The X-factor in Keystone XL

President Obama 2012 pipeline speech. Credit/White House Video

Austin, November 13, 2014 — In purely political moves by both Democrats and Republicans, the U.S. Congress takes up separate bills in the Senate and House for approval of the Keystone XL pipeline, long opposed by environmental activists.

The obviously transparent goal for the Senate bill appears to be a desperate attempt to help Louisiana Senator Mary Landrieu, a Democrat supporting the pipeline, to hold onto her seat in next month’s runoff election against Republican Congressman Bill Cassidy. This, however, may not be the reason that Senate Majority Leader Harry Reid decided on Wednesday to let the bill reach the Senate floor.

The X-factor

An unintended consequence of environmental opposition to Keystone XL is that due to the delay, there will be more tar sand oil dug out of the ground in Alberta than opposing environmentalists ever dreamed possible.

Contrary to popular American belief, the world doesn’t revolve around what we do. Canada isn’t just sitting around hoping President Obama changes his mind. Canada has taken action.

Canada’s Energy East Pipeline route. Credit/TransCanada

Keystone XL has already morphed into five other projects:

  1. Energy East Pipeline (Canada)
  2. Northern Gateway Pipeline (Canada)
  3. Markets Upland Pipeline (Canada)
  4. The Trans Mountain Pipeline (Canada)
  5. Dakota Access LLC Pipeline (United States)

If Keystone XL itself is finally approved and built then there will be as many as six major pipelines transporting oil from Alberta and North Dakota that was originally intended only for the Keystone XL.

As a result of Keystone inaction, Canada has four major pipelines replacing it in the works, two bigger than Keystone XL itself. Another Canadian pipeline is proposed to take North Dakota Bakken oil, originally intended to be transported by Keystone XL, back up into Canada.

The lone new American proposal is to take Bakken oil across the Midwest to Illinois refineries and is estimated to boost Iowa’s economy alone by $1.1 billion.

Canadian and Bakken oil will get to market even if environmentalists stop Keystone XL. That oil is already being dangerously transported by hundreds of trains to Gulf coast and other oil refineries in the United States and Canada.

Without Keystone XL, Canadian tar sand oil and Bakken shale oil will ultimately be transported to Gulf of Mexico oil refineries by supertankers from either the east or west coast of Canada through terminals that already exist or are being built.

What’s up with Harry Reid?

The U.S. House already outmaneuvered Reid today by passed their own version of Keystone XL with Landrieu’s runoff opponent, Congressmen Bill Cassidy, as its sponsor. Whatever political advantage that bringing it up in the Senate is lost.

Democrat Reid’s intention for bringing Keystone XL to a vote in the Senate may have less to do with the Louisiana runoff election than embarrassing the President and forcing him to take an unpopular stand.

Nobody on planet earth thinks Senator Landrieu has a chance of winning the runoff. The only reason there is one is because two Republicans ran against each other in the general election and split the vote.

The Senate is already lost to the Democrats. Should Senator Landrieu miraculously hold onto to her seat it won’t make any real difference anyway.

So why bring up Keystone XL?

Reid’s move could be crafted to help free the Democratic Party to rebuild by openly severing ties with the President. It may also be that Reid blames Obama for the Democrats’ huge losses in last week’s election, particularly in the Senate. Reid may be exacting revenge on Obama for causing him to lose his Majority Leader mantle after protecting the President for the last four years.

Conclusions

Environmentalist opposition to Keystone XL has backfired. There is more pipeline capacity in the works today without Keystone XL then if it would have been build without opposition in the first place.

If Keystone XL is finally built there could be as many as six pipelines taking Canadian tar sand oil and North Dakota Bakken shale oil to U.S. and world markets. The intent of the Northern Gateway Pipeline is to sell Canadian crude to Asia.

The world still needs oil and will for a long time. It is naive of environmentalists and the President to think they could halt Canadian energy development by stopping a single pipeline.

President Obama, though, still seems to think he can. The White House hints that the President may veto any bill that comes to his desk. If so, that will further dim the Democrat’s prospects for a comeback in 2016.

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About azleader

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Posted on Nov 15, 2014, in Canada, Climate, climate change, economics, Economy, Energy, energy policy, environment, news, Opinion, Politics and tagged . Bookmark the permalink. 2 Comments.

  1. The oil flow from Canada to the USA gulf coast will displace nearly identical blends the USA imports from venezuela. The venezuelan oil from the Orinoco Heavy Oil region is 8 degrees API, requires upgrading and or blending just like the canadian “bitumen”. In recent weeks I noticed that venezuelan president (aka dictator) Nicolas Maduro has been giving speeches suggesting that USA greens should work to stop fracking. I suspect a lot of the opposition to the keystone XL pipeline is greased or encouraged by watermelons who understand the Venezuelan dictatorship needs the USA market. Being forced out of that market will cost them dearly. And this is something Obama realizes. However, Obama’s foreign policy has a soft spot for certain leftoid dictatorships.

    • You make good points. From the Venezuelan oil perspective, it matters not to the United States or the world which oil is which, Canadian and Venezuelan oil have environmental down sides. One is no better than the other.

      Venezuela is far more dependent on the U.S. than the U.S. is dependent on Venezuela. No matter what, Venezuelan oil imports into the U.S. will decline.

      The United States will soon be the world’s largest oil producer again at a time when U.S. oil consumption is in decline; for at least a few years before fracked oil begins to dwindle around or just after 2020. Whether Keystone XL is built or not, Canadian and Bakken oil will still make it to Gulf coast refineries.

      The other day, the EIA forecast U.S. gasoline prices will average $2.93/gallon nationally for all of 2015.

      That leaves Venezuela the odd man out. They will just find markets elsewhere, probably China.

      To put it bluntly, President Obama is a screw-up and a total ignoramus about energy policy. His “save-the-world-from-global-warming” ideological mindset is at odds with economic reality and with science. Everything he’s doing now will have to be largely reversed by the next U.S. president, whether they be Democrat or Republican.

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