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Crude costs and Energy East

My latest at Macleans digs into TransCanada’s analysis on crude cost savings for eastern refiners from Energy East. Check it out here.

4 responses to “Crude costs and Energy East”

  1. mcdermottinNYC

    Although Deloitte didn’t do it, surprised Andrew’s “climate” blog doesn’t consider the relative costs of internalizing the carbon in the refining scenarios.

    To keep Ronald Coase from turning in his grave, i’ll point out that if the carbon was internalized, the feedstock savings would be reduced by roughly $1/BBL for every $10/T of carbon charge (assuming 0.1 T/BBL WTW emissions premium of Albertan oil over Brent)

  2. mcdermottinNYC

    Andrew — if they go to the bother to build a pipeline across the country, and then goto the bother of building refineries to run on heavy oil from that pipeline, and there’s room for movement on the bid since its priced at a discount to the alternative Brent, and the entire deal is structured simultaneously, with senior politicians involved, and at a time when climate and pipelines are on the radar everywhere but this blog, then sure, i’ll assume carbon has been thought about, its in the regulatory change provisions of the contracts, and there’s some allocation beyond the producers.

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