Wednesday, March 4, 2015

Beyond Keystone XL

President Obama’s veto last week of a Republican bill passed—precisely so that he would veto it—mandating the construction of the Keystone XL pipeline does, indeed, as former NY Mayor Michael Bloomberg pointed out, serve as “a perfect symbol of Washington’s dysfunction.” Obama made it clear that this veto, at least, was over the process, not the substance, and the Republicans had set the process up so that no self-respecting President could do other than veto.

In their last PR foray before the veto, tar sands proponents offered up an IHS-CERA study which asserted that, facts to the contrary, approving Keystone would increase the reliable supplies of oil for domestic consumers. The study asserted “the overwhelming majority” of oil flowing to refineries in the Gulf Coast would be refined and consumed in the U.S., even after XL is built—which is true, but irrelevant. If I pour a glass of water (Keystone XL) into an already full bucket (Midwest and Gulf Coal oil markets) most of the water stays in the bucket—but the bucket does not hold any more water—the increment just slops on the floor, or in this case gets exported.

The President focused on a more relevant point in his comments in Fargo last week, saying that “I’ve already said I’m happy to look at increasing pipeline production for U.S. oil. But Keystone is for Canadian oil. Sending it down to the Gulf it bypasses the U.S., it estimated to create 250, maybe, 300 permanent jobs. We should be focusing on American infrastructure for American jobs for American producers … ”

Keystone is an enormously important environmental symbol. But it is also a commercial struggle. Alberta tar sands oil and North Dakota light shale oil flows into the same markets, have access to the same refineries, and rely on the same pipelines and railroads to get them to the same customers. So it was never terribly plausible that Keystone would be good for the U.S.—it was designed to make Canadian oil more competitive in global markets, which, on balance, is not good for American producers or, since the Canadians want to escape from American markets, American consumers.

More:  http://ecowatch.com/2015/03/03/carl-pope-beyond-keystone/



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