While President Obama says he'll decide on the Keystone XL pipeline before he leaves office, Warren Buffett, America’s most-famous investor, said it's a good idea and is shaking his head that it still hasn’t been built:
"I would have passed Keystone," Buffett said in an interview with CNBC.
"I think that we have an enormous interest in working with Canada, as they have in working with us. That oil is going to get sold. If we make it more difficult for them, who knows how they'll feel about making things more difficult for us someday."
Buffett warned that U.S.-Canada relations could take a hit:
That (oil) is a valuable resource of North America, and Canada has been a terrific partner over the decades, and for us to kind of thumb our nose at them, you know, (that's) not what I would do.
In other Keystone news, Glenn Kessler, the Washington Post’s Fact Checker, gave President Obama four Pinocchios for misleading the public that oil that will go through the pipeline will “bypass” the United States:
A report released in February by IHS Energy, which consults for energy companies, concluded that “Canadian crude making its way to the USGC [Gulf Coast] will likely be refined there, and most of the refined products are likely to be consumed in the United States.” It added that “for Gulf refineries, heavy bitumen blends from the oil sands are an attractive substitute for declining offshore heavy crude supply from Latin America.” It concluded that 70 percent of the refined product would be consumed in the United States.
Kessler notes that the State Department looked into the export claim and concluded there was a low probability that large amounts of Canadian oil sands crude would be exported: [emphasis mine]:
Once WCSB [Western Canadian Sedimentary Basin] crude oil arrives at the Gulf Coast, Gulf Coast refiners have a significant competitive advantage in processing it compared to foreign refiners because the foreign refiners would have to incur additional transportation charges to have the crude oil delivered from the Gulf Coast to their location….Gulf Coast refineries have the potential to absorb volumes of WCSB crude that go well beyond those that would be delivered via the proposed Project.
A big reason why it’s so unlikely that Canadian oil sands crude will be exported is that the oil is similar to that from Venezuela and Mexico, and Gulf Coast refineries are designed to handle these types of heavy, “sour” crudes.
What’s more, as the U.S. shale oil boom in North Dakota and Texas has produced more quantities of lighter and “sweeter” crudes, Canadian oil sands crude complements shale oil in American refineries, as Reuters market analyst John Kemps explains:
U.S. refineries are processing record volumes of Canadian oil, even as U.S. production is rising, and they are hungry for more. Canadian oil is being processed together with U.S. shale oil to enable U.S. refineries to make best use of their equipment, which is why refiners support Keystone.
Without more imported Canadian oil, which could come via pipeline or on rail cars, refineries will have to turn to other suppliers of heavy crude. The prime candidates would be Venezuela, Saudi Arabia, Iraq and Mexico.
Do we prefer to get our energy from North America or from places that don’t like the U.S. very much?
Back to Kessler’s piece. He mentions that 100,000 barrels of oil from Montana and North Dakota will also travel through the Keystone XL pipeline. President Obama ignores this fact.
Now, Anthony Swift at the Natural Resources Defense Council can dismiss this as well. But last year I spoke with people in Baker, MT who told me the Bakken Marketlink would help the town become a regional energy center:
Mona Madler, executive director of the Southeast Montana Area Revitalization Team (SMART) told me that the “Marketlink will be a huge asset.” Not only will it increase the tax base, but it will turn Baker into a regional energy hub that could include a refinery, a power plant fueled by natural gas, and by building plants to capture carbon dioxide for enhanced oil recovery.
President Obama should stick to the facts his State Department collected instead of echoing the false talking points of anti-pipeline opponents.
A vote in the Senate to override President Obama’s veto is expected this week.
Talk of secession is usually reserved for cranks wanting to relive the Civil War, but recently some New York State towns started looking at joining neighboring Pennsylvania.
The reason? Hydraulic fracturing.
The 15 towns are conducting studies to determine whether it would be economically feasible to join Pennsylvania, where natural gas drilling is booming. Among other things, the group, which calls itself the Upstate New York Towns Association, is comparing tax rates as well as cost of living and business expenses in the two states. It expects to complete its study in the coming weeks.
