Friday, November 18, 2011

Inexcusable (or "Obama's plan is to simply say ‘no’ to new energy production.")

That is the only way to describe Obama's decision to delay a decision on the Keystone XL pipeline from Canada until after the 2012 elections:
[T]he talk between Mr. Obama and Ms. Clinton put the pipeline plan in the ditch. About an hour before the State Department issued a press release Thursday afternoon, Ms. Clinton called John Baird, Canada’s minister of foreign affairs, and broke the news.
The State Department, which has already spent 39 months reviewing the $7-billion project, concluded it will wait until the beginning of 2013 to render a decision on Keystone XL. First, it wants TransCanada to come up with an alternate route through Nebraska.
The decision left Canada’s oil industry, which had viewed Keystone XL’s approval as a slam-dunk, alternately gasping and fuming. Keystone XL was a major element of Canada’s energy growth ambitions. The pipeline derailment raises questions about Canada’s trade relationship with the U.S., the world’s largest energy consumer. The timing of the decision also stung, coming just before an APEC meeting in Hawaii where Mr. Obama is scheduled to sit down with Prime Minister Stephen Harper.

Now industry players are wondering how a project whose approval was called a “no-brainer” by Mr. Harper has instead been left to founder.
Officially, the State Department called the decision non-political. A spokesperson said it arose from the growing anti-Keystone revolt in Nebraska that had made it difficult to say the pipeline, in its current form, was in the “national interest.”
But the delay, which will very likely place a final Keystone decision well after the presidential election a year from now, was the culmination of a remarkable few weeks that saw the president take an increasingly personal interest in the issue. That interest, many observers believe, makes it clear this was a political decision, made by a White House eager to hold on to a base of young environmental-minded voters who were instrumental in handing Barack Obama the presidency.
Ah, yes.  The ever-unreasonable environmental movement.  In its current form its one of the few movements in human history to seek to reduce the standard of living of humanity.  Sure, they know we need energy, they say, but they absolutely refuse to allow the production of anything that can actually provide that energy.
“It’s blatant politics,” said David Wilkins, former U.S. ambassador to Canada, in an interview Friday. Mr. Wilkins lobbied for Keystone on behalf of the Canadian Association of Petroleum Producers. “It’s politics at its worst. It was a move by the president to placate a certain wing of his party and I think it was a real travesty.”
Mr. Wilkins pointed out that Mr. Obama had passed up 20,000 Keystone jobs to “protect one job, his own.”
Let me be perfectly clear: there is absolutely no legitimate reason whatsoever to not approve, or even delay approval of, the Keystone XL pipeline.  It would mean hundreds of thousands of jobs and a reliable supply of oil coming into the US from a friend.

But to environmentalists who oppose practically everything everywhere, those are bugs, not features.

This decision could be absolutely disastrous for the US, because Canada could just ship the oil to China:
The U.S. State Department’s decision to delay its review of TransCanada Corp.’s $7-billion Keystone XL pipeline until after next year’s presidential election may doom the project and accelerate Canada’s efforts to ship crude to Asia, Canadian Finance Minister Jim Flaherty said.
“The decision to delay it that long is actually quite a crucial decision. I’m not sure this project would survive that kind of delay,” Flaherty said yesterday in an interview at the Asia-Pacific Economic Cooperation summit in Honolulu. “It may mean that we may have to move quickly to ensure that we can export our oil to Asia through British Columbia.”
The deferral on Keystone XL is a blow to the government of Prime Minister Stephen Harper, who called U.S. approval of the pipeline a “no brainer.” Canadian officials underestimated the strength of resistance to the project by Nebraska farmers and environmentalists, political and foreign-policy experts said.
The State Department said yesterday it will study an alternative route to avoid environmentally sensitive areas in Nebraska. Nebraskan farmers, officials in the state and some members of Congress argue the proposed route across the Sandhills area risks contaminating the Ogallala aquifer that supplies water to 1.5 million people.
Flaherty, who travels to China this week, called the State Department’s move “disappointing,” noting that unions and business groups appeared to back Keystone.
“This project would have provided thousands and thousands of jobs in the United States, a lot of unionized, well-paying jobs,” he said. “The delay, we hope, doesn’t doom the project. We hope it will still happen.”
The project was also opposed by environmentalists who, backed by Hollywood celebrities such as Daryl Hannah and Julia Louis-Dreyfus, said the crude it would deliver from the Alberta oil sands to Gulf Coast refineries produces more greenhouse-gas emissions than conventional oil.
“The whole thing was kind of mishandled by not understanding the local resistance to it,” said Andy Hira, a professor of political science at Simon Fraser University in Vancouver who studies energy policy. Harper and TransCanada need to be more flexible about the route for the project to be approved, he said.
Harper has promoted his country as an “energy superpower,” pointing to its political stability compared with other suppliers. Canada is already the biggest foreign supplier of oil to the U.S. and provides the country with almost a quarter of its crude imports, twice what Saudi Arabia does.
Canada had dispatched senior officials and diplomats to lobby on behalf of the pipeline. In an interview at Bloomberg headquarters in New York on Sept. 21, Harper said approval of the project was a “no brainer” because it would create jobs in the U.S. and help the country secure its energy supply.
Canada seems very interested in matching up their extensive supplies of oil sands energy with America’s large scale refinement capabilities around the gulf coast. But it’s not their only option. As we’ve reported before, a much shorter pipeline could be built heading west to their Pacific coast where another eager customer awaits.


