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tv   Key Capitol Hill Hearings  CSPAN  November 8, 2013 8:30pm-10:31pm EST

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lines with a diameter of eight to 24 inches that will move high-volume soup crude oil. it's by far the most efficient way and most cost-effective way to transport crude. but we have now are places like north dakota circumventing the traditional pipeline transportation structure and they are taking fuel directly to refineries in the upper midwest. by truck, by trained anyway they can get it there. this places the demand for fuel coming from cushing reversing some of the pipelines and build new infrastructure to get crude oil from cushing south to gulf coast refineries which will display some of the imported crude typically used on the golf course -- gulf coast and those have begun to export refined products into
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latin america and south america. so it's all about building an infrastructure to connect the production to the consumption. the pipeline transportation is the most efficient and cost-effective way to do that long run. >> host: with all that laying on the table at me turn to viewers. her couple of tweets, one from jody who says there is a whole new industry for renewable nonpolluting forms of energy. why are we scrapping the oil energy and we need or oil, more more gas and more more gas in more things to burn again. that's what makes this economy grow. democratic grow. democratic caller you are up next. go ahead. >> caller: good morning. hearing about how the oil is getting around and they willes on line in logan county are getting oil and gas and i know they are building some gas
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collection pipelines. where's the gas going around the country? >> guest: in a similar process we typically talk casually about oil or natural gas production but in reality a lot of it is mixed production. at the time really the cushing oilfield was booming in 1914 to 1918 period gas was a byproduct of crude production and a lot of it flared to be burned. it was later that natural gas use was used in conjunction with crude oil. you are not going to have a small take away pipeline to move the natural gas and crude oil into the infrastructure and the system to be bought and sold in refined and processed. you will have storage tanks built on site and those storage tanks will then store the crude or the natural gas.
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the buyer will come out and track back from a small storage facility into a larger storage facility where it can be put in the pipeline system and transported in and transported and blended them processed and distributed to consumers. post away her life from cushing oklahoma this morning talking about the facility they are to store oil, the largest in the country. the capacity to store up to 80 million barrels of oil. 13 companies on what are called tank farms in that area. russell evans is our guest and economist socialize in energy from oklahoma city university and we have a support line set a line -- set aside for oklahoma residents. (202)585-3883. let it go to dan in indiana, fremont indiana, democratic caller. >> caller: hello greta. thanks for taking my call. i am actually from michigan and
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on july 25, 20101 of the aging pipelines ruptured and for 17 hours that nasty fuel pumped into our towns system. it was still 90% falling on top and it's still laying in the bottom of kalamazoo river. this negligent criminal outfit enbridge has not cleaned up yet. for 17 hours that pumped into our river because they were negligent and their control center was improperly staffed. he didn't know how to read their monitors. i don't know i would suggest if he knows about marshall michigan and the 1.2 million gallons that spilled into our precious rebrand their fields and what
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about safety? are they improving at? i don't think so. they are putting new pipelines in and not putting sensors and, the most optimum and sensors to monitor them. they are risking our environment to save a few bucks is the bottom line. thanks for taking my call. >> host: danby will ask our guests respond that i wanted to let you know that brian from enbridge will be coming up next from their terminal there and we will be talking about pipeline safety and how that works and give him a chance to respond to what you have to say. russell evans, go ahead. >> guest: i welcome the opportunity to respond in share some of enbridge's expertise and distributed each -- distribution management. i am not and infrastructure expert or pipeline expert and a quick note that this call in conjunction with the previous tweet i believe, in the united states and in oklahoma we are
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looking more and more at energy-based systems. ix in the oil production, natural gas production and wind energy generation. so i think increasingly we're thinking about in oklahoma and nationally ways to blend our fuel consumption with traditional fossil fuels with renewables like solar, light wind, beautifuls and other options -- biofuels and other renewals -- renewables like solar and biofuels and other options and in spite of what no doubt is a serious concern for your caller it still remains the fact that pipeline transportation is the safest most environmental friendly way to transport large amounts of crude oil. so while enbridge would like to speak to their expertise in this area in general it will still be
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the case that we will consume fossil fuels and feed economic activity not just the united states but nationally and part of the pipeline infrastructure will be essential to allowing that to occur. >> host: on the issue of how oil is transported, this is from "the wall street journal." the sources for energy information administration. on the move, the amount of crude oil transported by rail, food and water skyrocketed in 2012. what is happening in areas of shale and high production areas where they are trying to transport the oil and get it out of there and get it to refineries? >> guest: yeah. it takes time to build the appropriate pipeline infrastructure. it takes time to comply with necessary due diligence in terms of regulation and environmental concerns and the fields of production developed much faster than the forms of transportation developed.
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you have crude oil as the production expression takes off needs to find a way to get to the consumer. in the very short-run over the course of years it will be. it will transfer more oil by truck, by train and by waterway anyway we can get it from the fields of production to the consumer to refineries and to the production process. i think in the long-term, we will build out the pipeline infrastructure and i think that will be critical to a long-term energy plan in the united states when i say long term i mean at least the medium term in which we are relying on fossil fuels but the pipeline infrastructure will be critical and it will continue to develop. i think in spite of some of the gaps we have between west prices
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and crude prices some of the concerns about whether the west texan price is a barometer of that overall oil markets that will balance too over time and say years of the the cushing hub and pipeline infrastructure worming critical to our energy plans. areas of production and consumption. >> host: sea of tranquility tweets and this is shocking and disturbing that we have already have these pipelines and we will tell canada we aren't smart enough to build xl, the canada pipeline. >> guest: again i would let others speak to the specific concerns of the pipeline. i certainly understand some of the public lawsuits associated with developing the pipeline to tie into the production with western canada into cushing to get it distributed mixed and
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distribute to its locations and sent to its final destinations. i suspect that the end of the day that production will find a market somewhere and i suspect that the end of the day it will find a market here with its nearest neighbor in the united states and we look and we will get a pipeline built or a way to connect that production into consumption here locally. so i think it's only a matter of time before that happens. i suspect if i had concerns, environmental concerns about the development of those tar sands any delay in those fields a year or two ahead that allows an alternative fuel to develop together few years further in their research and development line a little bit more competitive implanted into our mix of energy consumption but at the end of the day it's a considerable oilfield and i have to think it will be tight again.
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it really already is but in a much bigger way. >> guest: . >> host: that was the point is going to bring it. when you look at the map of the pipelines between the united states and canada exist without keystone xl. >> guest: that is correct. a map of the united states with the exception of the the far east coast and west coast almost every other field of production in the united states, almost every of their place in which oil is produced in the united states and canada for that matter has the ability to tie in and shipped to cushing oklahoma. cushing ties into almost every field of protection in the united states and you are right. the pipelines are to exist. since it's really a matter of accommodating production and trying to find ways to assess a tight these fields of production to the end-users and the production is much more
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dynamically run and faster than the infrastructure can keep up with to get that crude where it needs to go. >> host: for viewers the "washington post" had this ad in newspapers on monday. put out by the canadian government. canada is america's largest oil supplier showing that the united states imports most from canada and in saudi arabia mexico venezuela iraq and nigeria. the canadian government lobbying lawmakers here in washington through the "washington post." here's an economic expression russell evans when it comes to oil companies and energy. shane out whether tweets in this. get rid of tax breaks and loopholes and subsidies for big oil and coal. create more incentives for clean energy and balance the field balance the deal. i'm a subsidy question where it is a stand and how does that benefit not only oil companies but alternative energy companies as well? >> guest: to be sure, companies across the spectrum in the energy industry enjoy
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subsidies or tax credits. we continue to build wind farms at a rapid pace here in oklahoma and across the midwest. a lot of those windfarms are viable only because of these tax tax -- available. oil and gas companies enjoy tax credits and some offset some of the drilling costs and intangible costs as they extract the defeatable resource. i think that's a worthwhile discussion to have about the appropriate balance of subsidies , tax burden, tax credits across the energy mix. but certainly you know the question of energy balance is much broader than the tax credit of the subsidy mix. it's a function of energy content and the amount required to run the united states economy. there simply isn't energy content available at this time.
