people, who must compete aggressively against at least 40 other companies.
Increased production can’t stop runaway oil prices. Reuters, June 17, (byline Mariam Karouny and Alastair Sharp, “Oil supply boost won't lower prices: Iraq,” Reuters, http://www.reuters.com/article/GCA-Oil/idUSL172587220080617?sp=true, Accessed 06-30-08) Any increase in world oil output would not have a significant impact on record-high crude prices that are being driven by speculation, Iraq's oil minister said on Tuesday. Regulations needed to be introduced to stabilize oil markets, Hussain alShahristani said in an interview with Reuters. "I do not think increasing any amount in the international market will have a significant impact on the prices," he said. "It is up to the stock exchange and the regulations in the industrialized nations. It is not something OPEC can contribute to," he said. "We did not see any impact on the prices from the Saudi's previous increase," he said. Top oil exporter Saudi Arabia is poised to boost production in July to its highest level in decades as it looks to tame runaway oil prices. Saudi Arabia already raised output in May. Oil prices have doubled in a year to hit a record close to $140 a barrel on Monday. Saudi Arabia has called a hastily convened meeting of oil producers and consumers in Jeddah on June 22 in an effort to stabilize the market.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
96
AFF—AT: Oil refinery DA No link—their disad assumes a mandated reduction in gasoline usage in addition to alternative energy Drevna, 08 - President National Petrochemical and Refiners Association (Charles, CAPITOL HILL HEARING TESTIMONY, 5/6, CQ Congressional Testimony, lexis) To illustrate the point further, the President's proposal which calls for use of 35 billion gallons per year of renewable fuels, primarily ethanol, also requires a 20% reduction in the use of gasoline by the same time. The Energy Information Administration projects that gasoline demand in 2017 will be 161 billion gallons. A 20% reduction of this figure would result in 129 billion gallons of gasoline. In 2006, U.S. production of gasoline was 136 billion gallons and net imports of finished gasoline equaled 7 billion gallons. Therefore, the target for gasoline use in 2017 is below today's U.S. production levels. This would transform the U.S. from a net importer to a net exporter of gasoline. Meanwhile, demand for other petroleum-based fuels such as diesel is still expected to increase. If U.S. refiners expand capacity to meet rising demand for petroleum products other than gasoline, they will naturally produce more excess gasoline for export at the same time. A fundamental policy question regarding the efficacy of exporting domestic supplies of transportation fuels under the guise of reducing domestic consumption of that same fuel under a continuing supply/demand imbalance must be addressed.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
97
AFF—AT: Oil refinery DA No impact—more refineries are unnecessary—no new oil is coming and refineries can handle any possible increase in oil production NPR, 6/17/08—National Public Radio, “Do we need more oil refineries?” Lexis Dr. KEN DEFFEYES (Author, "Beyond Oil: The View from Hubbert's Peak"): Well, if world oil production is not increasing, and in fact, seems to be in the process of decreasing, you need fewer refineries, not more refineries. And if there were a shortage of refining capacity right now, crude oil would be piling up unrefined, and the price of crude oil would go down. In case you haven't noticed, the price of crude oil is going up sharply, so building more refineries won't make crude oil appear at the entry side of the refinery. PESCA: You're saying our refineries, the U.S. refineries, can handle all the oil they're being given to refine. Dr. DEFFEYES: That's right. And the - my analysis says, world oil production is not going to go up. PESCA: The American Petroleum Institute says that while a new refinery has not been built for 30 years, capacity expansions in existing refineries have amounted to the equivalent of 10 new refineries over the past 10 years. I mean, maybe you could quibble a little bit with the numbers, but is that generally true? It's not the number of new refineries. The existing refineries just keep growing and growing to handle the capacity? Dr. DEFFEYES: They do keep growing, and so far, we haven't seen what I mentioned earlier, of oil piling up on the dock, waiting to go in to the refineries. PESCA: If this is an era of record profitability for oil companies, and if their profits are somewhat dependant on supply and demand, aren't they pretty happy with the amount of refining capacity that we have, otherwise they'd try to built some more refineries somewhere? Dr. DEFFEYES: Well, if there were refinery shortage, they'd be doing what they did in the past. Find an island somewhere, like Aruba, and build a giant refinery. PESCA: New York Senator Charles Schumer was criticizing the oil industry, and at a time when rusty refineries in his words, were constantly breaking down and here's one thing he said. I don't know any other industry where an equipment breakdown in one company, benefits every other company by raising prices. Is the senator's assessment of how it works accurate? Dr. DEFFEYES: I'm not sure about that one. Are the floods in the American Middle West right now raising the price of corn? Yes. Now, do we need another Iowa to keep the price of corn stable? (Soundbite of laughter) PESCA: I see what you mean. That's an excellent analogy. So building more refineries would that help a little, help a lot, won't do a damn thing, or would wind up hurting us? Dr. DEFFEYES: I think it won't do a thing. PESCA: All right, Professor Kenneth Deffeyes is the author of "Beyond Oil: The View from Hubbert's Peak." He will join us for more conversations about solutions to the energy and oil crisis. Thank you again, Professor. Dr. DEFFEYES: You're welcome.
