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Voodoo Environomics

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By H. Leighton Steward
Posted on Feb. 16, 2012

President Obama’s rejection of the Keystone Pipeline wasn’t, as he claimed, based on science or the environment. And it certainly wasn’t based on sound economic policy. The decision was, in fact, the product of Voodoo Environomics: a destructive blend of bad science based on fear-mongering and manipulated research with the bad economics of green job fantasies and “starve the beast” energy politics.

At the very heart of Voodoo Environomics is, of course, the much-hyped theory linking man-made CO2 and climate change. Without the world’s policy focus on CO2 emissions, climate change alarmists would be robbed of the ammunition they need to change and control human behavior via draconian energy policies. They’d also be robbed of the substantial financial support needed to continue their biased research.

When adopted as official government policy, Voodoo Environomics can wreak havoc on the economy and represents a double whammy for working Americans. The admitted goal of CO2-slashing schemes like Cap & Trade is to jack up the price of energies like gasoline and coal to make expensive alternative energies more financially competitive. Of course their proponents hope you don’t realize that it’s ordinary Americans who are stuck paying higher prices for utilities and gasoline.

But the hit working Americans take under Voodoo Environomics doesn’t end with higher utility bills and gas prices. In bowing to environmental extremists in rejecting the Keystone Pipeline project, Obama has abandoned working Americans… or should I say unemployed Americans in search of good jobs.

In fact, Obama managed the rare feat of uniting business and labor in crying foul over this senseless decision. Jay Timmons, CEO of the National Association of Manufacturers decries the loss of 20,000 direct jobs and another 118,000 spinoff jobs that would have resulted from Keystone. Standing next to him, Terry O’Sullivan, head of the Laborers’ International Union of North America said, “Blue collar construction workers across the U.S. will not forget this (decision).”

The application of Voodoo Environomics also puts style over substance. Obama’s rejection of Keystone won’t stop the extraction of oil from Canada’s oil sands – the primary objective behind the pressure to kill the project. Canada will proceed without pause in exploiting their oil sands, regardless of what American politicians or environmental extremists say or do.

Anti-Keystone activists also point to the need to protect the Ogallala Aquifer, which encompasses parts of eight states and underlies a portion of the proposed route of the Keystone pipeline. But reviews of the thousands and thousands of miles of oil and natural gas pipelines over the Ogallala, some of which have been transporting oil for more than a half a century, show no contamination of the aquifer.

What it does do is ensure that oil won’t be shipped and refined by Americans and will likely go to other nations, particularly China. This may sound like hyperbole, and I wish it were. But Canadian Prime Minister Stephen Harper, in lambasting Obama’s rejection of Keystone, said that Canada would look to China to sell their oil.

America’s energy insecurity is moving into a dangerous new phase while our economy remains anemic and unemployment systemic. Rather than strengthening America’s energy position with a close ally and neighbor like Canada, Obama has increased our dependence on energy supplies from less-friendly nations that ensure little or no environmental safeguards.

The negative impact of this decision doesn’t end there. America’s risk exposure to dangerous energy disruptions stemming from global hotspots just went up. Such disruptions, such as those that could result from a crisis such as one brewing in the Straits of Hormuz, would be personal disaster for working Americas and a significant national security crisis for America.

The phantom gains and real losses stemming from Voodoo Environomics are starting to be realized. America needs more opportunities, not lost opportunities. Unfortunately for working Americans, there’s a greater abundance of the latter.

H. Leighton Steward is a geologist, environmentalist, author, and retired energy industry executive. He currently chairs the organization Plants Need CO2.

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OPEC and Obama Team Up to Fight Major Energy Breakthrough

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The world’s energy markets are being completely transformed.

The results of the changes will affect the global power structure, and America is going to be a major benefactor of it all.

If you believe we’re going to live in a utopia of solar panels and windmills, think the world is coming to an end because of carbon dioxide, or happen to be an Arab sheik that’s made a fortune off of America’s endless thirst for oil, you’re not going to like the change.

But if you want to invest in the future of American energy — and make some “evil” profits by helping accelerate the real American energy boom — then you’re going to like where things are headed…

Environmentalists on a Mission

Our helicopter touched down in the middle of a remote forest in the Western Canadian countryside.

The pilot asked, “How long you guys planning to be here?”

“Maybe four or five hours.”

He breathed a sigh of relief.

“That’s good?” we wondered.

“Yes. Last time some people wanted to come out here, I ended up sitting here for 14 hours. A bunch of college kids… they were looking for a rare bird, or a salamander — any kind of animal, really.”

“I take it they weren’t successful.”

“Nope. If they had found what they were looking for, none of what we flew over would be here right now.”

We were up in Northern Alberta, just outside Ft. McMurray. The pilot was talking about the flying he was hired to do for a group of environmentalists on a mission.

They were scouring the region for any reason to shut down all of the oil sands projects. Their last desperate hope was to find a cute, cuddly animal they could use to turn the public against more oil, lower gas prices, and an ample supply of conflict-free energy…

They didn’t find anything, and the boom followed.

