Obama’s energy policy…if you can call it that, is a curious mixture of limiting supply, and increasing demand-there is no sense in it. It has (of course) resulted in higher prices for consumers, and shortages in supply (no surprise to anyone who has taken Economics 101).
Take the statements of Energy Secretary Chu: “we need to get gasoline up to $10.00/gallon”
I’ll grant you, the USA needs to reduce its scandalous waste of fossil fuels, but Obama has done nothing but increase the price (and add immeasurable increases to the profits of crude oil producers).
In short, NO energy, no sense, no preparation.
The only real option (if you want to reduce CO2 production) is nuclear power-but I’ve seen no evidence that he has any program for promoting this.
Even if Yucca had been put into effect, it would barely hold the waste we’ve already accumulated. And it would do it at much greater cost than the current system of on-site storage, for somewhat little gain. All Obama did is recognize that reality.
The nuclear power people generally supported the move. To paint it as proving that Obama is anti-nuclear does not accord with reality.
What on earth are you talking about? Are there any ACTUAL policies you’d like to point to? Or is just one out-of-context quote from 2008 doing the job by itself?
How about the vetoing of the oil pipeline from Canada?
That is called “reducing supply”-look it up in your economics 101 text.
Reducing supply while demand stays the same results in “increasing the price”-I’m sure you will understand it.
So delaying a pipeline that will reduce FUTURE bottlenecks for sending Canadian oil overseas is somehow affecting prices now? Also, the theory that rejecting the pipleine is some sort of concerted effort to reduce supply kind of breaks down when you consider that the pipeline is almost certain to be approved with the proposed minor re-route. Perhaps Obama only wants to keep gas prices high until the election, so as to prevent SUV-driving conservative voters from driving to the polls?
This recent article makes the case that political efforts to limit carbon, and therefore coal, flopped miserably with the failure of Cap and Trade in 2010 and that there hasn’t been much in the way of Beltway interference with it since (until the EPA emissions standards, which isn’t exactly Obama’s doing).
But new coal plants are being blocked all over the country and there is pressure to shut down a lot of the older ones. Why? Grassroots efforts, and support from people like New York mayor Bloomberg of all people:
Good, bad, right or wrong, the pressure on coal doesn’t seem to originate from Obama.
Uh, the US is producing more domestic oil right now than it has in years, possibly decades.
Most in a little more than one decade (~1998) and growing. Of course this tells us essentially nothing about what prices should be since we need to consider the global production / consumption balance nor does it tell us anything about Obama’s Energy Policy. It also means essentially nothing related to whether or not we should import Canadian crude. Even if we were a net exporter, it still might make sense to import Canadian crude.
I honestly don’t understand how people think that impact on U.S. crude prices even should be a consideration with the permitting of this Keystone XL pipeline. Let’s say all we do is import the Canadian crude, refine it, and export the gasoline, diesel, and other products. Wouldn’t it still be a benefit to the U.S.? We get something built with private money, it creates jobs, and it generates tax revenue. Isn’t that worth it regardless of any impact to crude prices? Also, is there a single person who believes it is more beneficial to the environment for Canada to build a pipeline to the west coast, barge the crude to China, and have China refine it?
The fact of the matter is that Keystone is going to get their Presidential Permit eventually, and any way you cut it having more infrastructure is going to be a net gain economically. If you are worried about green house gases tar sands production is very carbon intensive so you could make the environmental argument against the pipeline from that angle.
I had a chance to sit down for a couple hours with a senior analyst at the American branch of a very large French utility. (Their American offices deal with power marketing and energy trading, on the French side they run a large fleet of nuclear reactors) He said that their models indicated that the world market price for crude oil needed to be at least $95 otherwise tar sands were a losing bet even after Keystone is built.
You could make an environmental argument against producing the bitumen. I don’t see how there is an argument against the pipeline though. The Keystone XL pipeline is not necessary to produce the bitumen. They can also build a They can build a pipeline to the coast and barge it out. They can also use other more environmentally unfriendly ways of transporting such as rail or truck. Furthermore, the Keystone XL pipeline will also transport Bakken crude from North Dakota. Much of this now is moving by rail or truck. Any way you look at it, this is not an environmentally smart decision. Also, I agree that it will get the permit eventually, unless the Chinese go ahead and offer to underwrite the line going to the coast or if the Canadians get sick of the stupid political games the U.S. is playing.