Processing Canadian crude increases green house gas emissions by 40% Chicago Tribune 08 [Michael Hawthorne-Tribune Reporter, “Midwest Projects Would Increase Emission Up to 40%, February 12, http://www.chicagotribune.com/news/local/chi-greenhouse_12feb12,0,6312287.story] While greenhouse gases from the tailpipes of cars get the most attention, the refineries that keep cars and trucks running also contribute to global warming. Fuel must be burned to make gasoline from oil, generating carbon-dioxide pollution. The huge increases in greenhouse gases are a largely hidden consequence of an industry wide trend to buy more Canadian crude. Vast reserves of tar-soaked clay and sand lying under the swampy forests of northern Alberta are seen as a profitable and reliable source of oil, but the heavy petroleum requires more energy to process. Other oil companies declined to discuss projected increases in global-warming pollution, but researchers have calculated that refining the Canadian petroleum produces 15 percent to 40 percent more carbon dioxide emissions than conventional oil. With no greenhouse-gas regulations in place, the companies face no costs for the extra pollution they will churn into the atmosphere. "This is a glaring example of how our energy policy and climate policy are at cross purposes," said Judi Greenwald, director of innovative solutions at the Pew Center on Global Climate Change. "Companies are making decisions that really don't make sense on a national level when you fail to take climate change into account." The industry's move toward heavy petroleum comes as oil companies aggressively promote their investments in renewable energy and involvement in efforts to fight global warming.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
98
AFF—AT: Oil refinery DA It is too risky to invest in refineries now. Westfall, 07 (Lynn, chief economist for Tesoro, E&E News-- OIL AND GAS: Tesoro's Lynn Westfall gives refinery industry's take on gas prices, demand for alternatives, July 10, lexis) Lynn Westfall: It seems like that would be the obvious thing to do, but it hasn't made economic sense in the past and it still doesn't make economic sense. If you're asking someone to build a refinery you're asking them basically to spend about seven or eight years, which is how long it would take to build a refinery. So, during that time period you're spending billions of dollars and getting no income for seven to eight years. And after that, even at today's high refining margins, it would take another 10 to 12 years to pay off that investment. So asking someone to build a new refinery is basically asking them to take a 20 year bet that refining margins are going to stay high. And, at the same time, most developed countries in the world are doing their best to lower demand for our major product, which is gasoline. So that's a very unclear investment decision for most companies. Monica Trauzzi: Isn't that part of the risk of being part of the refining industry though? Isn't that a risk that you have to take? Lynn Westfall: That's a risk that in the past we were willing to take when you could build a new refinery in three or four years. And before there was even any talk about gasoline has issues with global warming, we want more ethanol, no renewables. So I think, in the past when it was a less risky proposition, it was a level we were willing to take. But now it's just not really - it's gone above our risk tolerance.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
99
AFF—AT: Oil shocks No impact to oil shocks—the economy has changed the third time around Dechaux, 7—Delphine, “Less damage in third oil shock” Herald Sun Australia, 5/5/07, Lexis THE world is enduring a third ''oil shock'' as crude prices trade at record levels close to $US100 a barrel after a sustained surge over the past three years, according to economists. But unlike the oil shocks of 1973 and 1980, this time the global economy remains solid, even amid the added threat of the US housing crisis. ''There is no doubt we are in the third oil price shock,'' said Leo Drollas, chief economist at the Centre for Global Energy Studies in London. ''Because since 2004 . . . prices have gone from $US30 to almost $US100.'' OPEC ministers meeting in Abu Dhabi today to decide on output quotas for the cartel argue that the oil price spike does not reflect the supply-demand situation. Rather they believe prices have surged because of geopolitical concerns, such as that over Iran's nuclear program. In the run-up to the 1980 oil shock prices had more than doubled. Francois Lescaroux, an economist at IFP, a French state-run energy research body, said majority opinion was that the