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Comment by shawnz | Hacker News Reader

> And there's always, like, this premise of, well, it's gonna get shipped anyway. No, it's not. Like, that's the whole point. No, it's not. Your industry is on its way out. And that's the point. And we all know that. You can't sit there and say, "Oh, well, it's gonna go by rail or it's gonna go by ship anyway. No, it's not. The tar sands are on their way out. And that's the reality.

I think this is purposely confusing two different arguments.

Nobody can deny that oil use is becoming less and less attractive and that is a good thing for everyone.

But if it is "on the way out", what's the need for blocking the pipeline? The need is that actually there are still significant usages of oil remaining even though it's "on the way out".

So those significant remaining usages actually DO add validity to the argument that blocking the pipeline will cause additional demand for oil trains/tankers. Otherwise there wouldn't be a need to take any action at all.

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The demand for shipping the oil via train or truck will also diminish over time as these horrible and expensive oil reserves are eventually made too expensive to extract. If you build a pipeline and put in the investment then you have standing infrastructure and sunk cost that will compel people to keep pulling out the tar sands oil, even at a loss. If they are forced to use tankers then the (higher) cost per barrel for transport is paid immediately and by the supplier instead of foisted off on some bond holders somewhere.

Pushing the transportation demand to trains/tankers is a GOOD thing, it makes everything visible and obvious and it prevents the oil company from hiding the factors that make this reserve the pile of flaming dogshit we all know it to be.

Perhaps the government should actually subsidize the pipeline to eliminate those extra sunk costs compared to tankers/trains. It would basically be like paying for carbon capture (except you're actually paying for it to just be transported more safely in the first place).

Why subsidize? Let the producer pay the freight. We want to eliminate this oil source anyway, so if there is anything we should be doing right now it is to more heavily tax oil sources like these which have such significant negative externalities.

> But if it is "on the way out", what's the need for blocking the pipeline?

It's economics. Shipping by pipeline is cheaper per gallon than shipping by rail/truck/ships. Even accounting for the huge capital costs to build the pipeline in the first place, once a pipeline is secured the marginal costs of shipping additional gallons is so much lower there would be more prices at which it would be profitable to extract tar sands oil versus if the tar sands extractors have to also account for the increased marginal costs of rail/truck/ships.

Tar sands extraction has already seen mass stoppages when the Saudis flooded the supply chain with oil and dropped the oil costs below what was profitable. (Tar sands extraction is worse for the environment than classic oil drilling and thankfully at least some [though never enough] of those externalities are at play in its costs versus oil drilling.)

Right now the price is up again and tar sands work probably is going back into place and it probably will still be shipped by rail/truck/ship. So the short term problem is the same.

But stopping a pipeline today keeps the pipeline from being a fully depreciated asset for oil sands five/ten/fifteen years from now when the supply/demand curve potentially invert and oil is super cheap again (because demand is way down). The higher marginal costs on shipping especially matter then, because potentially it stops tar sands extraction from again being profitable in far more frightening high supply/low demand periods. In that case it should mean less supply gets put onto the market, especially from high cost extraction techniques such as tar sands.

The claim about carbon cost of shipping has no numbers attached to it and is most likely completely deceptive. It doesn't account for the energy return on energy invested of tar sands being 3x-10x less than conventional oil, an EROEI of 5 versus 18-50:

https://en.m.wikipedia.org/wiki/Energy_return_on_investment

We do not need this oil in particular, there's more than enough other oil, so there's no foregone conclusion that we are going to extract these tar sands.

Further, the need for stopping this particular pipeline is that we are not transitioning quickly enough, and it's a bad capital allocation that hurts our ability to make the investments we do need.

The pipeline isn't being installed to lower the carbon load of bringing the oil to market, it's only there to reduce costs, which means that there will be greater amounts of that oil brought to market, versus cheaper oil from other sources that don't require as much energy intensity. The pipeline only exists for these particular oil investors to profit, instead of other ones in other parts of the world.

of course we need it, that's why the market was creating the pipeline. pretending that a group of experts can determine what the market needs or is essential, is de facto tyranny. what I can say for sure is that we need cheaper more reliable energy, and it is clear that this pipeline would do that for our country. instead the money and jobs go elsewhere.

what is amazing about this decision is that there was no rush to the courts for an injunction, no reliant interests. the company doesn't even put up a fight. I wonder why that is?

Does 1) the market need the oil, or do 2) these particular oil producers need the pipeline in order to bring their product to market and compete with others, or do 3) these particular oil producers just want the pipeline to lower costs and increase profits?

The existence of a pipeline only proves 2 or 3, it doesn't necessitate 1.

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