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in my opinion based on what i've read and studied and seen adding alternative fuels to displace the tremendous energy available from fossil fuels you are displacing one fossil fuel with another. coal with natural gas that we are really talking about trying to find the right mix and the mix will evolve over time. the subsidies and tax credits may affect the rate of evolution but shouldn't affect the overall outlook of that ablution process. >> host: independent caller on the air with russell evans of oklahoma city university, the economist there. go ahead, mike. >> caller: looking at the transportation cost as you pointed out there's more danger of train wrecks and more spillage occurs through barge calamities that ever has occurred through pipelines.
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we have been studying the economic impact and the epa impact for the past 15 years and yet we have epa mandating what we can and can't do without congressional approval. the transportation costs fund six to $8 more per barrel to bring that out of canada through a ford shale it down bring it through and into a refinery. yet we have some people who are trying to help -- and yet we are taxing them severely by keeping the price of crude up instead of bringing these pipelines and which would substantially reduce the cost of oil and other byproducts and reduce the tasks --
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tasks that people have to pay at the pump. the politics to me is the villain of all of this and people who have -- [inaudible] >> host: russell evans? >> guest: there is no doubt that there's a gap in transportation costs and really two questions i heard. the transportation cost gap in the will of the epa with the same policy. they there increasingly interesting opportunities. if i can buy fuel and find some way to ship it, allen through gulf coast refinery or east coast refineries to an upper midwest refinery and sell it at the higher price it gives me an opportunity to make a return on the transportation alone. we are seeing interesting things happen right now that are
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interesting side discussion that a result of the price gap that exists like louisiana sweet crude that service theater fuels for refineries in the gulf coast and other refineries in the united states. on the epa site i have had the opportunity to do research and examine some of the policies and research efforts coming out of predatory bodies not just the epa in washington d.c. and i share some of the callers concerns of the quality and the research that is coming out. you certainly hope that overall those are isolated incidents in overall i believe it's true still and i hope it's true that the regulatorregulator y industries like the epa and the bureau of land management that oversees drilling and operation
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procedures on federal and native american lands is really not driven by either an industry agenda or an environmental agenda but is driven by good faith review process is to establish the best policies given the best available information. i think the epa largely strives to a attain that but that little bit bit that i have seen certainly stands further refinement as well. >> host: russell evans the caller talked about the price at the pump but also the price of oil per barrel. why is it around 90 some dollars a barrel? weighs the price of gas high at the pump given the production in this country is on the rise? >> yeah. the whole topic of how crude oil is priced is tremendously interesting. i am not sure i could do it
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justice in just a few minutes but you have short-term effects and supply and demand-driven. it really has more to do with market structure. ultimately in the long run it will have to do with overall production and extraction costs. we have seen crude oil prices move higher and well over $100 and $90 with the gap persisting in spite of production. the gap here is, the discount of west texas is a function of the excess supply that for a long time has been bottled up in cushing which has been alleviated little bit as we get infrastructure put in place. then on the refined gasoline side there whole host of factors that affects pricing. crude oil is certainly one of them in a large explanatory factor. we see nationally in spite of oil prices right now we are fine
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gas prices -- refinery gas prices are coming down. we have seen headlines in the local newspaper gases coming under $3 in oklahoma we are enjoying gasoline prices under $3 a gallon. we do see that connection but the connection is not always as explicit you might think it would be given the short and longer dynamics affecting crude oil pricing in a myriad of factors including environmental concerns specific blending that has to take place refining capacity where refiners go off-line for scheduled maintenance and all those other factors that influence the price of refined gasoline. the connection is not always as clear. as consumers would like it to be if you look at the price of a barrel of crude. it's not always as quick.
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>> host: another few are on twitter wants to know can we break away from the worldwide price of a barrel of oil but their own u.s. advance fossil fuel infrastructure? >> guest: that's an interesting question. i still think eventually west texas prices will come back in balance with crude prices. that relationship will revert back to its long-term relationship. remember west texas intermediate is a higher grade of fuel and historically traded at a slight premium of the dollar or two a barrel at a considerable discount. i think, my perception going forward over the next 10, 20 or 30 years is that the infrastructure in place in particular on the east coast and gulf coast that the east coast in particular to comport crude from overseas. i think as long as those imports are there and the
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infrastructures in place place in the transportation costs associated are consistent with getting the fuel from european markets into the east coast i suspect they will continue to use the as their primary fuel source for refining purposes. it's much more likely -- i'm sorry, go ahead. >> host: go ahead and finish your thought mr. russell -- mr. evans. >> guest: is much more likely we will export refined products from the gulf coast into south america but the markets and per prices will remain linked. i don't think we envision cutting off the crude oil exports. when we talk about energy independence. klesko our energy in cushing oklahoma. 300 storage tanks and he can see
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the google image right there from so-called tank farms and their 13 companies that operate those in cushing oklahoma. joe is an independent from there. i met joe, you are on the air. cocoa good morning. how are you all this morning? >> host: good morning. >> guest: at the 20-inch pipeline that runs across my property. i flipped out here for over 20 years and i've never had a problem -- i have lived out here for over 20 years and i've never had a problem with pipelines leaking or anything. what i want to say is their biggest problem is they are regulating to death the refineries. if you try to build a refinery give to deal with the epa and the regulations are so stringent that if they started today by the time they would give a pipeline to refinery would be
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finished they would be regulated out of business. they can't keep up with the regulations. i understand prior to the elections, a few weeks prior to the election there were 390 different regulations in the call industry. the people here in cushing right now were in a huge from building new tanks. these tanks are not being built by cushing. these tanks are being built by people all over the united states and the economy is unbelievable. >> host: what is it doing to the local economy, joe? >> caller: it's fantastic. the housing here, everything is full. it's not people just from here locally or in the state of oklahoma. they are from all over the country. consequently i would say the
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money that these people are paid and they are paid very well, it's not always benefiting cushing but benefitinbenefitin g people all of the united states, different towns and areas. >> host: let's take that economic point. russell evans. >> guest: first of all to the regulation point i empathize with regulators have tried to balance the need for energy development in the concerns for environmental safety. often when i speak to our local city councils or speak at our state state state capitol or when i'm in washington d.c. dealing with an epa stakeholder workshop or a delegation of the capital i often joke that my job is the easy job. just generate the report and spark a discussion but those on the other side of the table are the ones who have to make policies and rules and regulations and i emphasize with the experience he is seen with with the pipeline on his field or on his land and worry perhaps the balance is off in one
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direction or the other. we have had several colors indicate they're concerned that the balance is off in the other direction. i think it's a difficult question. there is no doubt though as i drove revenue from oklahoma city you could see several wells being drilled in the platforms they are. you drive in anti-sikh pipeline pipe storage facilities and pipeline waiting to be installed in infrastructure added to existing lines here and there is no doubt areas of oklahoma including cushing are enjoying the economic reality of having that development. to joe's point to be sure the housing restaurants, local business services cushing will enjoy the economic reality for facilities the rental payments
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in the land in the landowners. all of that is significant in oklahoma to cushing. >> host: ron tweets and long-term costs are based on extraction and production. environmental costs have to add something. how much? >> guest: absolutely, if only we knew, right? that's the right answer the question and it would be easy as it comes to identify the costs for crude oil. the official price should reflect the production cost and extraction costs. it should also reflect any environmental spillover costs as a result of the production of the fuel. it should also include the user costs associated with using a barrel of a dependable resource that will be available for future generations. when we think about the price of a barrel of cute crude oil i ask my students when we look at crude oil markets and look at the prices do we believe the price is the efficient exemplary
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efficient price across time periods that would reflect both production costs and a murmur to and the user costs in using a dependable resource? it's a fantastic question and if only we knew the exact answer reforming the right policy would be a lot easier. >> host: john is in winter haven florida, independent caller. >> caller: hello. i have a comment about the keystone pipeline of why it's not being built in by the presence of blocking it. the oil being produced is coming by rail. there is the rail company burlington northern owned by the president's friend warren buffett. would you like to comment on that please? thank you. >> guest: yes, certainly i don't have the expertise required to comment on the
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precedence social circles and the dynamics of how that might influence policy but again a broader comment. there is no doubt that the fields will be produced. it's a tremendous source of energy and content in western canada at the oilfields is tremendous. it will be produced and conducted to end-users one where the other whether the users are in the united states or overseas in other countries. we will have have to connect those fields of production at some point and i wish i knew when the pipeline and the crude process would occur. i have to imagine it happens at some point. it's too high on the infrastructure picture not to develop it. .. know precisely,t
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to be frank, but as you noted earlier, we do know that we are already importing some of that oil. we have the infrastructure in place to get some of that oil from fields of production in here to cushing to be blended and distributed. it is really a question about accommodating the scope of production and accommodating how that accommodates the production inthe bakken shale, or here traditional places. as you think about that it is a question of how you tie that in efficiently and get it where it needs to go. host: russell evans, energy specialist with oklahoma university's business school. thank you for your time. guest: it is fantastic. a beautiful morning here in cushing, oklahoma. cold, solooks a little thank you for hanging with us. guest: thank you.