first two oil shocks were due to supply factors. ''Everyone agrees this time that demand factors are pulling up prices,'' he said. The oil price shock of 1973 occurred after Arab members of OPEC halted shipments of crude to the United States, Western Europe and Japan for their perceived support of Israel in its battle against Syria and Egypt during the Yom Kippur War. Following the oil embargo, the price of crude jumped above $US10 a barrel for the first time. The second oil crisis, in 1979, followed the Iranian Revolution. By the start of 1981, oil prices had surged to $US39, which, adjusted for inflation, is the equivalent of $US101 a barrel today. Yahia Said, a professor at the London School of Economics, said political unrest was a common factor in all three oil shocks. ''In the first case, it was the Yom Kippur War of 1973, in the second case it was the Iraqi invasion of Iran (after the Iranian Revolution). In this case it is tensions around Iraq and Iran,'' he added. ''The shock this time has not had the same negative repercussions in terms of inflation or in terms of recession. ''It means that the economies as the result of the previous two shocks have managed to reduce the impact of high oil prices, especially in developed countries,'' he added.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
100
AFF—AT: Oil shales good Oil shale production is impossible – the omnibus spending bill banned commercial regulations Loris, ’07 (Nick, Research Assistant at the Heritage Foundation, “Omnibus Prohibits Oil Shale Development,” The Heritage Foundation, December 18, http://www.heritage.org/Research/EnergyandEnvironment/wm1754.cfm, Accessed 06-30-08) Adopted by the House of Representatives on December 17, the omnibus appropriations bill prohibits funding for oil shale commercial regulations. Without these regulations, commercial production of oil shale is impossible. The oil shale industry experienced several hiccups in the 1970s, and innovation has a long way to go before the resource becomes viable, but its potential is enormous. The United States is estimated to have more than 2 trillion barrels worth of oil shale resources. Spending bills should not include policy riders that stand in the way of U.S. energy independence. Dr. Daniel Fine of MIT reported that 750 billion barrels worth of oil shale have been discovered in Colorado alone.[1] That amount is enough to potentially power the U.S. economy for many decades. Furthermore, if full-scale production begins within five years, the U.S. could completely end its dependence on OPEC by 2020.[2] The oil shale provision reads as follows: None of the funds made available by this Act shall be used to prepare or publish final regulations regarding a commercial leasing program for oil shale resources on public lands pursuant to section 369(d) of the Energy Policy Act of 2005 (Public Law 109-58) or to conduct an oil shale lease sale pursuant to subsection 369(e) of such Act.[3] Without these regulations in place, these lands will not be able to be leased and/or developed for exploration of oil shale production. The technology to collect and refine oil shale is developing at a rapid pace, and private companies are willing to invest in it. Shell Oil commenced a research and development project on oil shale 30 years ago and continues to invest a considerable portion of its own revenue into commercializing the shale. An estimated 1.2 trillion to 1.8 trillion barrels of oil is available in the Green River Formation, an area which expands through most of Colorado and parts of Utah and Wyoming.[4] The recoverable oil refined from oil shale would provide another resource for fuel production. According to the U.S. Department of Interior and Bureau of Land Management, a moderate estimate of 800 billion barrels of recoverable oil from oil shale in the Green River Formation is three times greater than the proven oil reserves of Saudi Arabia.[5] The investment in technology and R&D is making the process cheaper and safer for the environment. In effect, methods of harvesting oil shale force excess carbon back into the ground. Dr. Fine estimates that oil shale production could by economical to produce when oil is selling at $25 per barrel.[6] The omnibus provisions would undoubtedly slow progress being made in the oil shale industry, effectively putting another viable, domestic source of energy "off limits." As such, the oil shale prohibition would severely reduce the potential for oil shale to decrease U.S. dependence on imported oil. If Congress passes the omnibus in its current form, the oil shale provision is one more reason for President Bush to exercise his veto authority.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