I’m guessing you may have spoken with someone at EDF. They are smart traders, which I have dealt with on the power side. Part of what you may not get though is that building the line changes the differentials. The economics are different when WTI trades at a $15 deduct to the global price and Canadian crude trades at a $15 deduct to WTI than if the midstream issues were figured out and everything traded at more like quality differentials. Also, we probably are going to be living in a world with >$95 global crude prices for the foreseeable future.
Keystone XL has nothing to do with American supply. We’ve already got more than we need. XL is simply a free American gimme to Canadian oil companies so they can ship their crap across the US and sell it globally out of the Gulf. There is no benefit. Canadian oil isn’t giving the US any oil, nor is it lowering its price of anything it already sells to the US. There is no supply reduction.
Really everything you say here is incorrect. Let’s take them one at a time.
American produced crude oil will be transported on the line (and a lot of it). The Williston Basin has experienced significant production increases in the past couple of years and now produces more than 600,000 barrels per day.
[QUOTE=U.S. Department of Energy]
Due to pipeline capacity constraints, Williston Basin producers rely on rail and trucks to move additional crude oil out of the region.
[/QUOTE]
Other portions of the Keystone XL pipeline and Keystone lines add additional take-away capacity at Cushing, Oklahoma, which is the largest hub for domestic production in the U.S. and is currently experiencing a glut due to increased domestic production.
Furthermore, it is just insane to state that additional supply being brought to the U.S. from our largest importing source, Canada, has nothing to do with American supply. Like it or not, Canada is our largest importer.
[QUOTE=U.S. Department of Energy]
Top Sources of Net Crude Oil and Petroleum Product Imports:
Canada (29%)
Saudi Arabia (14%)
Venezuela (11%)
Nigeria (10%)
Mexico (8%)
[/QUOTE]
This line allows increasing imports as imports from countries like Venezuela, Saudi Arabia, Nigeria, and Mexico continue to decrease.
No idea what you even mean by this. If we have more than we need, why are we importing more than 11 million barrels of oil per day into the U.S. Canada is our largest source, they are located next door to us, they are friendly to us and our general value system, and they have increasing production while many other countries are decreasing such as Venezuela and Mexico.
What is the free gimme? I have no idea what you mean by this. This is a private company that will use their money to build the line and their money to pay for landowner easments and their money to operate the line. They won’t be shipping anything out of the Gulf to the global market. Crude oil is essentially not exported from the U.S. The Department of Commerce has in place export controls on crude oil. Exporting crude oil also requires a waiver from the President. Also, it would be subject to the Jones Act, and there are practically no vessels in existence that are available to export crude oil from the U.S. Ironically, the very minimal amount of exporting the U.S. does of crude oil is to Canada.
Refined products such as gasoline and diesel due get exported from the U.S. Any exports would be of products owned by companies with refineries in the U.S. gulf coast, of which TransCanada is not one. So, if TransCanada sells crude oil to an American owned refinery and they then sell some gasoline to Mexico, I fail to see how that is remotely close to the scenario you state. Furthermore, here’s what the U.S. has to say about sales of refined products.
[QUOTE=U.S. Department of Energy]
Because the United States is the world’s largest oil importer, it may seem surprising that it also exported about 3 million barrels a day of oil in 2011, almost all of it in the form of refined petroleum products. Due to various logistical, regulatory, and quality considerations, it turns out that exporting some barrels and replacing them with additional imports is the most economic way to meet the market’s needs. For example, refiners in the U.S. Gulf Coast region frequently find that it makes economic sense to export some of their gasoline to Mexico rather than shipping the product to the U.S. East Coast because lower-cost gasoline imports are available from Europe.
[/QUOTE]
You mean no benefit besides securing additional imports from our friendly neighbor, having pipeline infrastructure that can transport U.S. produced crude oil, relieving bottlenecks resulting in regional pricing differentials, employing American workers, transporting crude by more environmentally safe pipelines versus trucks and rails in the U.S. or by pipeline versus tanker/barge out of Canada, providing additional stockpiles to U.S. refineries, potentially improving the U.S. trade balance by allowing these refineries to increase their output that may result in ability to export more U.S. refined products, and the raising of numerous state, local, and federal taxes. No benefit besides those minor things right? Not to mention the fact that we would damage relations with Canadian government if we don’t approve it.