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host: next we will talk to brad shamla from enbridge, and he will take your questions about how pipeline infrastructure works -- how it is built, maintained and monitored, and first, a little more from our visit to pushing. we talked to brett anderson about the price of oil over the years. [video clip] i can remember it at three dollars a barrel. it was an interesting thing. it peaked at about $30 or $40 a thenl in 1981 or 1982, and it went down as recently as 1999 -- this is not what many people realize -- oil fell to less than
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$10 a barrel. 1999, just 13, 14 years ago. it was less than $10, and then $140, andd up to drifted back to around where it is today. producer, if it is $100 a barrel, he does not get $100, he has to pay the royalty, which isd to be 1/8, and now it 3/16, or 25%. it has to pay for expenses and for taking care of that big monster, and if anything breaks down, you have to pay for that too. it is a tough business, but it is a good business. host: our coverage from cushing, oklahoma, it can use this morning where 13 oil companies
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are in the business of transporting and storing oil from all over the country. millions of barrels of oil get pumped out of cushing, and with enbridge. shamla from let's begin with your company, enbridge, and what you do in transporting oil. how does it work? greta.good morning, our money is involved with the transportation of crude oil and we are also involved with natural gas gathering and redistribution and green energy. on the pipeline side, with with wood pipelines in particular, we provide the important link between the production area, the fields and the end-users -- the refineries. that is the link that we provide. we do take the oil near the source in the production field. we do move it through the system with a series of pump stations
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moving through our pipeline stations, through cushing here, and on to the end refinery. the: we are you located in united states, and where are you headquartered? guest: we are a north american energy company. we are headquartered in calgary, alberta. we have offices in houston, texas, edmonton, alberta, and toronto in terms of our enbridge .ompany area -- company host: and your pipe infrastructure, where is it in the united states? where do your pipes run? guest: our pipe infrastructure, our main system, would flow from western north america, western .anada, alberta the main system would enter the u.s. in north dakota, flow
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across north dakota, desoto, wisconsin, michigan, indiana, illinois, and now we have a pipeline system we are developing from the midcontinent area to the u.s. gulf coast, and that, of course, takes us right through cushing, oklahoma. host: how old are your pipelines and are you building new ones? range inr pipelines age. the first pipeline that we build on our system -- our company was -- it was built up over a series of projects over the next several decades. today.building new pipe we are building and replacing pipe in some areas. so, our system is a combination of pipes that started with the start of our company in 1950.
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,ost: how do you decide where and when, and how you are going to build a pipeline? guest: so, really, markets will drive how pipelines get tilt. in the production get built. in the u.s., you see a lot of development in the shell space. our numbers are up about 2 million barrels a day over the last two years, which is tremendous, and we are back to levels that we have not seen since the 1980's, and the projection is we are going into new production areas. that growth is driving the pipeline infrastructure and the need for more pipeline infrastructure, to make sure we provide that link out of the production areas and into the end-users. iswhat is the -- host: what the process for building a pipeline -- how do you go about
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construction, laws you have to follow, environmental concerns, etc.? guest: absolutely. the environment is paramount. public safety is key. be process we follow would very much from conception identifying where does the pipeline generally need to go from and to, and then we look more specifically at routing, looking to minimize the footprint, aching sure we are putting the pipes in the right locations. a great deal of work goes into the design to safely design the system. we design everything from the mill to the steel and the steel properties, to how it is welded together, to the type of coding system that would go on it, how the pipeline is protected once it is in the ground, and then, from there, it really transitions into operations and
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how we monitor the system from both a control perspective -- and in the control center it is a seven days a week, 24 hours a day operation and monitoring the we monitor also how the pipeline infrastructure and the inspections done to make sure we know what is going on with those pipeline systems as they are in operation. host: an earlier caller from michigan talked about this till there and said -- the spill there and said that it was enbridge's pipe, there was not proper procedure there and it has not been cleaned up. brad shamla, i want to give you a chance to respond. guest: there was a leak in marshall, michigan, it was an enbridge spill, and it was a significant environmental incident, and to be honest, greta, it was the worst day in
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our history. we took full responsibility for that spill from day one. it was a dark day for us and also for the community and the people of marshall. we made a commitment to the people of marshall that we will not leave michigan until that spill is cleaned up, and we are there today working on that cleanup. host: how do you go about monitoring the oil and how it is ?lowing through the pipelines explain the technology, and is it adequate? do you have to have this type of safety technology in old pipelines as well as the new ones? , so, as far as the technology, it is a very sophisticated technology. the computer system, the data systems that are used, we are able to monitor the pressure in
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the pipelines at any given time, pumps and are coming on and off, and we have built in leak detection systems that will monitor the flows, the amount of oil going into the pipeline system and coming out of the pipeline system for different segments to ensure that we are looking for any deviation that could signal a problem. your question as to whether we knew it in old pipes and new pipes, we absolutely do it in every pipeline that we operate, regardless of when it was built. the same technology would apply new and all of our pipeline systems, and that technology is emerging and being updated on a regular basis. host: talk about who transports oil with you. who are your clients? guest: so, we have a pretty diverse client base in terms of
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who ships on our system. that client base would include producing companies, so, large companies that are producing, whether they are in north in westernken shale, canada, or in the cushing area, the producers would be one client base that we have. take spacers also and ship on our system, so the various refiners in kansas, oklahoma, texas, the u.s. gulf onst, would also be shippers our system, and finally there is a group of customers that would be the marketers or the people that would provide the commercial link between the production and the field and the end-users. those three large client races would be those that ship on our system. would be those that
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ship on our system. host: one is a decision made from a client -- we want to move our oil today -- how does that work? guest: we ship on a monthly basis. we take nominations from interested parties to ship on our system on a monthly basis, and then create a monthly schedule. so, the nominations would come in. they would put their orders in, basically. we look at what we are capable of moving. we set up a schedule and that schedule applies to that given month. host: we want to get our viewers involved. canyon, how, dog small of a leak can you detect with your technology? brad shamla? brad shamla with enbridge? guest: yes. host: can you hear me, sorry?
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guest: yes i can. the question was on our leak detection capabilities. our leak detection, as i said, it is technology that is emerging. our technology allows us to pick up a fairly small leak in terms of size, but the leak detection system is not our only method. we do leak detection on a regular races. ---basis. flying onweeks we are the right away -- right-of-way. host: jim on twitter wants to know, brad, are the pipelines full all of the time? guest: the pipelines are full all of the time. you do not empty a pipeline
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system. pipelines running various speeds, if you will, depending on the monthly schedule and the pumping. so, we have the capability of stations in the which would slow down the flow, but generally, the pipes are full and flowing full all the time. twitter -- the technical problem with pipelines is friction loss which wears on the pipeline. guest: i am not sure as far as pipeline ande fitting. in the auto industry, oil is to not wear. our system, and we inspect and a regular frequency, so we have a good long of what is going on.