101
AFF—AT: Oil shales good Oil shale mining causes global warming, environmental destruction, and contributes to water scarcity. NRDC, 07 (Natural Resources Defense Council, a national organization of scientists, lawyers and environmental specialists dedicated to protecting public health and the environment. “Controversial Oil Substitutes Sharply Increase Emissions, Devour Landscapes” 6-11-07. http://www.nrdc.org/media/2007/070611.asp A 2005 study by the RAND Corporation estimates it would require a 1200-megawatt power plant just to unlock just 100,000 barrels of shale oil a day (less than 1 percent of our total oil demand). Large enough to serve half a million people, the power plant alone would burn 5 million tons of coal each year and release 10 million tons of global warming pollution. Moreover, each barrel of shale oil produced by the conventional mining method consumes between 2.1 and 5.2 barrels of water, a commodity already scarce in the region. Runoff from mine tailings – 150,000 tons a day; 55 million tons a year – would threaten water supplies used by cities, farms, and wildlife. “Oil shale development is all talk and no gain. It presents huge risks to both the economic and environmental lifeblood of this state. At a bare minimum we need to do serious testing and evaluation on a pilot basis before we even consider unleashing this technology on a large scale,” said Bob Randall, an expert with WRA. Oil shales and tar sands are an environmental disaster – they increase water scarcity, pollution cause more warming and destroying ecosystems Argonne National Laboratory, 06 (Report for the Bureau of Land Management in Washington, DC. “Summary of Public Scoping Comments for the Oil Shale and Tar Sands Resources Leasing Programmatic Environmental Impact Statement” March 2006. ostseis.anl.gov/documents/docs/OSTS_PEIS_Scoping_Summary_Report060310.pdf) Questions about the amount of water that OSTS development technologies would require and how the technologies would impact surface and groundwater were the most frequently stated concerns in the public comments. Concerns were raised regarding the requirements of the Colorado River Compact. Specifically, commentors observed that the processes would consume large amounts of water in a region where water resources are very limited. Many commentors questioned specifically where the water would be obtained from and who would lose water in order to provide needed water to OSTS development. It was stated that other industrial development would be limited because there would be no remaining water resources. Concerns were also raised that river flows would be significantly reduced. A commentor recommended that all private industry conducting shale extraction be required to institute water recycling programs. Water quality issues included concerns that highly saline runoff would be toxic to the flora and fauna of streams and rivers, or that discharged waste water with increased temperature would harm riparian ecosystems. Compliance with the terms of the Colorado River Salinit Compact was identified as an issue of concern. In addition, commentors expressed concern that leachate from the process wastes would cause contamination of groundwater and surface waters, and some commentors expressed concern about impacts on groundwater quality as a result of the proposed in situ retorting process being developed for oil shale. Air Quality, Noise, and Visual Impacts. The identified air quality concerns involved emissions from the process equipment and emissions from other associated sources (e.g., transportation vehicles and new power plants required to provide energy for the OSTS development projects). The commentors requested that the potential emissions of criteria pollutants and hazardous pollutants from mining, retorting, processing plants, and power plants be quantified. It was requested that regional three dimensional transport modeling be conducted to estimate the air quality impacts. Many commentors also expressed concerns about emissions of greenhouse gases and associated impacts on global warming. Another prevalent concern was that haze and dust from OSTS development would decrease air quality in Class I areas. Many commentors stated opposition to adverse impacts to the visual landscape from processes such as surface mining, and stated that the great beauty of the areas potentially impacted should be preserved for future generations. Soil and Vegetation Impacts. Commentors expressed concern that the large amounts of new infrastructure needed to support the project would require large amounts of land. Commentors observed that surface mining (if used) would