Who on Earth has ever made the argument that Canada would just give the U.S. oil? This is the strangest point you are making by far. No kidding they aren’t going to just give the U.S. oil. A private Canadian company is going to produce the oil, they will sell to another private Canadian company that will transport the oil, they will sell to a private U.S. company that will refine the oil into usable products, they will sell the refined products to private U.S. companies that can transport the refined products for sale to the numerous end users. No one is making the argument that it should work anything differently than business as usual. No one is saying that anyone should be given something for free. This does not cost the U.S. government anything; they will make money from the taxes it generates.
The price of this crude oil will be based upon the global price of crude oil subject to differentials based upon quality, transportation costs, and minor regional supply/demand issues. The change in the global price of crude will be essentially non-existent as a result of the approval or not of this pipeline as the same volume will be produced and sold into the market regardless. The question is does it get sold to U.S. companies after being transported on this pipeline or does it get sold to Asian markets after being transported on a different pipeline going to the West Coast of Canada and then travelling across the ocean on a tanker.
Not receiving additional crude oil from Canada is not a supply reduction of crude oil from Canada, correct. But most of us don’t have blinders on. We realize that crude oil production is declining from other countries that export crude to us such as Venezuela and Mexico. We realize that it needs to be made us somewhere else. We also realize that we import crude oil from the Persian Gulf which is a politically instable area of the world and prone to supply disruptions. We understand that Canada is not politically instable and that their crude oil production is increasing. We also realize that this directly affects the ability of crude oil to be supplied from areas in the U.S. such as the Williston Basin. We understand that if they have to send that crude by truck or rail that the cost is more expensive than by pipeline and it affects the economics of drilling thereby reducing the production. We also realize that the amount that can be railed or trucked is limited which can result in curtailments of production. Simply put, it does profoundly affect supply.
Bring it! 
Yes, there is oversupply and over capacity in the Midwest. We know that. This results in a relative glut in the Midwest allowing already economically strapped workers, farmers, industries etc. in the Midwest to enjoy slightly lower prices.
The oil industry doesn’t want this! Keystone is a way to bypass the Midwest, eliminate the oversupply, and jack up prices thanks to their new artificially created Midwestern fuel shortage. They will ship their oil to the Gulf, where it will be refined into diesel and sold to Latin America and Europe at higher and more profitable prices than gasoline produced for American domestic consumption. This reduces American supply and therefore does nothing to help American energy security. It will probably result in worsened economic conditions in the Midwest and increased unemployment.
Glut means lower prices at the pump. Doing away with the glut results in record profits for oil companies who export fuel from the US via the free trade zones in Texas thereby avoiding taxes and duties. Like the oil industry really needs to pay even less tax. Do they pay any at all these days?
I’ve explained how this additional “supply” is nothing of the sort. It’s increased exports for oil companies while the US continues to import foreign fuel at nice high Persian Gulf prices.
This crude oil gets refined and exported as other products like diesel, and it gets exported tax-free. The American tax payers and environment shoulder the expense and risk. I consider this yet another gimme and example of out-of-control corporate welfare & handouts.
All you’re saying is it’s intended for export tax-free, and not intended to in any way increase American supply or lower gas prices at the pump. No way.
The increased imports are for big oil profits, not Americans who need to put gas in their car. Oil pipelines running from Canada to the US already run way under capacity. Some sit idle. This is a way for more Canadian oil companies to ship more of their environmentally damaging and green house gas emitting tar sands oil to Latin America and Europe. It will also help American oil companies increase their exports. You might as well imagine the pipeline being elevated and simply passing over the US, for all the supply and security it’s supposed to bring to actual Americans. It’s not going to pass harmlessly overhead though. It’s going through and they’ve already had at least 12 spills in one year alone, with one of them resulting in a“six-story geyser” dumping 21,000 gallons of oil in North Dakota.
Cheap Canadian “gas”, increased supply and energy security, and jobs are Transcanada’s biggest selling points and they are all disingenuous lies or distortions. Unfortunately, there are way too many naive Americans who will believe anything an oil company tells them.
Correct, so please let’s dispense with the “lower gas prices” and “good for America” arguments.
You’re leaving out that American demand and consumption is down thanks in part to government-led efficiency requirements and a shitty economy. The US oil industry is now export-oriented, and has no interest or incentive to increase production for US consumption. They have been asked to increase production and they’ve been offered lots of incentives and they have said “no.” They’ll increase production when they can sell it overseas at a nice profit, not sell it here, cheaper.