It isn’t a done deal yet. The same report goes on to say that TransCanada may still hold off on their decision while a revised route – possibly not passing through Nebraska – is considered. But that’s going to add on significant delay and drive up the cost of the project by nearly $2B on top of current projections.
It’s nice of them to offer us the benefit of the doubt yet again, but Canada’s patience will not be infinite, nor should it be. If we hold this up for too long, or make demands which drive the price tag up to the point where it’s no longer profitable to build, the Canadians may just take their ball and go play elsewhere. Then we won’t just lose out on tens of thousands of jobs and the security benefits of reducing our dependence on overseas sources. We’ll also get to experience the shock and surprise registered by environmentalists as they come to understand that all of that oil is still going to be produced. And it’s still going to be burned. The chief difference will be that it will wind up being consumed in a country with far fewer environmental regulations regarding emissions and health and safety regulations for the people using it.
Oh… and they’ll get all the jobs and the money too. But why should we worry about a little thing like that?

President Obama’s announcement that he will delay a decision on approval of the Keystone Pipeline until after the 2012 election typifies his feckless presidency. Torn between the need to create jobs, reduce the cost of energy and get our economy going on one hand, and the emotional biases of his environmentalist base on the other, Obama punted. I assume that if and when the time comes–post-election–Obama will do what he has wanted to do all along, and kill the pipeline.
We have written about Keystone a number of times. In this post, we quoted a study that concluded the pipeline would moderate the price of oil and create between 250,000 and 553,000 permanent American jobs. Here, we quoted at length another study of the beneficial effect of the pipeline on our economy, along with related energy development policies. There simply is no doubt that building the pipeline and transporting Canadian oil efficiently to refineries in the U.S. would give our economy a major boost.
If China does indeed replace the United States as the world’s pre-eminent economic power, the foolishness of American voters in electing Barack Obama president will be a major contributing factor.

The first example of the administration putting its own political interests ahead of the interests of the nation occurred last Friday, when it announced that it would decline to make a decision on a proposed pipeline to carry oil from western Canada to refineries along the U.S. Gulf Coast. The Keystone XL pipeline would put Americans to work building the pipeline, would create additional jobs along the Gulf Coast where the oil would be refined.
Predictably, environmental activist groups argued against the pipeline, asserting that we should be weaning ourselves off of oil rather than taking steps to make it more available and affordable. They also argued that the production of this particular oil, recovered from oil sands, imposed more environmental damage than oil produced from conventional deposits. China has nevertheless made it clear that if the United States chooses not to purchase the oil, it will, so a U.S. decision not to purchase the oil will do nothing to alleviate oil sands production, even if environmental activist claims against the process are to be believed.
After reviewing the proposal for several months, the Obama administration was scheduled to announce a decision this fall. Instead, the Administration announced last Friday it would wait until after the 2012 elections to decide.
All the facts have been studied and a decision is ripe for the making. So the question is, why the delay? The reason is obvious; a decision on the pipeline might hurt the president’s reelection campaign. Approve the pipeline and anger the president’s liberal base when he most needs its support. Scuttle the pipeline and Republicans have more ammunition to support their claims that the Obama administration is restricting energy supplies and killing jobs.
A major consequence of the Administration playing political games with the timing of its pipeline decision is that Canada could well decide not to wait around indefinitely for a fickle president to determine whether his personal political career is advanced by approving the pipeline. China will take the oil today and will be more than happy to sign a long-term contract for it. Friendship aside, the smart economic move is to secure a buyer when one can, and friendship only goes so far when billions of dollars of sales are at stake – especially when friendship appears to be only a one-way street right now as Obama unnecessarily leaves the Canadians hanging.
Moreover, the president’s political gamesmanship is keeping domestic oil prices high, and killing jobs. Even if the president announces a year from now that he will approve the pipeline (and even if the Canadians are still waiting around for our decision a year from now), the president will have needlessly prolonged unemployment. If approving the pipeline is the right thing to do, there is no reason other than political self-interest not to give the approval now.
The American gives a very detailed analysis of the Keystone XL issue (complete with diagrams of the proposed pipeline and the current pipeline system) in an article appropriately titled "Obama's Indefensible Pipeline Punt:"

Construction of the pipeline has been opposed on a variety of environmental grounds. The planned XL route was to cross assorted “sensitive” areas; a catastrophic rupture would contaminate Ogallala, the country’s largest aquifer; and, most notably, the pipeline would move “dirty” crude derived from Alberta’s oil sands, whose extraction and upgrading uses considerably more energy, and hence emits more carbon dioxide than, the production of conventional liquid oil. As a result, protests against the XL pipeline have been portrayed as protecting a planet in peril and helping to avert catastrophic climate change.