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ofwalt of what is -- logh what is going on on our system. host: how you keep the oil flowing? guest: pipes along the pipeline system would propel the oil to the next pump station where it -- pushed further down the line. host: brad shamla, how much does it cost to construct a pipeline? guest: so, construction costs would very based on the region you are in. pipeline we are building from flanagan, illinois, down to cushing, here, it is a 36 inch pipeline, and the overall cost is about $2.8 billion. host: what is the most expensive part of it?
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guest: it is a combination. costs,e your material the cost of steel, the steel pipes, the pumps, and all of the fittings, the cost of right-of- way, working with landowners on right-of-way, and right-of-way compensation. you have construction costs, the labor component, and the many people put to work on the pipelines installing it. host: bill in texas. republican caller. you are on the air. caller: good morning. mr. brad shamla, as i turned on this morning for c-span, i noticed that the location of cushing was decided on sometime during world war ii to keep it away from the coast, but if i were a nasty terrorist or whatever, it would seem to me
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, it if i had a few icbm's could not this country out in a few seconds by releasing in a central point with so much in cushing. why have we not diversified the location? there is 20 of land as you travel around the country. we certainly -- plenty of land as you travel around the country. we should consider diversifying the locations. guest: it is a good point. cushing is a significant interconnection, but it is not the own the interconnection, and there is some redundancy built into how barrels move. on the storage piece, there is an ability in a situation where there would be problems with the tank age heard you could bypass and flow through. it is something we could do in a scenario where we needed to.
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it is a good point, why put all of your eggs in one basket. texas.icki in independent caller -- virginia. independent caller. texas. independent caller. to my: this is very close house, and i find a lot of information lacking. there is a fuel pipeline going to texas right now. powerrpose is to ship san -- sand tar. the question was good about the fitting. they have to break it down with toxic chemicals. this company has a history of weeks. the process of telling where the pressure is gone, once that leaks into your water, your
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water is contaminated. there are many issues. the sand tar is not going to make a big difference in our energy economic environment. there are a lot of questions and answers not been put forth to the american public. my question is when will they let us know what is coming through the pipeline and why he did not mention that the pipeline is already in construction from cushing to the coast of texas because i can see it from my house? host: all right. let's get a response. so, safety is paramount to building a pipeline system and to our operation of a pipeline system. our social license to operate is dependent on safe operation of pipeline systems, and there would be no other way to build and operate a pipeline system. we put a lot of time, effort,
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and energy into designing and ensuring that we are building safe pipeline systems, and to the ongoing maintenance of that pipeline system. host: brad shamla's, what is enbridge's safety record? safety recordrall , greta, you have to look at what we do on a daily basis. delivers about 2.5 million barrels of oil per day, and over an annual basis, is a considerable amount. -- it is a considerable amount. when you look at the overall record of our company, the pipeline industry, it is very good in terms of that delivered product and providing that service. host: safer than -- we learned earlier, and we have seen reports -- safer to do it by
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pipe than from rail and truck. here is bill who says the cost of shipping oil in the united states by rally is about four dollars to five dollars more expensive per barrel. is that true question mark -- true? guest: it can be higher than that based on where it is going. most efficienthe and lowest means of transportation of energy. host: how much do you charge your clients -- give us an example of how much you would charge a shipper to move their oil for them, and then store it. guest: so, that would very in terms of shippers. i do not have all of the data in terms of costs per barrel. generally, speaking -- generally
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speaking, it would be less than one dollar for some of the storage in cushing. transportation through pipeline segments would depend on the amount, and it is something that is regulated, so on a cost-to- service basis, you would look at what are your requirements for power, for the capital to build the systems, and then you recover that over an extended time, 15 or 20 years. host: scott is in state college, pennsylvania. independent caller. caller: hello. host: you are on the air. go ahead. greta, andnk you, thank you, c-span, forgiving the voice of america to television. brad, my question is, first of all, is your company privately owned, or do you have a parent company such as a larger oil
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company, and secondarily, can i ask what your background is -- fluid transportation or public relations question mark thank you -- relations? thank you. question., very good we are a publicly traded company. the enbridge company trades in the u.s. and canada. enbridge energy partners is a limited partnership that has a different set of public owners, if you will. engineering. is in i have a civil engineering degree from the university of minnesota, and also a business degree from the university of minnesota. host: patrick, michigan. independent caller. caller: how are you doing? thank you for taking my call. host: good morning. caller: these oil pipelines were
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meant to ship oil, and from what i have read they are not meant to ship tar sands, and i have also read there is an increase on the rail cars being built, and the spill that happen in marshall, michigan, they claim that it happened over land when it happened overwater. i will get off the air. thank you. -- -- brad shamla -- so, the product -- sorry, greta? host: if you wanted to respond about thishe said billion michigan, but the first part, we addressed the issue of oil being moved by rail, but on the issue of coming through canada, and dealing with it on the pipelines -- guest: yes?
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host: the united states has been importing tar sands from canada for 25 years, if i understand correctly, and you are already doing it? companies like enbridge are already doing it? guest: absolutely. tar sands have been shipped safely for more than 30 years. a recent study from the national academy of science looks specifically at the properties of blended and. itis a good report, and concludes that oil sands crude is exactly that, crude oil. we move crude through the system. we do not transport sand. we move crude oil through the system, and that is part of our operation. the caller mentioned this billion michigan, saying that happened on water, and not on spill ind -- the michigan, saying that happened
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on water, and not on the ground. brad shamla? guest: it occurred on the ground which flowed into the kalamazoo river, so i can understand the confusion on that point. host: nick. alexandria, virginia. independent. earlier, was listening and i heard that there was going queue. one-month long would it not be more efficient to reduce the key with the idea of the pipeline is to effectively move oil across the country? do i. -- thank you. so pipeline restrictions, or a lack of pipeline infrastructure, as we have seen, can cause some major impacts to market, so when that
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happens you get things like fuel prices going up at the pump, and things like that. pipelinecking infrastructure in america. we are building that critical infrastructure to make sure we can move the production to the markets efficient way, and that efficient movement includes not having long queues or lineups. host: brad shamla, what is the near future for enbridge as we see the rise of reduction increasing in the -- production increasing in the united states? guest: it is an exciting time for our company, for our industry overall. the production overall is driving significant needs for infrastructure.
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we have about $26 billion in secured projects that are underway over the next two-2-3 years, and that includes pipeline infrastructure into and out of cushing, oklahoma, here. , we say thankmla you for joining us. guest: thank you, greta. host: our conversation continues, looking at cushing, oklahoma, and the role it plays in the oil industry. we want to go up to new york now, where daniel yergin is joining us. "the the author of both quest," and "the prize." you have been to cushing, oklahoma. how would you describe it? guest: you see all of the tanks, and it is quiet, and you have
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the oil moving at the stately rate of four miles per hour. you realizealm, yet it is one of the notable points in the oil industry, and we see on the reports of what the oil price was, it all goes back to cushing, which has been a great gathering point, really, for about a century now. host: why does it all go back to cushing? guest: there was an oil field discovered there before the first world war and it was called the queen of the oil fields, and at one point it provided 22% of the u.s. total oil, and a lot of the oil produced by the u.s. army in europe was made in cushing, oklahoma, and the oil system was old, but the pipeline system had been set up to move supplies around, so it became the gathering point.
