It’s always helpful to look at a country’s actions over the past 200 years to help understand what its intentions may be here and now, and in the future.
The burgeoning but relatively isolated country of Iran hasn’t militarily attacked another country for over 200 years, and it was Saddam Hussein’s Iraq that militarily attacked Iran in September 1980 — a conflict that finally ended in August 1988 with 1 million casualties and an economic cost of $680 million to $1 trillion dollars — with no clear winner and no benefit to either country.
After all that blood and treasure, no benefit to either country(!) although via the UN-sponsored peace accord and as a penalty to Iraq for starting the war, Iran gained access to the Shatt al-Arab waterway which runs into the Persian Gulf.
Since 2000, Iran has purportedly financed organizations (some listed as terrorist organizations, and others not) throughout the Middle East and most recently in Syria, Iraq, and perhaps Lebanon, in an attempt to exert some control on the various forces operating around their region. (Every country uses various methods to control what happens in its own region, so no news there)
But nothing captures the world’s attention like the Iran nuclear deal.
U.S. President Donald Trump says the deal is a bad one for the West and shouldn’t have been signed and wants to walk away from the deal, reserving the right to act unilaterally if he feels the country is a danger to the U.S.A. or its Middle East allies.
Last week, France’s President Emmanuel Macron flew to Washington to meet with the U.S. President to convince him to stay in the deal or to embrace a ‘third way’ which means renegotiating some of the agreement to better suit U.S. concerns.
Iran barely signed the previous agreement… so it will be interesting to see how the U.S. can get everything it wants from a renegotiated deal while still obtaining Iran’s signature to a new agreement. A deal isn’t a deal unless both sides sign on the dotted line.
Why Would the U.S. Care About Iran? (and Syria, for that matter)
From a strategic perspective, there isn’t a country in the world that could be less important to the security of the United States than Iran, and the same goes for Syria.
Neither country has the kind of military that could threaten America, nor could they project their power anywhere near the North American continent.
Unless the United States is actively working for Israel — a country which has an irrational fear of Iran (again, Iran hasn’t invaded any other country for over 200 years) and is willing to spend billions or even another trillion dollars to wage another Iraq War-style conflict against Iran, there’s no reason for the U.S. to have any dealings with Iran whatsoever.
Iran is a regional power at best, and will remain so for approximately the next 30-years as it hasn’t the capacity to be anything else.
If the United States is actively working for Saudi Arabia — a country that views Iran as an unwelcome competitor in the race to dominate the region, the same advice applies. Why should the U.S. spend multi-billions and sacrifice thousands of young soldiers to satisfy the Saudi ambition to be the local hegemon?
It’s not like Iran is withholding oil deliveries. On the contrary, Iranian oil is easily obtainable with a phone call — the country is highly motivated to sell every drop of oil due to high spending on social programmes by the Iranian government that are funded by oil revenue.
And Iran’s crude oil is rated either #2 (sweet) or #3 (semi-sweet) which means it’s in high demand around the world. Global oil producers have already pumped all of their #2 sweet crude out of the ground years ago; only Iran and Venezuela have significant reserves of sweet crude in the 21st-century.
As for oil refineries, they need Iran’s (or Venezuela’s) #2 sweet crude oil to blend with the oil supplied by their producers which is almost always #4 (sour) or #4.75 (very sour) like the Canadian oil sands product.
Most refineries won’t accept sour crude oil unless there is plenty of #2 or #3 sweet crude blended into the sour crude. It’s just too toxic to refine ‘sour’ as it requires a much more stringent maintenance protocol, meaning the refinery needs to shut down and go into ‘maintenance mode’ more often. That downtime represents a significant loss of revenue for oil refineries.
Therefore, as long as Iran continues to ship huge quantities of sweet crude, the United States should be facilitating that oil business instead of trying to curtail it.
The EU View of Iran is a Mature View
Say what you want about the Europeans, but they don’t allow themselves to be used by countries like Israel that have an irrational fear of Iran and want to use the United States and the EU to keep the Iranians ‘down’ and in their ‘proper’ place, or countries like Saudi Arabia that want to use the United States and the EU to keep the Iranians ‘down’ so that the regional superpower will be Saudi Arabia by default.
To oversimplify the EU view; As long as Iran’s sweet crude continues to flow (it is) and as long as Iran isn’t actively invading any other country (it isn’t) then there’s there’s no reason to use some imagined breach of the Iranian nuclear deal to launch another trillion dollar war in the Middle East. And, as always, the EU continues to refuse to allow itself to be used by regional powers such as Israel and Saudi Arabia.
In the final analysis, the EU’s position on the Iranian nuclear deal is the most enlightened of all and it is the view the United States should support.