have severe adverse impacts on landscapes, which would be compounded by the sensitive nature of the areas. Concerns were also noted that in situ technology (if used) would require that vegetation be stripped from much of the land, thus requiring long recovery periods. Other identified issues were erosion and/or compaction of soil due to clearing of vegetation and new development, urban sprawl, impacts of the project on agriculture and grazing, and the spread of noxious weeds. Waste Generation and Disposal. Commentors requested that options for disposal of the huge volumes of overburden and waste rock (e.g., spent shale) generated by OSTS development be addressed in the PEIS. Concerns were voiced that hazardous leachate could be produced from these wastes, thereby causing groundwater and surface water contamination (see Water Quantity and Quality discussion above). Ecology and Wildlife. A few commentors noted the unique nature of some of the large mammal populations in the study area, including pronghorn antelope, mountain lion, elk, mule deer, moose, bighorn sheep, black and grizzly bears, and gray wolves, and expressed concern that the leasing of public lands for OSTS development would reduce their available habitat.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
102
AFF—AT: Oil shales good Oil shale development is logistically impossible and an environmental disaster. Udall, 5 (Randy Udall, director, Community Office for Resource Efficiency. “The Illusive Bonanza: Oil Shale in Colorado” http://www.aspencore.org/images/pdf/OilShale.pdf) As a rule, nations don’t tap oil shale unless they are destitute. The world’s primary producer has been Estonia, a Baltic nation lacking in coal, natural gas, oil, or hydropower. When Russian natural gas and nuclear power became available, Estonia began to phase out its shale oil industry. Elsewhere, small amounts of shale have been mined in China, Brazil, and Russia. Most recently, a well-funded and much-ballyhooed Australian oil shale experiment failed. Tellingly, one partner in that bankrupt project was Suncor, a successful developer of Canadian tar sands. After losing $100 million, Suncor now appreciates the critical distinctions between tar sands and oil shales. There are two ways to produce shale oil. Typically, the rock is mined like coal. After being loaded and trucked to a processing plant, the shale is crushed and fed into an enormous kiln (or “retort”), where it is roasted to 1,000 degrees F. The heat “cracks” the kerogen, whose distilled vapors can be refined into a liquid fuel. Retorting oil shale is capital intensive, messy, inefficient, and polluting. It consumes lots of energy and water. The slag, swollen in volume and contaminated with arsenic, must be safely disposed. The entire process is so costly and laborious that global production has never exceeded 25,000 barrels a day, compared to today’s 84,000,000 barrels of total oil production. Retorting a million barrels each day, as some propose, would entail mining and disposing of 700 million tons per year, digging the world’s deepest open pit mines, constructing a hundred retorts, and platting new cities to house tens of thousands of workers. In sum, it would be the largest mining operation in the world. Oil shales cannot solve energy independence – renewable energy is a better option. Udall, 5 (Randy Udall, director, Community Office for Resource Efficiency. “The Illusive Bonanza: Oil Shale in Colorado” http://www.aspencore.org/images/pdf/OilShale.pdf) What contribution can oil shale make to energy security? Producing 100,000 barrels per day of shale oil does not violate the laws of physics, if the price of conventional crude rises high enough it might be economic. But the nation is currently consuming 100,000 barrels of oil every seven minutes. Increasing the efficiency of America’s automobiles by two miles per gallon would save ten times as much fuel each year, saving consumers $40 billion at the pump. The National Academy of Sciences has stated that bolder efficiency targets—cars, trucks, and SUVs getting 30, 40 or 50 miles per gallon—are doable and affordable. An aggressive national commitment to fuel efficiency is not optional, it’s inevitable. In time, a more efficient fleet could save 20 times as much petroleum as oil shale will ever provide. Dreams and hype aside, oil shale is the poorest of the fossil fuels, containing far less energy than crude oil, much less even than hog manure, peat moss, corn pellets, household garbage, or Cap’n Crunch. A meager amount of energy, tightly bound up in an enormous volume of rock, oil shale seems destined to remain an illusive bonanza, the petroleum equivalent of fool’s gold.