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it all flowed through cushing and went out to other pipelines, two refineries around the country to make products like gasoline, jet fuel, and heating oil that people need. host: some have called it the capital of the american oil kingdom. would you agree with that? guest: i would say it is a very key point in the oil industry. it is funny, when it was a boom town and they were producing a lot of oil there, people said any red blooded american would catch the oil fever there, for aw it is very calm, and it is central point of gathering, really, for north american oil. host: and you are in new york. let's go back to the wall street component. businessweek" reported that each day some 900,000 oil future options and contracts are traded on the new
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york mercantile stock exchange and oil in cushing is what is bought and sold. why is that? guest: when you have a futures market, as you do for oil, you need a delivery point. not everybody takes delivery. only a fraction does. you need some physical embodiment of oil, and it is the oil in cushing that is used to backup, or the reference point for the prices you have in the futures market that people trade. here, in new york, and around the world, people are trading constantly, and vast amounts of money flow back and forth, he yet it is all connected -- yet it is all connected to the oils -- barrels of oil in cushing, oklahoma. host: recently there was a glut in pushing. why is that?
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guest: what has happened, and this is what you are talking about before, the u.s. oil picture has changed. in 2008, the notion was we are going to run out of oil, and since that time, all production has increased 56%. the oil is coming from new places like north dakota, more and more oil from canada, the oilsands and other parts of the country. in,ave more supply coming and our pipeline system needs to catch up with these new sources of oil. no one, five years ago, would have said that north dakota would be the second highest oil producing state in the country ahead of alaska, i have oklahoma -- a head of oklahoma. the pipelines are backed up in cushing, and any more pipelines -- the pipeline system needs to catch up with this momentous change in u.s. oil supply.
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because that is happening, you have seen copies like enbridge reverse their pipeline and other companies do the same. transcanada has gone ahead with the south leg of their keystone project, and that should be up and running soon. ast will that do as far getting the oil produced to markets? guest: what used to happen is oil would come in tankers from the middle east, the refined in texas or cushing, and now, it is like a u-turn. you have this oil produced in the u.s. that has to go to the gulf coast, where half of our refining capacity is, and a lot of products like gasoline are made. the pipelines are being turned around. it is interesting that on the white house website there is a photograph of president obama standing in front of these large pipes that you referred to, which is the southern leg of the keystone xl pipeline, and he was
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there to encourage that to be built, so that is going ahead. him: what do you make of going to that area, stillwater, which is very close to cushing, oklahoma -- a democratic president going there, talking about his energy policy? i think you have seen a real change from where we were when the obama administration came in, a time when this shortage view was really there, and if you go forward now, and i have found myself looking at his state of the union address, where he did not talk about oil and national gas at the beginning, and now he talks about and all of the above energy policy area everything -- policy. it reflects that he went to cushing, and a focus on jobs that are a result of this developing.
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it is a shift and it reflects the way our energy picture has changed rather dramatically from what would have been expected a half decade ago. host: the president, just last week, was pitching the u.s. economy to foreign investors, saying companies are moving here and more should move here because energy prices will be lower. really interesting. during the government shutdown, he gave a press conference and he said our oil and gas production is greater than that of russia, and he said some good things are happening. i was at that press conference that the department of commerce put on, and we have gained from inexpensive natural gas. i was in europe, and you talk to businesses there, and they will not invest in europe anymore. they are in the united states, and there is over $100 billion of investments scheduled to come into the united states because we have a more favorable energy
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position than any of the other industrial countries. when i was in china, the chinese were worried about competition from the united states. today, mr.e talking daniel yergin, on the anniversary of richard nixon's energy independence speech. what do you think of that? guest: there are a lot of echoes. nixon gave that speech, the company was -- country was in a panic. his administration was collapsing, too, because of watergate, and he gives a speech, just like john kennedy promised we would get a man on the moon, we will be energy independent in seven years. . .
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>> now because of the production and the fact we are more efficient and drive efficient cars, we are back to exactly the level of imports that we were at 40 years ago when richard nixon delivered his speech promising energy independence. >> host: author of "the guest," and his books are his pride, and joining us from new york to talk about the role the oil industry plays in the overall energy sector. tom, independent caller. hi, tom. >> caller: hi, could, in the future, the oil pipelines be
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transformed to transport water, negate the effect of drought on crop yields or is there on the way forward-thinking people looking at, perhaps creating water pipelines for the future in the country? thank you very much. >> guest: well, i think that we know that oil pipelines sometimes converted to carry natural gas and so forth and the directions change. i've not heard about pipelines nor do i think it would be -- doesn't strike me that's going to happen. to happen, they will be converted to carry water. obviously, water is a serious >> host: about pipelines because there's debate, and the concerns that surround that. nt s surround that. what is the approximate life
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expectancy of a pipeline and how deep are these pipelines buried in the ground? guest: i think that, we have pipelines in the country that were built in the 1950's even so going back to 1940's although they've been rebuilt over time. i don't know your previous caller would know, may be 10 feet or 15 feet. we have in the country, 182,000 miles of oil pipeline and keystone xl would add about 1% to that length. one of the things missing from the discussion is the fact that we have this very large system now that moves oil and pipelines sort of out of sight under ground except for kind of like those pipelines you were showing at the cushing.
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host: those pipelines have been in existence since the 50's and that oilsands have been coming from canada. guest: the real growth has been in the last 1990's. the amount of oil just from the oilsands producing there, you have to get into perspective. that volume is greater than the volume of output from five of the opec countries. the u.s. and canada will will be really tied together in terms of energy. you look at the disruptions in the middle east and the instability there. people kind of need to keep in mind energy security too, the reliability of supplies. host: canadian government lobbying washington this week and the washington post taking out a half page ad canada,
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canada america's largest oil supplier united states brings them more from canada. david is waiting to talk to you -- guest: that is interesting. i think i found recent years people assume that all of our oil imports comes from the middle east. but canada is by far our largers supplier. host: david from louisiana, democratic caller. caller: i like to make a comment. in regarding to ethanol, this is a really disastrous thing. few mileage decrease to almost 15 to 20 percent. i happen to be lucky in my area. i have access to non-ethanol
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fuel. i can put the ethanol in and get the 22 miles but if i put in the non-ethanol, i get 26 to 28 miles per gallon. the toll that it's taking on the land to grow the corn, to make this ethanol you're depleting your soil. a possibility down the road of having to use this land to grow some sustainable crops and edible crops. that's my comment, thank you. guest: greta? yes, okay. you know, the requirements for using ethanol were really put in back in the early part of the beginning of the century, 2007 when there was great fear of shortage. obviously, it's had a lot of support from farm states.
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the pluses are that it's brought income into those areas. it kept young people in the area but it also has its cost. about half of our corn crop goes to ethanol. as the caller pointed out, you do get less mile all from it. in terms of its impact, it's somewhat less. if you pull into a gas station, you'll look and you'll normally say 10% of gasoline is actually ethanol. host: are you for all of the above strategy in we heard from the president. we continue with our production of oil and natural gas but we also continue incentives for alternative energy? guest: yes, i think all of the above strategy is the right way to go because we have a big diversified economy. there's not a single solution to do. i think it's been very beneficial that happened to our
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economy, this unconventional and gas revolution, has created something over two million jobs last year and it increased household disposable income by about $1200. at the same time i think the renewables, the alternatives are very important. part of the mix for the future. wind is now 5% of our electricity. you mentioned that conference where president obama spoke last week, i chaired the energy panel there and it was someone from the white house who talked about all of the above energy policy and really occurred to me that we have in the united states now with other countries don't have, which is all of the above energy opportunity. that's a good thing for our economy. we have to continue the research. thinking not only about tomorrow but thinking about five, 10, 20 years from now. host: today on "washington journal," we're focusing on the
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oil side of the energy sector, taking a look at cushing, oklahoma, introducing you to that town. a town of 8000 with the capacity to hold nearly 80 million barrels of oil. it's the largest storage felt in our country. tomorrow on the "washington journal," our whole program will be looking at alternative energy, solar, wind and other sources of alternative energy. patrick in granite bay, california, republican caller. you're up next, go ahead. caller: my name is patrick, how are you? guest: fine, thank you. host: go ahead please. caller: how are you sir? guest: okay. caller: i have a question regarding oil and alternative energy. when t. boone pickens came out
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-- what do we do with all of this oil? if we do put it in a pipeline. it's going to go out of our country. even if we have all the oil in the world, we can only refine so much. what is the end game? guest: the end game, i think is a long game. we're not short of refining capacity in the united states. one reason we're not short of refining capacity is because not only are we producing more but our demand our consumption gone down because of efficient automobiles. to just give you another example, if i can, we were mentioning before about president nixon project independence. since he gave that speech and sense the oil crisis, our economy has tripled and our oil
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consumption a 7% higher . california is a particular case because it's very hard to build anything in california. even to build a solar farm can be very controversial. so california has refineries there that have been there historically and then bring its oil elsewhere. california has higher gasoline prices than other parts of the country because of the various restrictions that are there. shortage refinery capacity used to look like a big issue because of the change in the market is not a big issue as it was before. california is the third or fourth largest oil producer in the united states. now by rail car, additional crude oil comes into the state and goes to those refineries still there and ends up in the gas tanks of motorist.
