You slipped the word “federal” in there and I actually don’t know if given no federal interference, the individual states would approve the pipeline. However, this would still be governmental interference because there are many parties along the proposed route who do not want to lease the pipeline the land for whatever reason, and you need to use eminent domain to force them to do so.
In my opinion, eminent domain should only be used, as a bare minimum criterion, for something that will provide a positive benefit to the entity implementing it. It would, as I see it, provide a slight negative benefit: on the balance of things, the damage from a possible catastrophic spill would slightly outweigh the hundred or so permanent and thousands of temporary jobs.
However, if everyone on the pipeline’s route would agree to the lease, which they don’t, then I am not sure what my opinion is: I guess I would be for it, since there are lots of pipelines already and the landowners are already prepared to weather then environmental costs. I might however be in favor of forcing the oil company to pay in to a cleanup fund if they don’t already.
ETA: let me emphasize that the pipeline is fairly far removed from the “free market.”
A government, federal or non-, approving the pipeline is an interference with trade: the “free market” solution would be “let each individual owner of land decide whether the pipeline should cross”.
Approval by State, where it is in review, is a decision to not interfere. Or at least not interfere further; the review process itself is an interference. Maybe it’s a good one, maybe not. Perhaps you’d like to comment on petroleum export policies.
Well, it’s complicated: we may need to import more light sweet crude for gasoline but we may have a surfeit of heavier industrial grade crude we can export. As a country per se I don’t have a strong opinion on it: we may want to limit drilling for oil for conservation reasons, but that’s true no matter what country would ultimately use it.
I’m not sure where you’re going with this. Are you saying that if the pipeline were approved, that it would not require the use of eminent domain, and thus an interference with the free market? And how does that reconcile with the principle in the OP with regards to petroleum export?
[quote=“Ruken, post:1, topic:730242”]
[li]Markets Should be FREE. Don’t tell me what to do.[/li][/QUOTE]
So the government overriding property rights to run a pipeline as part of a deal with a foreign government, to profit international companies, is “free market.” Sure.
Pro
[ol]
[li]Economic Boom. Gas prices won’t rise, and we’ll benefit from the economic activity from increased production.[/ol][/li][/QUOTE]
Without knowing enough about the subject to say whether it is accurate or not, the main argument I would see against allowing the export of crude oil is that that we wouldn’t benefit from the economic activity of increased production. Given that petroleum extraction is an industry that revolves around the exploitation of a finite national resource, it should be obvious why people would think they owe it to us to have the processing done by Americans prior to export - 100,000 directly employed in petroleum refining and another 400,000 indirectly employed - rather than firing them all and outsourcing their jobs to another country.
Of course, eminent domain can remove trade barriers and create a freer market. But that’s not the purpose of the review, and congress wasn’t voting to seize anything.
The point is, wanting the U.S. to not stop people from exporting oil is consistent with wanting the U.S. to not stop people from building pipes. Those are equivalent actions by the same government.
But maybe the U.S. should stop people from exporting oil. And if anyone else thinks so who hasn’t spoken up already, I’d like to hear more about why.
Thanks for the input. Right now, U.S. refiners are maxed out, and production is rising. That rising production could prompt building of new refinery capacity, and more jobs. But if we allowed exports, that could put a stop to any planned increase in capacity, and maybe even cause utilization to drop. Which could cause job losses. If I’m understanding you right.
EIA has some stats on O&G jobs. I’ll see if any of those look relevant.
I didn’t see anything over breakfast. The report I link to in the OP does expect refiner margins to decrease, so I think that’s in line with your scenario.
I thought of something else I don’t think we’ve discussed: What would this do (or not) to oil-producing countries on our naughty list? E.g. Iran, Venezuela, etc.
The current system gives us a surplus of oil, since we are the leading consumers of oil we drive a good deal of the demand side of global pricing. Our extra oil from domestic sources gives us extra supply which should help lower global oil prices, so that would be overall good, even with the environmental aspects as making oil available to the masses 1: improves their quality of life and opportunities in life and 2: makes pollution control more tolerable to the masses as that usually comes at a cost, so the more their quality of life is improved the more willing and concerned people will become.
However perhaps a oil trade system can be used for the sake of efficiency, to allow foreign selling of the oil by needing to buy a equal amount of foreign oil. In this case one is just using efficiency of delivery where that comes into play, instead of shipping their oil to the refineries directly they ship it to someplace more convenient and less costly and buy oil that is cheaper to ship to the refineries, so the same amount of oil is for US domestic supply, even though the actual oil is not exactly the same.
The whole point of the Keystone pipelines is to get the crude oil/dilbit to storage facilities in OK and refineries in SE Texas (Houston and Port Arthur). And, I suppose, if need be, to export it via Port Arthur and Houston, as their ports are very close to their refineries.
Unless you can refine it and/or ship it somewhere, crude oil isn’t too useful, and the pipelines help add value by easing the process of getting it from rural Alberta to where it can be refined, stored or exported.
As to the OP’s question- why would we want to restrict the export of crude oil? All that would do is distort the market, although I suspect that prices wouldn’t be much affected overall, as there would probably be a temporary local glut, until US producers reduced production to raise prices. But… their price wouldn’t go any higher than the world price, as refiners would simply buy internationally if the price of the domestic stuff exceeded the international price.
So it would effectively screw the US producers with little upside, and reinforce OPEC and other oil producing nations’ positions, neither of which sound like good ideas to me.
Better, IMO, to let it be sold without restriction on the open market- that way US producers get the best price they can, and OPEC has more serious competition and suffers accordingly.
(personally, I’d like some sort of subsidy for US producers with the intent of screwing OPEC over, but that won’t happen)
Can somebody explain why we have the restriction in the first place? We are a net oil importer, so presumably all our domestic production will be sold in the US anyway. So what does the regulation do?
For your second question, see my appendix in the OP. For your first, I’m assuming it arose from the oil embargo. But I’d love for anyone more familiar with the history to chime in.