Disclaimer: I have my own renewable energy website and I contribute renewable energy blog posts to another website — so I’m obviously a proponent of renewable energy.
However, back in the day I was an entrepreneur who learned about dealing with various levels of government, about operating within regulatory frameworks, and needing to budget carefully for future large scale projects.
With the foregoing in mind, I offer the following comment about the Kinder Morgan pipeline project proposal (the TMX expansion) that is planned to run from Edmonton, Alberta through to the Westridge oil refinery (Chevron) in Burnaby, BC:
- Unfortunately, there are still places where renewable energy won’t work in a cost-effective manner. Eventually, renewable energy technology will develop and become feasible everywhere on the planet. But we still need oil & gas in the meantime.
- The past 5 Canadian Prime Ministers and probably a similar number of British Columbia and Alberta Premiers gave tacit approval to the Kinder Morgan pipeline expansion which led the company to believe the twinning of the pipeline would be approved.
For the federal government or any province to pull the rug out from under a company that has been led along for two decades to believe their project would be approved — and which provides a valuable service for people who drive cars and trucks in British Columbia and Alberta — would be unthinkable and two-faced.
The TMX Expansion should be approved based on those points alone as both Conservative and Liberal federal governments have promised the project would be a ‘Go’ and KM proceeded on that basis.
IMPORTANT TO NOTE IF KINDER MORGAN WAS OPERATING IN A TPP COUNTRY: The various levels of government in Canada could be sued for not following through on their tacit approval in recent years — and Kinder Morgan and possibly Chevron would likely win a court judgement worth billions of dollars which Canadian taxpayers would be forced to pay. Not only that, but a TPP court could still order the pipeline built!
However, there is another option which I will cover below.
About the Westridge Refinery in Burnaby, BC
At present, one tanker per week leaves the Westridge refinery (Chevron) in Burnaby BC, sometimes carrying 50,000 or 100,000 barrels of oil, gasoline, diesel, kerosene, or more exotic hydrocarbons like naptha, xylene, toulolene, and other volatile liquids. But once the 2nd pipeline is built, one tanker per day will leave the Westridge refinery.
All of these are explosive liquids and in an accident where fire occurs could easily destroy (yes, entirely destroy) the 2nd Narrows bridge or the Lions Gate bridge, which is why they run under those bridges at 4:00am to enhance their margin of safety. (Thankfully, there are no terrorists in our region)
Proposal to Enhance Shipping Safety in BC by Relocating the Westridge Refinery to Deltaport
I propose relocating the Westridge refinery in Burnaby BC to Deltaport BC, and that the federal government of Canada and the provinces of British Columbia and Alberta offer significant investment, allowing public safety to be dramatically improved.
NOTE 1: I’ve spoken to Ray Lord who is highly respected within the petrochemicals industry and remains the chief spokesman for Chevron’s Westridge refinery and he seemed interested in my idea to move the refinery to Deltaport.
Instead of a 2nd Pipeline – Move the Oil by Rail to Deltaport
It’s magic that Deltaport is the terminus for CN Rail and by using the rail option to move petroleum it means the proposed 2nd pipeline would never be needed.
Public safety would be dramatically improved, Chevron would have two crude oil transportation modes to keep it running, and in the event of a spill it’s well documented that rail spills are orders of magnitude smaller than pipeline spills.
NOTE 2: Pipeline spill incidents average 1.2 million BARRELS of oil, while rail tanker spill incidents average 220,000 US GALLONS. A huge difference!
This option would allow 3 shifts at the relocated refinery instead of 2 as is the case now, and even allow the refinery to continue operations in the event of a failure along the existing pipeline route.
NOTE 3: KM would lose the ability to build the new pipeline but allow it to neatly step out of a public relations nightmare — and it might choose to become an investor in the new Deltaport facility and not lose a cent of profit in the process.
All for less than the cost of a potential legal action brought by Kinder Morgan and possibly Chevron too.
A Fund to Remediate Pipeline Oil Spills
A 6 cents per barrel of oil tax should be applied to all liquids that move through pipelines in Canada which should be held in a trust fund to deal with future pipeline spills. The fund could be invested and the returns would increase the total value of the fund.
NOTE 4: Railways don’t need such a tax as they can’t continue rail operations along that line until the spill is cleaned up, so they’re already highly motivated to clean up rail spills ASAP.
If Canada, British Columbia and Alberta kicked in funding to relocate the refinery:
- No longer any need for the TMX Expansion
- Thousands of jobs would be created to build the new Deltaport refinery
- Public safety would increase by orders of magnitude in British Columbia
- Chevron, environmental protesters, and Kinder Morgan would be happier
And all that government investment would eventually be recovered through taxes.
Even Chevron liked my idea.