We’re still going to be just as dependent on oil from the Persian Gulf at global prices. Keystone will have no effect on that. Keystone will simply create an easy way to eliminate low oil prices and jobs in the midwest thereby reducing supply and security, and instead sell it at higher prices on the international market while the United States takes the environmental hits.
If by lower prices you mean lower gasoline prices then you are wrong. The glut has led to lower crude oil prices for crude oil produced in the Bakken. It does not and has not led to lower gasoline prices. Gasoline prices have a higher correlation to Brent prices than WTI. While Bakken crude has experienced a deduct to WTI and WTI has experienced a deduct to Brent, gasoline continues to march in lock step with Brent (or any other global price of crude that is not land-locked). The difference means that the refineries in areas that pay a more WTI based price for crude have experienced increasing margins.
TransCanada sure has a funny way of trying to bypass the midwest. You do realize that the first phase of the Keystone XL pipeline delivers crude oil to refineries in Illinois, right? Sort of shoots a giant hole in your conspiracy.
Again, the glut does not translate into lower gasoline prices. It translates into higher refinery margins. The rest of this post is garbage not worth responding to.
You haven’t done anything of the sort. Additional crude oil coming in to the U.S. is additional supply. Now will we still import in the East Coast, yes. The geography makes it so that we can export in one area and import in another area. That makes perfect sense.
The U.S. imports crude oil at the prevailing market price. We don’t get a discount or pay a premium. Further, you act as if oil companies are one thing and the U.S. is another. You do realize that it is oil companies importing and paying this market price right?
What are you talking about? These companies pay all normal operational taxes: corporate income, payroll, ad valorem, etc. You’re complaining that the U.S. doesn’t charge an export tax on petroleum products? What products do we charge an export tax on? Is the answer none? The American tax payers shoulder zero expense. This generates revenue for the U.S. It is inarguable and obvious.
No, I never would even think of things in terms of export tax free? Neither would nearly any other person in the country. The reason of course is that we don’t charge an export tax on anything. I think it may even be unconstitutional to charge an export tax.
Of course this is being run as a for-profit venture. Is anyone arguing otherwise?
Seriously? Is this seriously your position? Look, Canada is a pretty big place. The U.S. is a pretty big place. I can guarantee you that there are lots of pipelines running under capacity all over North America. They get built where the supply is. When production ramps up in one location, additional infrastructure might be needed. When production declines, that infrastructure may be operating under capacity. This is not some grand scheme, that’s basic logic. Why do we need to expand a highway in Austin, Texas; there’s a six lane highway in New Orleans with barely any cars on it?
Well, it does increase supply, energy security, and increase revenue for the U.S. at no cost.
It is good for America. It also should be a routine approval that should never have even received attention.
I’m not leaving it out. It is irrelavent to this issue. As a matter of fact, the U.S. imports 11 million barrels of oil per day. As a matter of fact, the U.S. has excess refining capacity. As a matter of fact, the U.S. will gain by importing from more stable, friendly countries and by profiting from refining the crude oil.
This is laughable. Oil companies do not think this way. They think about profitability of producing and how much they can produce. They are concerned with cash flow. They are not concerned with anything other than doing their job. To say the have no interest or incentive to increase production for U.S. consumption is just absolutely ridiculous. They have the only incentive they will ever need: it is profitable. Oil companies want to sell as much as they can at as high a price as they can.
You are going off the deep end here. Again, they produce what they can at a profit. I don’t even understand what your thought process is. Maybe you think there are only a couple of oil companies in the U.S. that conspire together in a room or something. Let me clue you in: there are thousands of oil companies in the U.S. They produce what they can and hope prices rise. That’s all they think about. There’s no evil cabal of people trying to screw the American public while twirling their mustache and laughing maniacally. They are all hoping the economy improves so that more people want to buy their product and they want to produce as much of it as they can.
Well, basic facts tell us you are wrong. We are becoming less dependent on oil from the Persian Gulf. We know this by the simple fact that imports from the Persian Gulf are declining. We are replacing it with Canadian imports (among others). We know this because Canadian imports are increasing. We are also increasing exports. We are doing this because of the geography of where our infrastructure is located and where the products are produced.
This is a tragedy of the commons. We can’t do this alone and we would be silly to try.
A lot on the left like natural gas and nuclear. They are economically viable RIGHT NOW and they are relatively clean.