The towns are in Broome, Delaware, Tioga and Sullivan counties.
While both states sit above the natural gas-rich Marcellus Shale, in New York State, Governor Cuomo last December banned hydraulic fracturing after a six-year de facto moratorium.
In contrast, Pennsylvania allows it, and as a result, the Keystone State reaps the benefits record levels of natural gas production.
New Yorkers look with a touch of envy at the job and economic opportunities shale energy is generating for their Pennsylvania neighbors:
“Everybody over the border has new cars, new four-wheelers, new snowmobiles,” said [Conklin town supervisor James] Finch, a Republican. “They have new roofs, new siding.”
Finch said some residents in his town travel the short distance to Pennsylvania, where they work in the fracking industry. Some of those workers, he said, are making six-figure salaries.
In the meantime, many businesses in Conklin are closing, he said.
"The Southern Tier is desolate," Jim Finch told WBNG-TV in Binghamton, which first reported the secession plan. "We have no jobs and no income. The richest resource we have is in the ground."
New York State’s hydraulic fracturing ban is generating frustration, Broome County GOP Chairman Bijoy Datta told IJReview:
These New York towns are literally a stone’s throw from Pennsylvania and they see the economic results of gas drilling – more jobs, new roads, reduced taxes and higher property values – and it’s just out of their reach because big government said “no.”
Secession by these towns is unlikely. Jazz Shaw, who lives in the region, writes at Hot Air, "I can’t imagine the state government in Albany ever agreeing to let some of their citizens flee New York for better conditions."
Nevertheless, it reminds us how valuable embracing America’s energy abundance can be.
A U.S. Chamber Institute for 21st Century Energy report estimates that shale energy development will create 220,000 jobs for Pennsylvania by 2020 and 387,000 jobs by 2035. New Yorkers would like to benefit from the shale boom too.
We’ve been waiting for President Obama act on the Keystone XL pipeline, and he finally took decisive action… by vetoing the bill that would’ve approved it.
He said the bill “cuts short thorough consideration” of the pipeline.
Really? Six-plus years isn’t long enough? How long does he need?
The media responded to the veto with a “C’mon man!”
The USA Today editorial board isn’t buying President Obama’s explanation:
In a terse veto message, the president said the Keystone legislation would "circumvent longstanding and proven processes" for evaluating a project like this one. Oh, please. The administration has been evaluating Keystone for more than six years. There's just no plausible excuse for the epic delay that has turned what should be a relatively minor policy dispute into one of Washington's hyperventilated shouting matches.
Neither is the Wall Street Journal editorial board [subscription needed]:
The reason he gave in a quiet veto message to Congress—no speech, no cameras—was that the bill “cuts short thorough consideration of issues that could bear on our national interest.” The Keystone has been in regulatory limbo for about 2,300 days in perhaps the most extensive permitting review in the history of American government.
The administration’s “more study is needed” excuse is such a farce that reporters laughed at White House Press Secretary Josh Earnest when he used it.
Do you know who isn’t laughing? Construction workers who would be earning good wages building the pipeline. It’s why labor unions have strongly supported the project.
Who else isn’t laughing? Local communities who didn’t expect it would take so long to approve the pipeline and planned school and road improvements around the property taxes generated from the finished pipeline.
Even as Congress attempts to overturn the president’s veto, the State Department’s work on determining if the Keystone XL pipeline is in the national interest continues.
EPA recently tried gumming up the works even more—yes, it’s possible—by asking the State Department to reconsider its environmental analysis in light of falling oil prices.
For the sake of argument, let’s say the green groups and EPA are right, and Keystone will make oil sands production more economical. Is that really such a bad thing?
No. The key point they overlook—whether consciously or not—is that crude oil from Canada is replacing crude oils from other suppliers that have greenhouse gas emissions profiles as high as Canadian oil sands, or even higher.