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host: chuck tweets this. we need high tax of exports of refined oil products. guest: i don't understand what the purpose of that would be except to tax us out of the market. refining is a matter of factory business. we still import lot more oil than we export. the exports we do, you take a barrel of oil and you put it through a refinery system, you end up with a lot of different products. some of it like gasoline, we use a lot of it. others like fuel oil, we don't use much anymore because we don't put oil into electricity generation anymore. you export some of your products as well and that's an income that flows back to the united states. i think what we don't want to do is make ourselves uncompetitive. if i can say the economy, we're benefiting. the economy in terms our g.d.p.
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and government revenues is benefiting from what's happening in the energy sector. unconventional oil and gas growth, generated we calculated $74 billion of government revenues last year from the normal taxes that people pay. host: greg is next in missouri, independent caller. caller: good morning greta and daniel. i want to ask you, how difficult is it to build oil refineries in the u.s. and why are most of them on the gulf coast? guest: most of them on the gulf coast because that has been the great center of really the oil and gas industry. there's historic basis of it going back to the development of texas and the oklahoma oil fields. we were importing a lot of oil. the crude oil would arrive on the gulf coast and be refined and sent out to the country.
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katrina and rita hurricanes hit, dallas airport in washington, ran out of jet fuel because that jet fuel was being refined in the gulf coast and sent up. if you're in texas, i think you can expand a refinery. there's a big project, there's a $10 billion project to upgrade one refinery. to get a permit in most places to build a new refinery, even it it made sense, would be a very lengthy regulatory process. host: joy in california, democratic caller. caller: good morning. past years, we talk about energy independence. i am all for drilling oil here
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in the united states if it stayed in the united states. we didn't put -- we ship it and then it goes to opec and that we're not really benefiting from it. then we build the refineries of pipelines, those are temporary. i feel the same way about nuclear. if we're going to -- i'm originally from nevada, and close to yucca mountain, if you want a nuclear power plant, your state stores the waste. i just don't see correlation between the prices, the more oil we drill, doesn't necessarily mean the prices that we pay at the pump are lower.
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guest: that's a lot of questions. let me say that i think that if the u.s. has not seen increase in oil production that we're seeing today, we would be looking at much higher gasoline prices, we would be talking about a new oil crisis because you have to look outside the united states. you look at north africa, you look at libya, you look at nigeria and west africa. you look at iraq and number of countries in fact, there's a disruption that's going on in world oil supply and the growth of u.s. supplies helped to balance that out. think we would be looking -- people would be talking and complaining about much higher prices at the pump had we not seen this additional supply, which made us more secure. we do export some product that is crude oil after its gone through the refineries, it doesn't go to opec, it goes to
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countries like brazil. one of the products you make when you turn that oil into crude oil and different products is diesel. we don't use so much diesel as europe. we export diesel fuel to europe. it kind of all balances out. primarily, the oil that we refine in this country is used in this country. the nuclear thing, that opens up a whole other question. nuclear is about 20% of our electricity today so it's one of the sort foundations of our electric supply. host: on this issue of energy security, sense the u.s. already has energy security, where does this pipe oil go? guest: well, if there's a disruption in the world market, say we didn't have this oil, even though the disruption is in
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some other part of the world. at the end of the day, there's only one world oil market, and that world oil market prices back to cushing. we still import 35% of our oil today. we're not self-sufficient. where does the oil go? it goes into people's gasoline tanks in their cars. it goes into jet planes that fly people, it goes into shipping. oil is primarily these days, more than anything else used as a transportation fuel. host: how much is used for plastics? guest: i don't know that number. that reminds me of the sce in is
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plastics. chemicals are also made from natural gas. one reason we're getting over $100 billion of new investment coming into the united states is the chemical companies coming, it convert bundle supplies of natural gas we have now into chemicals and plastics. host: carl in fredericksburg, virginia, independent caller. caller: i have two comments. there's a wonderful documentary on fracking. they filed in upstate new york where 15 million people get their water. the fracturing was sold on tv and commercials. i think that's number one problem. number two is that the oil industry, if you go back, wherever the time line is to where we were paying $28 a
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barrel to the saudis, we raised it so much they were upset. our oil companies went in and made a deal but they would give them half the additional profit. our oil prices should be down to half of what it is today. we shouldn't be exporting anything. we should take care of that and replace it because it's polluting the whole nation. guest: well, several different points. first on the water. the hydraulic fracturing even in the state of texas, is less than one percent of the total water use that's there. it may surprise you to know that the production and drilling of natural gas and oil is actually a highly regulated activity, much of it regulated by state and if there's a spill or surface spill or something, there are penalties there. so far, i was on the commission that president obama had set up
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to look at the environmental issues around shell gas and the conclusion of the sciences on the commission is that it's industrial activity that needs to be managed. it doesn't fit at all what you describe. there is no shell gas development in the state of new york. although there is next door in pennsylvania. i don't think your facts are correct on oil prices about 50/50. most countries, first of all, u.s. old companies don't produce in many of the middle east countries like to saudi arabiaians. secondly where countries do produce, approximately 80 to 85 percent of every dollar of revenue goes to the host government. and 15 or 20 percent will go to
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the oil companies that develop it. that's the current standard in the world. host: democrat on twitter wants to ask about natural gas. i would like to know why the price of natural gas in my home is going up? guest: i don't know why that's happening either. i don't know what part of the country you're in. most natural gas bills are going down. also electricity bills are going down when the electricity is made with natural gas. i think it's a puzzle that your prices are going up. one reason, increased disposable income for households, they're spending less to heat their homes with natural gas. i don't know. better look at that bill carefully. host: we'll go to michael, charlotte, north carolina, republican caller. caller: before i get to my point about ethanol, i want to report to you, i go on a website called gasbuddy.com. i was a mile from the south
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carolina border. i can buy a gallon of gas for $2.98 and two miles up in north carolina, it's $3.33 a gallon. it reports that missouri is the cheapest place in the country to buy gas at $2.87 a gallon. guest: are you filling up your car everyday? caller: , no i like to follow the trend and see what's happening. guest: you're doing a lot of driving. caller: no, it takes two seconds and it's a great little website. people report and you can basically go to almost any intersection in the united states to find it. guest: internet made pricing more transparent. caller: exactly. you mentioned the loss of miles per gallon with regard to ethanol. what i don't think -- the part you should have finished with, respectively, the fact that usage and reduction in miles per
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gallon, actually based upon pricing of a gallon of gas is what you have to make up and also the fact that you lose about 15 to 18 or percent of miles per gallon. you're getting less mileage with the 10% ethanol. thus you're in effect using more oil as over all consumption because you have to make up that miles per gallon by using more gasoline. the other interesting thing you might want to check into is, what is the cap based upon a gallon of gasoline that's hundred percent oil or gasoline or it's in the 90/10. if it's the the 90/10 mix, it changes the whole equation. guest: ethanol is 10% of your total every gallon 10% is ethanol.
