Obama will be in Cushing, Okla., the start point of the pipeline’s southern half on Thursday
Citing a senior administration source, CNN reported on Tuesday that Obama wants to slash several months off a permit approval process that can ordinarily stretch on for as long as a year.
The administration wants to speed things up to deal with a glut of oil in Cushing, Oklahoma, where crude from the Midwest runs into a logjam on its way to refineries on the Gulf of Mexico.
Obama will make the announcement Thursday at a storage yard in Cushing, the starting point of the pipeline’s southern half.
Pipes that will be used to build Keystone XL to the Gulf Coast are being housed at the facility.
Gas prices rising
The announcement comes as prices at the pump continue to soar. Republicans are blaming Obama’s energy policies for rising gas prices and continue to attack him for rejecting Keystone XL in January.
The U.S. average price for a gallon of gasoline rose for the 11th straight day on Tuesday to $3.85 US, and soared to $4 a gallon in some states. That would amount to a little over a dollar a litre in Canada.
Millions of barrels of unrefined crude are sitting in storage facilities in North Dakota, in particular, but there’s a lack of pipeline capacity to carry it to the Gulf Coast and a limited number of rail cars that can transport the oil south. The state is currently in the throes of a major oil boom thanks to the discovery of the so-called Bakken Shale.
Obama’s recent praise of Calgary-based TransCanada’s decision to proceed with the construction of the southern segment of the pipeline signalled a shift in attitude from the White House after it rejected the pipeline outright in January.
The entire length of the proposed, $7.6 billion pipeline would stretch from Alberta’s oilsands through six U.S. states to the Gulf Coast.
No decision from State Dept.
The U.S. State Department has yet to make a decision on the pipeline, saying it needs more time to conduct a thorough environmental review of a new route around an environmentally sensitive aquifer in Nebraska. State department officials are assessing the project because it crosses an international border.
In November, under mounting pressure from environmentalists, the State Department deferred making a decision on Keystone until after this year’s presidential election, citing concerns about the risks posed to the aquifer.
Pipeline proponents cried foul, accusing Obama of making a cynical political move aimed at pacifying the environmentalists of his base and improving his chances of re-election.
Republicans then held the administration’s feet to the fire, successfully inserting pipeline provisions into payroll tax cut legislation in late December.
Within a month, facing a mid-February deadline imposed by that measure, Obama nixed TransCanada’s existing permit outright, saying there wasn’t enough time to thoroughly review a new route before giving it the green light.
But Obama also assured Prime Minister Stephen Harper that the decision did not reflect on the pipeline’s merits, but was merely necessitated by Republican pressure tactics. He welcomed TransCanada to propose another route.
- Obama said ready to push partial Keystone XL approval (cbc.ca)
- Politics sank Keystone XL, Exxon says (mb50.wordpress.com)
- Obama to fast track southern portion of Keystone XL Pipeline (whitehouse.blogs.cnn.com)
- As Obama supports part of Keystone XL, TransCanada stops to remove a pig from a pipe (macleans.ca)
- Obama Heading To Oklahoma To Fast-Track Southern Leg Of Keystone XL (thinkprogress.org)
- President Barack Obama’s four-state energy tour stops in Oklahoma on Wednesday (newsok.com)
At this State of the Union address, President Obama proudly stated that “American oil production is the highest it’s been in eight years” and declared that his Administration would “open more than 75 percent of our potential offshore oil and gas resources.” While President Obama spoke favorably of the role that oil and gas development play in America, the President’s and his Administration’s actions don’t match with his words.
There are several areas where the President and his Administration are unreasonably hindering access to more oil and gas for Americans and threatening the industry with punitive measures:
- Keystone permit rejection. The Keystone XL pipeline would deliver oil from our Canadian ally, relieve some of the pain of high prices at the gas pump, and create jobs in America. Nevertheless, and despite a State Department environmental review concluding that the project poses no significant environmental risk, the President chose to reject TransCanada’s permit application to build the pipeline.
- Targeted tax hikes. The President continues to threaten the oil industry with targeted tax hikes. Under the rhetoric of eliminating subsidies for the industry, the President’s proposal would eliminate certain tax treatments for oil that are available to many industries, effectively singling out the oil industry for a tax hike.
- Slowdown of production on federal lands. While American oil production has been increasing, the vast majority of that production is taking place on private lands. Production on federal lands is actually 40 percent lower than it was 10 years ago. The House Natural Resources Committee also reports that under the Obama Administration, 2010 had the lowest number of onshore leases issued since 1984.