U.S. refiners along the Gulf Coast and in the Midwest are geared to process heavy, sour crudes, so if they’re not using heavy crude from Canada, they’re using heavy crude from somewhere else, such as the traditional suppliers Mexico and Venezuela.
Data from the U.S. Energy Information Administration (EIA) backs this up. Since Canada started producing from its oil sands in 2003, imports from these two formerly large suppliers have declined sharply. EIA reports that the combined volume of crude imported from these countries to the Gulf Coast and Midwest refining regions in 2013 was 1.0 million barrels per day lower than in 2003, while crude imported from Canada was 900,000 barrels per day higher, almost a one-for-one replacement. That’s no coincidence.
If oil from Canadian oil sands stopped flowing to the United States, what would happen? While U.S. production is up, we still must import millions of barrels of oil each day. Among the likely suppliers that would increase their markets if Canadian oil decreased would be Venezuela.
What would that mean for GHG emissions? According to an analysis by the National Energy Technology Laboratory (NETL), crudes from Venezuela have a life-cycle greenhouse gas emissions quite similar to Canadian oil sands crude. But unlike Canada, Venezuela has hardly been a reliable ally and a major trading partner.
The bottom line: denying the Keystone permit application and over-regulating hydraulic fracturing drilling techniques in the U.S. would make our nation more reliant on imports of oil from sources less reliable than Canada. In the process, there would be no discernable benefit to the environment.
Business and labor criticized President Obama for vetoing the bipartisan bill approving the Keystone XL pipeline.
“By vetoing this legislation and continuing to delay a decision on the Keystone XL pipeline, it is becoming harder and harder to take President Obama’s commitment to job creation and energy security seriously,” said Tom Donohue, U.S. Chamber President and CEO, “The lack of approval for Keystone has major implications for America’s relationship with Canada—our strongest and most reliable ally—and on the way America is perceived around the world.”
“Instead of saying yes to 42,000 good paying jobs and enhanced North American energy security, this veto proved once again that it’s politics as usual here in Washington,” Jack Gerard, President and CEO of the American Petroleum Institute, lamented.
TransCanada President and CEO, Russ Girling, while disappointed with the veto, remained confident:
The facts show Keystone XL passes the national interest determination test and President Obama’s climate test. Without Keystone XL, U.S. refineries are forced to use other methods of transportation to get the oil they need for creating products we all rely on every day.
The Keystone XL pipeline is an issue that has united labor and business, because both understand the job and economic opportunities it will create. The National Association of Manufacturers and Laborers’ International Union of North America (LIUNA) said in a joint statement:
With the stroke of his pen, the President said no to more than just a pipeline. He said no to a conduit for new jobs, opportunities for thousands of working men and women, and energy security for manufacturers here at home.
President Obama’s veto isn’t the end of the story. The State Department still must decide if the project is in the national interest. It should, based on its economic and environmental findings. However, if another agency like EPA objects, then President Obama will make a final decision. There’s no time table for when this will be finished. As we’ve seen with the six-year-plus wait so far, it could be a while.
Read more discussion at memeorandum.
President Barack Obama on Tuesday rejected bipartisan legislation to approve the Keystone XL oil pipeline — and missed a chance to bring many sides together.
Of all the chances to put politics aside and offer a productive gesture of bipartisan compromise, it's hard to not see this as a lost opportunity. The measure was approved by 266-153 in the House, and nine Democrats joined 53 Republicans to pass the bill in the Senate. Furthermore, both labor unions and business leaders came together — along with a broad majority of the public — in support.
After a long journey through every procedural hurdle, Keystone XL has become a poster-child for a larger issue.
Our permitting process makes it virtually impossible to build anything. Clearly we need regulatory and permitting reform.
Yes, we still need Keystone XL — along with a host of other infrastructure projects — but more importantly, we need to fix the system that has allowed progress to get so regularly lost in translation.
The Golden Gate Bridge, the Hoover Dam, and the Pentagon were all built in less time than it's taken for this project to get through the review process.
It shouldn't take 6-plus years to approve (or block) the creation of 42,000 new jobs:022314_ss_keystone.jpg