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i don't think the mileage loss would be that great. the mileage loss, i think with that 10% you cite. first of all, i love this stuff about gas buddy. that's terrific. i think the other point the legislation that was put into effect says that in fact, we start to have to use more ethanol or biofuels. volumes has to increase. this is a big problem for two reasons. one because our gasoline consumption is a lot elower than people thought it will be in 2005 and 2007 when legislation was passed. and two, it was passed in the view not only we would leapfrog over ethanol to what was considered the break through, ethanol not made from corn or made from waste products.
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it turned out that has not -- those products are not there yet. legislation was passed. you have to use something in your car that doesn't exist. i think one of the things that both the administration and the congress will have to wrestle is to change the law so it becomes more realistic and doesn't try and push ethanol that doesn't exist yet and require that it be used. this will distort the gasoline markets. host: let me get in mary a republican caller. caller: i like to know about the penalty phase. the drillers, the drill wells and they skip that, why aren't they held more responsible for the damage that they do to farms because i got a humongous mess out here. i had oil in the creeks since
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2011. why aren't the drillers -- i don't have my rights yet, why aren't the people that rent the property that drill for oil? there's so many pipes in my ground, you couldn't plow a field. host: what about accountability? guest: kind of get the facts on the table. is this something recent? are they drilling on your property? host: i apologize, i let her go because we're running out of time with you mr. yergin. guest: i can't talk about the specifics. if you're looking at western pennsylvania, they tossed regulatory systems and most states have it. i don't know the specifics of that case. if that's what they've done,
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they're responsible and they should pay not only to fix it, they should pay the penalty and the fines levied. host: mr. yergin, two different headlines. this from the "washington journal," u.s. refiners don't care if keystone xl gets built. you have this from the washington times this week, last week, both sides on keystone agree that obama must act because this is going to be part of his legacy. guest: wow. that's true. refiners do care. you do have these large volumes. what's going to happen, if keystone isn't built, this oil will come into the united states by rail car. it's just dramatically increased. the pipeline is a simpler way to do it. they're bringing in oil and sort of seem like something john d.
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rockefeller would have been done. it becomes the modern way. the keystone xl has become a symbol that is far greater than the actual pipeline. this is the most famous pipeline in the world that hasn't yet been build. if we don't use the canadian oilsands, we'll import oil from venezuela which has the same carbon footprint. it looks like there may be some clarification. this is not only question of legacy but it's a very long running drama. host: daniel yergin author of the quest. thank you sir for your time. our conversation continues here on the "washington journal." taking a looking a look at the oil industry. specifically in cushing, oklahoma. 13 companies operate crude companies for the legislative
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side of this conversation, we're going to go. to capitol hill where senators james inhofe is joining us to talk about cushing, oklahoma. let me begin first with your health. you returned to washington after under going quadruple bypass surgery. guest: i discovered i didn't have clogged arteries. i would encourage people to get an m.r.i. and check up. i had to do four bypasses. now it's great. i feel good and i'm back on the job and now i realize i was more restricted than i was. once you check in, you don't have this instance to fiend out.
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i'm working with the heart association to help them to encourage people. i went in for a colonoscopy, they said your colon is fine. anyway, thank you for your concern and i'm back on the job. host: while you were gone, , you missed some fun. the government shut down. were you watching at home on how this place works? guest: you know, you see it as real people see it. i was watching. quite frankly it looked so foolish. they're arguing back and forth. egot phone calls from different members. orin hatch called me up. i was in the hospital. he said stay there, you're not missing neg. we went through this thing. i looked at it as an outsider would, i think i have a better perspective of some times how
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foolish we in washington look the way we're handling business. host: let's get to our conversation here. we've been focusing on cushing, oklahoma in your home state. a place where 300 farm tanks got the land. one tank can hold up to 500 plus barrels of oil. it's the largest storage facility in the country. what does it mean for the state of oklahoma? guest: the capacity, greta, to store 80 million. it's incredible what they can do there. it is clearly the crossroads of all the pipelines going in and out. what does it mean to us? there are about 8000 people in the town of cushing. if we can get this thing moving and the president had not stopped what was happening with the keystone pipeline coming in from the north, it would be about another 8000 people would be employed as we speak.
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we are in pretty good shape in oklahoma. i appreciate you covering this issue. the big problem here is, we have a president who's had a war on fossil fuel and the pipeline is just a small part of that. we're in a position right now where we can have tremendous advances in our economy. just look at oklahoma, texas, north dakota, we average about 4% unemployment rate. we need to go ahead and develop those resources that we have. while we've had this tremendous boost of some increase of 40% in our shell, that which is controlled by the federal government, actually had a reduction of 10%. it shows what we could do if we would open up and start developing resources. by the way, i have to correct the previous person who was on, the cheapest gas is not in missouri. it happens to be in oklahoma.
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it's $2.75 this morning. host: on keystone, i showed this headline to daniel yergin. u.s. refiners don't care if keystone gets built that's because railroads are carrying amounts of crude from canada down to the refineries reducing the need for the transcanada corporation project which is still awaiting approval for the u.s. government. a rival pipeline is expanding existing pipes to carry canadian crude and it doesn't feed federal permission because it's existing pipelines right aways. guest: you have to remember, when president obama came to cushing, oklahoma, he wasn't very well received at that time. to announce to him he would not stand in the way of the pipeline going to the south, we all know. he couldn't stop that. that didn't cross any international boundaries as it does coming down from alberta.
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there are other ways to moving it around, the most efficient way is through pipeline. i'm not an expert, i know if you're going to be moving oil, the cheapest way to do it is pipeline. the only objection -- some people have to look at the big picture and say why in the world would anyone object to a pipeline bringing the oil down through the united states? they try to say, well, we don't them to continue to go through the tar sands up in alberta. they are doing that anyway. their market, otherwise, is going to be china and not the united states where we would have the economic benefits of it. this is a win-win situation. if you believe, which i don't that you're damaging the environment when you're developing oil and gas, then even if you believe that, it's
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going to happen anyway because they're doing it and we can't control that. let's take advantage of this. to me, this relentless war on fossil fuel and the president had and things he tried to do. for example, how many people five years ago even knew who hydraulic fracturing is. this is something if it works for horizontal drilling and for hydraulic fracturing, we wouldn't be in this boom we're in now. let's get government out of the way and allow everyone to have the benefit of the opportunities we have in the development of fossil fuels. by the way, on the issue i heard you talking to previous caller about ethanol. that was something incidentally have nothing to do with partisan
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politics. most things are partisan. this is not. just geographic. i hate to say it. we're also a corn state but now people realize that ethanol is worse on the environment. it's worse on your car, mechanically. it's something that is -- all the arguments for it are gone now. host: what about the environmental concerns. the president said that it must not increase co2 emissions that it must be neutral. environmental groups say a draft report by the state department that it's pending because it does not consider the impact alberta sand oilsand cruise. those group --
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guest: i'm a conservative republican. i look back in the days when the financial backing of the democrat in washington were the labor unions, the trial lawyers. now it's the far left environmentalists. it's the move on.org, george soros and michael moore. we're talking about moving this to pipeline. you don't get the exposure outside find it's something that is bad. the most recent things we have had have shocked a lot of people, for example, now they're saying that the artic increased by 60% over the past short period of time when they said it was going to completely melt away. we now realize that co2 is helpful in the growth of trees and production of water. this whole thing has been something that has been used by
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the far left and of course obama, that's where he's coming from. he feels he has an obligation. you will hear a lot of this stuff in the case of hydrolic fracturing. we had hearing yesterday on ethane emissions. hydraulic fracturing is not the villain. if they can kill hydraulic fracturing, they can kill a lot of fossil fuel and that's their goal. who suffers for that, that's the economy and the american people. if you look at the marcellus change, you're talking about new york and pennsylvania, they could all be benefiting right now. the same as we are benefiting in the states where i mentioned.