Oil Shale development poisons the water supply. Natural Resources Defense Council 07 [Western Colorado Congress, Western Resource Advocates, Colorado Environmental Coalition, “Oil Shale Development Will Threaten Water Supplies, June 7] Oil shale development also poses a potentially serious threat to water quality. The process of transforming the kerogen in shale into oil leaves behind salts and numerous toxic, water-soluble chemicals that could leach into the groundwater that is the source of much of the region’s surface water during the critical time when flow is lowest. Flushing these chemicals from the oil shale production zone, as several companies propose, would also create large volumes of highly saline water that will require further treatment. But like oil shale production itself, the technical feasibility of isolating and treating contaminated groundwater has not been demonstrated. The toxic chemicals left behind in the spent shale could potentially pollute important water sources including the Colorado River and some of its tributaries.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
103
AFF—AT: Oil shales good Oil shale development requires massive amounts of water—increases scarcity Natural Resources Defense Council 07 [Western Colorado Congress, Western Resource Advocates, Colorado Environmental Coalition, “Oil Shale Development Will Threaten Water Supplies, June 7] Producing oil from shale uses water on site both during and after production (to cleanse the production zone after the oil has been extracted). For example, Shell recently disclosed in a permit application for its small research and demonstration site that it will have to rinse its underground production area over 20 times, requiring up to 4 acre-feet each day for over two years and resulting in massive water disposal challenges. A 2005 analysis by the RAND Corporation concluded that the Colorado River’s main stem and several tributaries would be “highly impacted” regardless of which technologies for oil shale development are employed. A 2006 analysis by a Los Alamos researcher concluded that the White River could support a 500,000-barrel per day commercial operation if a 16,000 acre-ft reservoir is built in the watershed and extractions are limited to 70,000 acre-feet per year. However, the Bureau of Land Management envisions a one- to three-million barrel-per-day production level. The Los Alamos report calls for a regional assessment of the cumulative impact of the oil shale industry to water resources in the Colorado River Basin. The water needed onsite for oil production is only part of the puzzle. Water is also required to produce the enormous amounts of electricity necessary to convert the kerogen in the rock into utilizable fuels. The new power production needs of a one million barrel-per-day operation would be about 150,000 acre-feet of water per year, according to the Los Alamos analysis. Taking into account the water required for onsite production and offsite power generation, the commercial-scale oil shale production rate proposed could consume over 300,000 acre-feet of water per year. For comparison, this amount of water could supply the household needs for two cities the size of Denver. Next week, the State of Colorado is expected to submit its comments on the preliminary draft Oil Shale and Tar Sands Leasing Programmatic Environmental Impact Statement (PEIS), a document that could determine the future of vast swaths of Colorado’s West Slope. The State of Colorado, along with 13 other state and local governments, is a cooperating agency on the Programmatic EIS and was supposed to be a full partner in its preparation. On May 14, however, the BLM denied a request by Colorado Governor Ritter and Wyoming Governor Freudenthal for more time to review the seven-volume, 2000page draft.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
104
AFF—AT: Tar Sands Tar sand extraction produces 2.5 times as much greenhouse gases as conventional oil RAN 08 [Rainforest Action Network-Investigative Organization, ran.org/fileadmin/materials/comms/mediacontent/brochures/Tarsands_comp.pdf] Extracting heavy oil from tar sands and transporting it by pipeline for reining is a difficult and costly process. Oil companies have failed to reduce emissions of the large amounts of energy to separate the oil from the sand which is intensifying greenhouse gas emission. Yet, oil companies have not addressed emissions of heat-trapping carbon dioxide in refinery air permits pending before federal and states environmental agencies. From extraction to reining the climate change impacts are vast. Global-warming pollution from oil refineries is expected to soar by as much as 40 percent during the next decade, a dramatic increase that runs counter to regional and national efforts to curb heat-trapping gases and reduce America’s oil consumption. Tar sands oil is the worst type of oil for the atmosphere. A barrel of tar sands oil produces 2.5 times as much greenhouse gases as a barrel of conventionally produced oil because so much energy is required to separate the tar from the sand and upgrade the tar to oil.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