As Nick Hodge shows you in this video, the town is absolutely booming. Waitresses are making $20 an hour; mobile homes are on the market for $600,000 — and getting multiple bids!

It’s been building for five years. And there are still new projects being built, expanded, and discovered.

More importantly, it’s just part of what’s changing the future of American energy.

America’s Real Energy Future

America’s energy future will be much different than what most people picture today.

Al-Falih, President and CEO of state-owned Saudi Aramco, summed up what’s really going on in America’s energy industry best when he said earlier this week:

The confluence of four new realities — increasing supplies of oil and gas, the failure of alternatives to gain traction, the inability of economies to foot the bill for expensive energy agendas, and shifting environmental priorities have turned the terms of the global energy dialogue upside down. Therefore, we must recast our discussion in light of actual conditions rather than wishful thinking.

He’s absolutely right.

We won’t be surrounded by solar panels and windmills. The cover has been blown off the scam, and the world is waking up to this fact fast.

But hopes for more energy independence aren’t dying as a result. They’re actually becoming more of a reality than they’ve been in decades.

The U.S. currently imports just 46% of its oil from foreign countries. That’s down from 60% a few years ago. On top of that, less than 20% of those imports come from outside the Western Hemisphere.

Great news, right?

It is for many who want more secure fuel supplies and (eventually) lower prices.

But it’s not good news for everyone. And some very powerful interests are fighting this change every step of the way.

Winning Fighting the Future

The few but powerful are fighting the transformation and breaking out all the old cronyist tools to do so: political influence, fear mongering, etc.

The biggest (and most ridiculous) example came last week when the Obama administration announced it was punting on a “controversial” pipeline.

The project, known as the Keystone XL Pipeline, is to stretch from the oil sands in Alberta down to the refineries on the Gulf Coast. It would also pick up oil from the Bakken formation in North Dakota…

In all, the pipeline would add a steady flow of 435,000 barrels per day to the United States and create as many as 20,000 jobs to build it.

Sounds perfect. A slew of jobs and energy, all paid for without a single dime of government “investment.”

But there’s a problem.

Groups opposing the pipeline claim one of the nation’s largest and most important aquifers — the Ogallala Aquifer, which accounts for 78 percent of the water used by residents and industry and 83 percent of the state’s irrigation water — would be greatly harmed by a spill.

They claim a single spill from the proposed pipeline would endanger the Heartland’s water supply and well over half of the nation’s food supply.

Inside Climate News reports:

Even a fairly localized spill could cause serious problems. The Ogallala is already under threat from over-depletion, because people are pumping out groundwater faster than it can be replenished by rain and snow. The strain is apparent in northern Texas, where some fear another Dust Bowl as the water table continues to drop.
When TransCanada evaluated the risk of spills on the pipeline, it found that over the next 50 years there could be 11 spills, each releasing more than 50 barrels of oil. (A barrel holds 42 gallons.) But a recent research paper by John Stansbury, a professor of environmental and water resources engineering at the University of Nebraska places the risk at 91 such spills over 50 years.

Sounds ominous, I know.

We’ve got to stop a pipeline from going through this aquifer.

The risks don’t justify the rewards…

What they don’t tell you, however, is that the aquifer is already crisscrossed by pipelines (see map below.)

Ogallala Aquifer Pipeline Map

There are dozens of pipelines carrying oil, natural gas, petrochemicals, and more through the aquifer. And they’ve been there for decades.

It makes you wonder, is it really the aquifer they’re fighting?

Of course not. They’re fighting the oil.

And there are a lot of powerful interests on board…

Saudi Arabia probably has the biggest stake in preventing the Keystone XL from ever being built. And it’s only going to get worse.

In order to prevent the riots and upheaval that have swept through many of its neighboring nations, Saudi Arabia has lavished cash on its citizens through public works projects, services, and handouts to the tune of $130 billion.

The aggressive spending has pushed the oil-rich nation to the point at which it needs oil to trade above $88 a barrel just to break even.

But that break-even price is only going higher as its best customer is becoming less dependent…

The United States is now important less oil from Saudi Arabia than it has in ages.

The percentage of oil imports coming from Saudi Arabia have declined from 11.2% to 9.3% five years ago.

The successful completion of a rapid, cost-effective transport system for the massive amount of oil being pumped out of the ever-growing supplies in the Bakken and Canadian oil sands would only further reduce Saudi Arabia’s geopolitical stronghold in the energy industry.

So Long, Wishful Thinking… Hello, Growth and Prosperity

One of the things we like to do in Freedom & Capital is to look back from the future. We do this to put current events in perspective and in the context of a bigger picture.

That’s why we can see these current events from 20 years down the line as the point when the energy world really changed.

Old entrenched interests fought against change and advancement…

Governments and their cronies tried to prevent new energy sources from coming online…

Environmentalists tried anything they could to advance their vision of what the future will look like, regardless of how inefficient and costly…

In the end, simple economics won out.

The old energy companies responded to demand and high prices and they pushed forward, developing everything they could.

And investors who looked beyond the week-to-week madness of the markets, politics, and other events made absolute fortunes.

Good investing,

Andrew Mickey Signature

Andrew Mickey
Editor, Wealth Daily

 

 

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