The President has decided to deny the permission to build the Keystone XL pipeline, thus satisfying the environmentalists that want to wean us off our dependency on carbon based products, such as fuel, food and fertilizer. The arguments for denying the decision are nearly exclusively political, while the arguments to build the pipeline are concerns for our national security and economy.
Here is the deal:
Canada has the tar-sands and is extracting the oil. This was not our decision. If we don’t buy the oil, China will.
We are importing crude oil from the Middle East (Iraq, Iran, Saudi Arabia, Kuwait, Qatar, etc.), Nigeria, Venezuela and other volatile places, leaving us exposed to supply and price disruptions.
We export refined products to the Caribbean islands, which by the way have a larger carbon footprint per person than the U.S. This is good business, since the islands are too small for a refinery.
It takes more energy to run a refinery up north in a cold climate than in hot, humid Baytown, Texas.
The last time a major oil refinery was built in the U.S was 1976. A small refinery was built in 1993, in Valdez, Alaska. The US. regulatory climate is hostile to refineries. Colombia, O.K, U.S. No.
Warren Buffett’s bought Burlington Northern Santa Fe railroad in February 2010 and paid 44 Billion dollars for it. The railroad paid Berkshire Hathaway 2.25 Billion in dividends during the first 13 months. Warren Buffet bought the railroad after Obama took office.
Right now the crude oil is transported from the Athabasca tar sands to Houston mostly by Warren Buffet’s Burlington Northern Santa Fe LLC railroad. It is among U.S. and Canadian railroads that stand to benefit from the Obama administration’s decision to reject TransCanada Corp. (TRP)’s Keystone XL oil pipeline permit.
With modest expansion, railroads can handle all new oil produced in western Canada through 2030, according to an analysis of the Keystone proposal by the U.S. State Department.
The cost of transporting the oil is about #14 dollars per barrel, much of it the cost of energy (CO2). The pipe-line can do the job for about seven dollars per barrel, much of it capital costs.
We can see what happens when transporting crude oil: http://lenbilen.com/2013/07/07/ttain-derailment-in-quebec-and-keystone-xl-pipeline-a-limerick/
Warren Buffet is a major player in the Obama Administration; he has frequent access to the White House and is a major contributor to Obama and the Democrats’ campaign.
Sarah Palin succinctly coined the phrase: “This is Crony Capitalism.”
By not importing oil from Canada the total carbon footprint will increase. We lose, and Canada loses. (I am not concerned that the CO2 is increasing, but that a valuable natural resource is excessively depleted.) Now it turns out that Canada has left the Kyoto Protocol, thereby being free to burn as much of its carbon as they want. Was that really what the environmentalists wanted?
So why did Obama deny the permit? Here are five possibilities:
1. Obama is a true believer that ”this was the moment when the rise of the oceans began to slow and our planet began to heal”. As a true environmentalist his role can not be overestimated .
2. Obama is deliberately wrecking our economy, refuses to have an energy policy that will create jobs, but will support protest movements and foment unrest.
3. Obama is acting on orders from Global Governance people that do want U.S. to be totally dependent on international law and U.N. mandates.
4. Obama wants to show leadership in advance of the Paris Climate Conference 2015, and its associated treaty.
5. Obama wants to show leadership on something, and touts the “breakthrough” agreement with China, where he will allow China to emit six times as much CO2 by the year 2030 as the U.S.
7. Obama promised to be Brazil’s best customer from their deep sea oil drilling success, paid for by U.S. loan guarantees. He must be true to his promises.
8. Obama is half insane and surrounded by bad advisers.
This is the best I can do to explain the reasons for this decision.