105
AFF—AT: Tar Sands Tar sands are exceedingly expensive, environmentally destructive, and unsustainable. Leggett, ’05 (Jeremy, former member of the UK Government Renewables advisory board, The Empty Tank, Random House, New York. p. 41-43) Canada's National Energy Board puts production from the tar sands at 1 million barrels a day in 2004. The Canadian Association of Petroleum Producers forecasts an increase in supply to 2.6 million barrels a day by 2015.46 Not a lot of progress in ten years then. Even if all current expansion [end page 41] plans for Alberta's tar sands come to fruition they will produce only 3 million barrels a day by 2012. These are almost unnoticeable percentages of projected global demand." And even this has not been achieved without problems. The Petroleum Review reports "gargantuan cost over-runs" in the three projects operating at present in the tar sands area, and "a crescendo of scale backs and postponements" as a consequence." This is because heavy oil is both difficult and expensive to extract. To yield a barrel of oil by mining tar sand that is exposed at the surface, two tons of sand have to be dug up, from which the oil must be separated in giant washing machines, and then huge volumes of tailings have to be dumped into giant sludge ponds. But much of the tar sand is underground. To get that out requires steam injection of high temperature (up to 200°C) and the use of solvents, as we saw in Chapter 2. The environmental problems are only beginning at that point. Colossal amounts of water have to be heated, vast amounts of natural gas have to be used to do that, and it all involves major greenhouse gas emissions. The amount of water needed by the current small, unconventional oil-extraction industry in Canada is creating problems as things stand. Consider the following. Alberta's environment minister, Lorne Taylor, told a seminar on water management in June 2004 that the oil industry would eventually have to stop pumping water down wells for conventional enhanced oil recovery. Communities, farmers, ranchers, and other landowners are becoming increasingly concerned about loss of freshwater, she said, and the province risked not having enough water in the future to sustain the population and protect the health of lakes and rivers. I emphasize, these concerns were about conventional oil production, not the much more water-intensive unconventional production techniques." Ironically, concerns are emerging that Canadian gas is depleting so fast that there won't be enough power available to heat water for the tar sands operations anyway. The Petroleum Review reported in November 2004 that the operations were using 0.6 billion cubic feet of gas a day. If production reaches 2.2 million barrels a day, the draw on gas could be as much as 2.5 billion cubic feet per day. The Review notes coyly that this would "place significant demands on dwindling supplies." Canadian marketable natural gas production in 2003 totaled 16.8 billion cubic feet per day, a decrease from 17.3 in 2002. Despite record gas well drilling in 2003, production decreased by approximately 3 percent." [end page 42] One critic told the Oil & Gas Journal that the amount of gas needed to extract the oil reserves that the magazine had so generously credited to Canada amounted to two or three times Canada's gas reserves. The only way the 300-plus billion barrels could be extracted, he figured, was to build nuclear power plants dedicated to the job. That might take rather too long for unconventional oil to fill the gap created by the conventionally depleting oil of the Middle East " The energy levels required to heat the water are such that carbon dioxide emissions are more than three times greater than those of conventional oil production. 53 Canada has ratified the Kyoto Protocol, the United Nations treaty aiming to begin the process of cutting greenhouse gas emissions. We will discuss this treaty and its seriousness further in Chapter 5.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
106
AFF—AT: Tar Sands Tar sands cause global warming and environmental devastation – plus, they’re too energy intensive to be a viable oil alternative. NRDC, 07 (Natural Resources Defense Council, a national organization of scientists, lawyers and environmental specialists dedicated to protecting public health and the environment. “Controversial Oil Substitutes Sharply Increase Emissions, Devour Landscapes” 6-11-07. http://www.nrdc.org/media/2007/070611.asp To get at tar sands, companies use huge amounts of natural gas – enough to heat 4 million homes last year alone – to generate steam that is pumped deep under ground. In other cases, vast open pit mines are used to dig the material out. Either way, the industrial mix of roads, pipelines, pits and heavy equipment cause irreparable damage across the rare and irreplaceable habitats of Canada’s vast Boreal Forest, home to more than 40 percent of North America’s waterfowl. Toxic tailings threaten regional water supplies. From start to finish the process generates three times the global warming emissions