- Fracking regulation. Hydraulic fracturing (or “fracking”) is a proven oil and gas extraction process that should not be subject to overly burdensome regulations. The Environmental Protection Agency is currently considering federal regulation of the fracking process under the Safe Drinking Water Act. The problem is that the agency is following a procedure that even the Department of Energy criticized for its “selective focus” on “negative outcomes.”
Words alone will not make energy more abundant and affordable, nor will they create the energy-related jobs that would make the American economy stronger. If the President is truly concerned about increasing America’s energy access, he certainly has a funny way of showing it.
For policies in that direction, Heritage policy analyst Nick Loris explains in two papers how to make gas and electricity prices more affordable and how to create jobs and raise government revenue through energy exploration.
- Natural gas sector set up by Obama to be sabotaged? (mb50.wordpress.com)
- Obama loves oil – Not! (mb50.wordpress.com)
- No energy industry backing for the word ‘fracking’ (mb50.wordpress.com)
- Is President Barack Obama responsible for U.S. oil production rise? (mb50.wordpress.com)
Submitted by Tyler Durden on 01/24/2012 08:36 –0500
Just when one thinks American crony capitalism couldn’t hit new lows, here comes Warren Buffett and his personal puppet, the president, proving everyone wrong once more. Because if one thinks there is no (s)quid pro quo for all that “sage” advice that Buffett has been giving to Obama on extracting as much wealth as possible from future wealthy Americans (before they decide they have had enough with this crony shit and leave the country for good), one would be fatally wrong. As it turns out, it is not just natural resources and aquifer purity that Obama had in mind when sealing the fate of the Keystone XL pipeline. No – it appears there were far more relevant numerial metrics that determined Obama’s decisions. Such as the bottom line number of Buffett’s Burlington Northern, which according to Bloomberg, is among U.S. and Canadian railroads that stand to benefit from the Obama administration’s decision to reject TransCanada Corp.’s Keystone XL oil pipeline permit. ‘“Whatever people bring to us, we’re ready to haul,” Krista York-Wooley, a spokeswoman for Burlington Northern, a unit of Buffett’s Omaha, Nebraska-based Berkshire Hathaway Inc. (BRK/A), said in an interview. If Keystone XL “doesn’t happen, we’re here to haul.” And quite delighted to reap the windfalls of unfounded populist fears she forgot to add. Because while the whole “carbon-credit” multi-trillion top line expansion scheme for Goldman under the pretense of actually caring for the environment may have collapsed, it is not preventing others from trying and succeeding where even Goldman has failed.
Rail car production is already at a three-year high as manufacturers such as Greenbrier Cos Inc. (GBX) and American Railcar Industries Inc. (ARII) expand to meet demand for sand used in oil and gas exploration, according to Steve Barger, an analyst at Keybanc Capital Markets Inc. in Cleveland, citing Railway Supply Institute statistics.
Rail-car suppliers can add capacity, Hatch said.
“Railroads are not just a stopgap while we wait for a pipeline,” Hatch said in an interview. “They are potentially part of the long-term solution.”
Railroads are being used in North Dakota (STOND1), where oil producers have spurred a fivefold increase in output by using intensive drilling practices in the Bakken, a geologic formation that stretches from southern Alberta to the northern U.S. Great Plains. During 2011, rail capacity in the region tripled to almost 300,000 barrels a day as higher production exceeded what pipelines handle, according to the State Department report on Keystone XL.
Burlington Northern carries about 25 percent of the oil from the Bakken, said Krista York-Wooley, the railroad spokeswoman. The company can carry higher volumes from North Dakota or Alberta, she said.
Canadian Pacific Railway Ltd. (CP)’s shipments from North Dakota climbed to more than 13,000 carloads last year from about 500 in 2009, Ed Greenberg, a spokesman, said in an e-mail. The Calgary- based company has a similar plan in western Canada.
“With an extensive rail network and proven expertise in moving energy, CP offers a flexible option for transporting crude oil and other energy-related products to and from key locations in North America,” Vice President Tracy Robinson said in an e-mail. “Rail is scalable, allowing CP to effectively keep pace with the shipping needs of producers.”
So those wondering how it is that AAR railroad statistics continue to be so very strong, it is not because the economy actually justifies it: it is because crony interests such as those of the Octogenarian of Omaha demand it as “payment” for their crony collegiality with the biggest dunce president since Carter.
In other news, it is truly amazing how with every new development, America is now becoming like one giant conspiracy theory, only this time it is actually not a theory as with every passing day we see it enacted in practice.
- Investopedia: The Keystone XL Pipeline Explained (wire.kapitall.com)
- Demise of Keystone XL Means More Bakken Shale Gas Flaring (desmogblog.com)
- State Department to Reject Keystone XL Pipeline Reroute (inquisitr.com)