Here are a few facts to consider. With a total length of close to 3,000 kilometers, the new pipeline would add just over 1 percent to the already existing network of crude oil and refined products lines that crisscross the United States and parts of Canada. Why, if pipeline safety is a key concern, have we not seen waves of civil disobedience focused on more than a quarter million kilometers of existing pipelines?
Long-term statistics show convincingly that there is no safer way to transport large masses of liquids over long distances than a pipeline. Moving the same amount by trucks or rail would be much more risky, in addition to being vastly more expensive. So would be moving the oil from Alberta to British Columbia and then shipping it by tankers via the Panama Canal to Texas.
Are the protesters concerned about fragile landscapes and potential water pollution? A pipeline can be re-routed in order to avoid running through areas seen as fragile and its sections crossing the areas underlain by Ogallala could be designed with even greater safety precautions than the usual standard in order to limit any spill to a small, localized area. All of these are engineering challenges with acceptable practical solutions. Inevitably, no matter how it would be done, there will always be a residual risk: so it will always be with oil imports by supertankers or (as we hear from the opponents of the practice) with horizontal drilling and fracking needed to produce more natural gas.

The pipeline’s contribution to global climate change is presented as the key reason for blocking its construction. Comparison of carbon dioxide emissions from burning products (gasoline, kerosene, diesel fuel) distilled from different kinds of crude oils should be done on a comprehensive, well-to-wheel basis: values for extraction, processing, and transportation may differ substantially, but the values for combustion of refined liquid fuels are virtually identical and they account for an overwhelming majority (roughly two-thirds) of emissions. On this basis carbon dioxide emissions from fuels derived from Alberta oil sands are about 5 percent higher than for an average barrel consumed in the United States.
Even if we assume that the emissions mean for fuel produced from oil sands is 15 percent higher than the prevailing U.S. average (which would be the case if all that oil was produced by steam stimulation, the most CO2-intensive way of extracting oil from sands) this would translate roughly to an additional 70 kilograms of CO2 per barrel of fuel. With the XL’s annual throughput of about 250 million barrels, this would produce additional CO2 emissions of about 18 million tons per year. For comparison, in 2010 alone China’s total CO2 emissions rose by 780 million tons—more than 40 times the additional CO2 that would be emitted annually from the extraction, transportation, processing, and combustion of Alberta oil carried through the Keystone XL to Texas. Put another way, if there would be no oil-sand oil produced in Alberta to feed the XL pipeline and then refined in the United States and the products burned in American vehicles, then the Chinese would generate an additional mass of CO2 equivalent to that prevented burden in less than two weeks.
Here comes the craziest twist: if the opponents of the XL succeed and prevent its construction, there is a strong possibility that Alberta’s oil sand-derived oil will be piped westward to Canada’s Pacific coast and loaded on supertankers going to Asia, to feed China’s grossly inefficient industries.
This is the pattern of Barack Obama's presidency: block new domestic production of oil at every turn.  Another very recent example comes from Ohio:

President Obama's United States Department of Agriculture has delayed shale gas drilling in Ohio for up to six months by cancelling a mineral lease auction for Wayne National Forest (WNF). The move was taken in deference to environmentalists, on the pretext of studying the effects of hydraulic fracturing.
“Conditions have changed since the 2006 Forest Plan was developed," WNF Supervisor Anne Carey on Tuesday. "The technology used in the Utica & Marcellus Shale formations need to be studied to see if potential effects to the surface are significantly different than those identified in the Forest Plan." The study will take up to six months to complete. The WNF study reportedly "will focus solely on how it could affect forest land," despite the significance of hydraulic fracturing to united proponents of the delay, "and not how it could affect groundwater."
Speaking of the WNF gas drilling, one environmentalist group spokesman suggested that moving forward with drilling "could turn the Ohio Valley into Ozone Alley,"  even though Wayne National Forest already has nearly 1300 oil and gas wells in operation.
The Ohio Oil and Gas Energy Education Program (OOGEEP) recently estimated that drilling in the Utica shale, which is affected by the suspension of the mineral lease auctions, would produce up 204,500 jobs by 2015.
"The President’s plan is to simply say ‘no’ to new energy production," House Natural Resources Committee chairman Doc Hastings, R-Wash, said to Interior Secretary Ken Salazar during a hearing pertaining to hydraulic fracturing. "It’s a plan that is sending American jobs overseas, forfeiting new revenue, and denying access to American energy that would lessen our dependence on hostile Middle Eastern oil."
Hastings is right: Obama's plan is to simply say ‘no’ to new energy production.

Ultimately, that is what Obama will say to the Keystone XL pipeline, which has been his plan all along.  If he wins re-election, his only motivation to approve it -- his re-election -- will be gone.  If he is voted from office in 2012, he will probably give a final thumbs down during his lame-duck period.

This needs to be a major campaign issue.  By itself it is reason enough to remove Obama from office.

1 comment:

  1. The amount of stupidity amazes me, wow! I do doubt that this is being banned strictly to appease the environmentalists, I think it is more likely getting banned in order for the democrats to extort/obtain "campaign contributions" from the U.S. and Canadian firms.