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they can sit around and talk about the footprint of co2, that's still an area where the science is not settled in terms of global warming, climate change. by the way, if you don't believe that, read my book, greatest hopes. host: we are going to get the other voice here on the "washington journal" tomorrow. we'll talking to environmentalists as well as alternative energy companies about what they are doing when it comes to solar, wind and etcetera. we're talking with senator james inhofe joining us from capitol hill this morning because the senate is in session this week. the house is out and the senator here talk to us for a few more minutes. senator, if i could ask you about oil spills in this country. that's a great concern that we've heard about pipeline leaks in our country. we've been focusing on cushing, oklahoma and the pipelines that
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come into that city. lot of our viewers call up about pipeline regulations. do they need to be updated to retrofit old pipelines? guest: we're trying to understand what you said. our reception here is not very good. would you repeat what you want to ask me? host: i was asking about pipeline regulations. are they adequate? guest: yes. on regulation, it is. the regulation historically, the pipeline is primary for safety purposes. we have not had the accidents we had in the early stages. the regulation has been adequate. i would discourage further regulation. that got passed on to those of us who are consuming the products. host: senator jim inhofe republican of oklahoma sir.
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we thank you for your time and wish you great health and hope that you improve as you go along here. guest: thank you so much. host: we continue our conversation about cushing, oklahoma. our camera is live there from the terminal. that state where the tank farms got the land. there are over 300. they have the capacity to store nearly 80 million barrels of oil. they have self-dubbed themselves the pipe lean crossroads of the world. we'll take your phone calls on all of that here coming up. we had asked transcanada to join us. in the meantime, we spoke recently with transcanada when we were in cushing, oklahoma back in september and asked about the keystone xl pipeline. also this debate over how many
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jobs it will create. >> well, i think the actual number that for xl in the northern lake is not 20,000. that's the entire direct and indirect job number. i'm just talking about direct jobs for construction. we estimated about 4000 northern lake is something like 7000 jobs. that's a big project. that's a very beg project. if you talk to not far from here in tulsa, pipeliners, local 798, will tell you they're unemployment numbers for their members is pretty high. a project like the southern like and gulf coast and keystone xl, its very important to those folks. >> when building a pipeline you have to work with the unions and the union wages? >> yes. we've got a project labor agreement, p .l.a. with them. this is a very important job for unions and their members.
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>> there's also environmental concerns with moving oilsand from canada through pipeline through the united states. how are you addressing those concerns? >> one of the first things to say in that regard the 57 additional conditions that transcanada agreed to with the federal government regarding design, construction and operation of the pipeline. not just for the southern leg, not just for keystone xl but for the keystone pipeline system. those conditions go above and beyond what's in the books now. no pipeline in the united states has to meet those conditions. we've already been doing it for the last two or three years for the first two segments keystone has been in operation and performing well. those standards, the bar was pretty high to begin with. we raised the bar in terms of design and construction and
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engineering of keystone xl. >> talk about the oilsand from canada. is it different than any other oil crude oil that's coming from the ground or how does it differ? what are the concerns there? >> there have been a number of studies taking a look at that. those independent credible reviews have concluded that there isn't any difference. the composition of it is the same of the oil we import from venezuela. it's actually liker than some of the oil that comes out of california. the speculation and that's pretty much what it is about the composition of oilsands is just that, speculation. you also have to keep in mind we get more old from canada than any other country in the world. it's been that way for a long time. most of that oil is coming out of the oilsands. this is not something new.
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this is not some new mix of oil that's coming in through keystone. there are a lot of other pipelines that are bringing oil in from canada. host: that was transcanada executive that we talked to in september when we visited the area about their keystone xl pipeline. we'll be talking to alex pourbaix coming up here in a minute. he's president of energy and oil pipeline. as our coverage continues, cushing, oklahoma we are live there with our cameras this morning. it is one of the so called tank farm terminals in cushing, oklahoma. they have about 90 storage tanks at embridge. there are 12 other companies that operate storage tanks there. you have the pipelines from all over the country that come into cushing, oklahoma, directly from canada and their production they
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are crossing the border. of course the keystone xl pipeline will be coming from canada through the united states down to cushing, transcanada also built their self-leg just south of cushing to the gulf coast. that is expected to be up and running here this year. they separated those two projects after the state department rejected the initial proposal from transcanada. now the company and proponents are waiting a review from the state department. we heard from daniel yergin earlier, that can come in 2014 now. as state does final review of keystone xl pipeline and what this will involve including environmental concerns. you heard the transcanada executive there talking about the economic impact as well. let me give you the phone lines
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here as we wait to get up and going. democrats 202-585-3880, republicans 202-585-3881, independents all others 202-585-3882. you can send us tweet @c-span wj inyou can go to facebook.com/c-span. alex pourbaix is the energy and oil pipeline president for transcanada. thank you for joining us. you're waiting for the state department to do their final recover on keystone xl. from earning reports released yesterday, it showed that the company has spent $2 billion so far on the xl pipeline. what have you spent that money on so far? guest: greta, it's just the usual things you spend money on those types of projects. in order to be in service at the
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time where we were anticipating, there's a lot of long lead time items. there's pumps, there's actual pipe all of the various control systems we had to buy, put those orders in early. that's probably the lion share of that amount of money. there's obviously hundreds of environmental studies that need to be done. land surveys, it all adds up. i would add that the vast majority of that equipment came from american suppliers. guest: what about jobs for building? you built the south leg, that should be up and running soon i understand. what type of jobs are there for building pipelines in this country and how much do they pay and what about the over all job numbers of keystone xl? guest: this has been an area that the opposition has made very misleading statements and
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just plain old lies. you talk about the gulf coast portion of the keystone xl pipeline where we're finishing building now. that pipeline is much smaller than the xl pipeline. we employ directly 5000 americans in constructing the pipeline. we will employ another 9000 americans and we are right now employing 7000 americans in manufacturing the pipe, the pump, the control systems that are required for these projects. the reason i can be so specific is we can actually identify each and every one of those workers on our pipeline and manufacturing. those are hard solid numbers. keystone xl along is about $5.5 billion project. crossing a number of states, these kind of projects really do produce a great number of jobs. you asked how they're paid.
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they are very high paying jobs. most of these jobs are union jobs. you can see the job impact when you see union partners how hard they're pushing in d.c. host: how are you addressing the environmental concern? we heard from callers today talking about how tar sand is different than other soil and the chemical mixture you need causes environmental risks to the land and the water around these pipelines. guest: once again, this is nothing but a misrepresentation. the department of state looked at this issue of is oilsands oil different from other oil exhaustively in the four environmental impact statements that very prepared on this project to date. i actually think the last word on this, our federal u.s.
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pipeline regulator, femsa actually engaged the u.s. academy of science. probably the most respected independent scientific body in the united states if not the world to look into this issue. they're confirm conclusion, they saw absolutely no material difference between oilsands, oil or any other other oils that are presently being transported by pipeline throughout the world. they saw no increased wents pipe -- incidents. this issue is not but a red herring. host: do pipelines emit co2? guest: no, our pipeline is powered by electricity. so the pipeline itself does not produce any co2. host: when the president talks about the keystone xl pipeline needs to be carbon neutral, that
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it cannot increase our co2 emissions, what is transcanada's response to that? guest: great a, -- greta, here is the best way to think about this, our opponents would have you believe that building pipelines increases greenhouse gases from oil. let's think about this practically. what produces greenhouse gases from oil is refining and the consumption of refined products. it's a consumption issue. if we don't build keystone xl pipeline, the world is not going to consume less oil. they're going to consume the same oil. it's going to be coming from increasing u.s. production of oil but this is not a transportation issue. this is a consumption issue. the state department once again, in their most recent environmental impact statement looked specifically at this issue and came to the conclusion
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that building or not building the pipeline would have little to no impact on greenhouse emissions. from our perspective, we were quite happy to hear the president's test that he was going to look to see if the pipeline exacerbated global ghg. host: callers waiting to talk to you. would be interesting to see how much the money our government has now spent examining keystone xl. carl, goh ahead -- go ahead in los angeles democratic caller. caller: let me say first of all, i've been watching this c-span sense 1980. producing or just -- it is devastating the land.

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