of conventional gasoline. Emissions from tar sands production totaled 125 million tons in 2003. “The irony is that extracting energy from the Alberta tar sands actually requires an input of massive amounts of energy. It’s counterproductive, could contribute triple the global warming pollution as conventional oil, and devastates the environment. It just doesn’t make sense,” said NRDC senior attorney Susan Casey-Lefkowitz. Tar Sands cause deforestation and massive pollution. Casey-Lefkowitz, June 16, 2008, (Susan, Senior Attorney with the Natural Resources Defense Council, “Natural Resources Defense Council to Oil Companies: Stop Tar Sands Fuel” http://vcr.csrwire.com/node/8630) Recently, 500 ducks mistook a lake of toxic tar sands waste in Alberta for one of the many pristine waters in Canada’s Boreal forests. Once coated with the oily residue, the ducks couldn’t fly away and they all died. Many had flown from the United States on their way to have their young in the Boreal. The deceptive waters of the enormous waste lagoons were likely too attractive for them on their long trek north. Tar sands oil is just as deceptive as a solution to our energy needs. The death of 500 ducks was one more warning about harm caused by mining and drilling Canada’s Boreal forests for the tar sands oil that lies deep under the surface. Beneath the carpet of blue waters and green forests of the Province of Alberta, the tar sands are sand mixed with a sticky substance called bitumen. This bitumen – after using lots of energy and water – can be turned into synthetic crude oil, and from there into fuel for our cars, trucks and airplanes. In addition to the problems of torn up forests and toxic lagoons, the process for making the synthetic crude produces three times the greenhouse gases per barrel as conventional oil production. While companies like BP are posting record high profits, they are making others pay for the damage they are causing at the local and global levels. At a time when our government and the oil companies should be making major investments to kick our oil addiction, the big oil companies like BP, Exxon, Shell, Chevron and ConocoPhillips are wallowing in the tar sands. Instead of investing in clean energy in this time of declining world oil reserves, these companies are putting their resources into destroying critical wetlands, forests, local communities, and our global climate for the dirtiest oil.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
107
AFF—AT: Canada relations impact Relations with Canada are deep and resilient. Ek and Fergusson 07 – (Carl and Ian F., Foreign Affairs, Defense, and Trade Division congressional researchers, May 15, “Canada-US Relations,” Order code 96-397, http://209.85.215.104/search?q=cache:jkhCWkWD0wJ:www.fas.org/sgp/crs/row/96397.pdf+US+oil+Canada+relations+improve+benefit+importing+tar+sands+good&hl=en&ct=clnk&cd=9&gl=us&client=saf ari) Regardless of the occasional rancor of U.S.-Canadian trade disputes, there is little danger that such conflicts would ever escalate into a full-blown trade war. The Canadians in particular have a strong incentive to resolve feuds and maintain close trade ties with the United States. The Canadian economy is heavily export-oriented, and its largest trading partner by far is the United States, takes more than 80% of Canada’s exports and is the source of nearly two-thirds of its imports. And although sharp disputes still plague the enormous bilateral trade relationship, it is important to bear in mind that such disputes normally affect only 2% of trade.
Jheidt, Anshu, Melissa, Alexa, Krystal
Oil refineries DA 7 week seniors
108
AFF—AT: China fill-in No impact to their China arguments—Canada sending supplies to China just guarantees other international supplies come to the US Edmonton Journal, 6 “Oil futures a safe investment for young workers: This is not a sunset industry, energy minister says” Gordon Jaremko, The Edmonton Journal. SECTION: ALBERTA OIL & GAS REPORT; Pg. E1, Lexis EXCESS TO ASIA U.S. forecasts do not stake claims on all the new production expected from the oilsands. "If volumes reach the levels Canadian analysts talk about, there could easily be a desire to send some to Asia," Butler said. Washington forecasts acknowledge plans by Terasen Inc. and Enbridge Inc. for new oilsands pipelines to fill ocean tankers at expanded terminals on the British Columbia coast. Both firms continue to seek shipper signatures on contracts to use the proposed new lines from Edmonton to Kitimat as the key item needed to build the projects. Overall, American supplies will improve even if Canadian oil exporters widen their horizons, Butler predicted. Alberta deliveries across the Pacific Ocean to China and India would free up other international supplies to flow to the U.S. Atlantic seaboard, he said. But Washington expects Canadian oil marketers to stay focused on the U.S. as the lowest-cost export destination.
Jheidt, Anshu, Melissa, Alexa, Krystal
Related Documents
Da Oil Refineries
December 2019 9
Da Oil
December 2019 30
Oil Da
December 2019 24
Msdi Refineries
December 2019 7
Da Peak Oil
December 2019 26