Date: Friday Mar. 9, 2012 6:33 AM ET
WASHINGTON — TransCanada’s Keystone XL pipeline has been denied a lifeline thrown to it by congressional Republicans.
Yesterday, the U.S. Senate narrowly rejected their attempts to bypass the White House and force the immediate approval of the controversial project.
U.S.President Barack Obama personally contacted some Democratic lawmakers and urged them to vote no.
he argued the State Department must be allowed to do a thorough environmental review of the 7.6 billion dollar pipeline that would move Alberta oilsands crude to refineries in Texas.
Pipeline proponents argue the project will create jobs and help end American dependence on oil from hostile regimes.
Opponents, however, call it an environmental disaster waiting to happen.
TransCanada is still hoping to proceed with the pipeline by rerouting it around environmentally sensitive water resources in Nebraska.
In other news the sun rises in the east and water is wet. Wait! This just in women wants more sex when they are fertile. The title says it all, really. The U.S. State Department along with President Obama denied TransCanada’s permit application not on any other grounds than because House Republicans did not give them enough time to properly evaluate the project.
It has nothing to do with playing partisan politics or keeping a floor under the price of oil as the Americans boost their GDP numbers by being a net exporter of petroleum products. One wonders if this more than any other reason is why they keep sabre-rattling against Iran as well as interfere in other oil markets. Pull the other leg, mr. President it really does play “Jingle Bells.”
Now that the U.S. has successfully bled the rest of the world dry of their oil at $10 to $40 per barrel and given them worthless Treasury bonds in return, they can now become a chief exporter of petroleum having shut off much of their domestic production in the previous generation waiting for this time to come.
The long-term shift looks like a move towards using natural gas domestically while sending thee oil overseas. Denying the pipeline project plays into this strategy while allowing Obama to score points with his base.
Crude futures sold off on the news but recovered to close near $101 per barrel. Natural Gas prices have collapsed in recent months closing below $2.50 per million BTU’s.
The political fall-out and gridlock in Washington DC over the Keystone Oil Pipeline with environmentalists and Democrats blocking its construction has reached a rather toxic political impasse, no not from some proverbial minor oil spill, but smack dab in the middle of the 2012 political campaign. This is a very big deal and has even stolen headlines from the news of the passing on of the Late Great Kim Jong Il of North Korea in some nation newspapers.
On or about December 20, 2011 there was an article in Energy Daily online news, titled; Canada oil may go to China without US pipeline: PM, and it talked about how Senior Harper of Canada stated that if the US doesn’t approve the pipeline (Keystone) pipeline then the Canadians would put in a pipeline to Delta Port BC in Canada where it could be loaded onto ships and taken to China. In other words, the pressure is on, but I still have some comments about all this. yes, I know China is heavily invested in refining, and the Tar Sands in Canada, but that oil could be very expensive, so, do the Chinese really need the oil that badly?
Remember the Chinese economy is starting to sputter, as their exports to the EU have dropped off a cliff, even the shipping industry is noting the slow boat containers loads severely diminished. the concept of Chinese GDP growth of 10% year-over-year does not seem remotely possible moving forward, even with their plan to sell to emerging markets – there just are not enough places to sell all that China is capable of producing, thus, they may not need all that much oil, and buying oil at a very high price may not be doable long-term for them anyway.
There was an interesting post on the Oil-Price (dot) net website which cited the cost of getting one barrel of crude oil from the Tar Sands in Canada at about $27. Remember, that’s the cost before profit. That’s really expensive oil, and at $100 per barrel it’s feasible surely, but can our economy take that hit at the fuel pumps? what about all of our other transportation needs – Rail, Aircraft, Trucks, and Ships? think about it. (Cite: 1/27/2010 Are Canadian Tar Sands Profitable? By Giuseppe Marconi). To answer the questions posited in the article, I’d say; No, not really.
The article stated something I’ve been saying all along; two tons of tar sands are required to produce one barrel of oil. Approximately 75% of the bitumen can be recovered from the sand. Profit margins are limited by the fact that the tar sands cannot be processed as quickly and without chemical processing. Saudi Crude Oil, by comparison can be pumped directly from the ground. and mind you the cost to get a barrel of crude from the Middle East is a lot cheaper indeed; about $2.50 in 2003 and it was about $1.50 in Iraq during that same time (cite: Time Magazine Online – World Edition; Iraq’s Crude Awakening by Donald Barlett and James B. Steele – May 10, 2003).
In 2000, consider this, a barrel of crude oil from Saudi Arabia sold for $26.80 – that is the selling price, not the cost price, which I just referenced. Having a pipeline into the US from Canada means energy security even if we don’t buy that much for the first 10-years and still rely on cheap light-sweet crude from the Middle East. So having the pipeline makes sense, even if the price-point is like the sticker shock from hell when looking at a Chevy Volt in the showroom. please consider all this.
DOGGED BY TAXES: Republican presidential candidate Mitt Romney tried to sidestep the political furor he ignited a day earlier by revealing he pays a federal tax rate of about 15 percent, less than millions of middle-income American families. Romney, a multimillionaire, did not mention his tax returns or tax rate during a day of campaigning in South Carolina. others weren’t as tight-lipped. Gingrich disclosed that he paid 31 percent of his 2010 income in federal taxes, more than double what Romney said he pays.
DOGGED BY OIL: President Barack Obama raised the stakes on a bitter election-year fight with Republicans by rejecting a Canadian company’s plan to build an oil pipeline across six U.S. states to Texas. despite the promise of thousands of jobs, Obama said a February deadline set by Congress would not allow for a proper review of potential harm from the $7 billion Keystone XL project. Republicans blasted the decision as a job-killer and accused Obama of putting politics ahead of the people. Gingrich called the decision “stunningly stupid.” The president was caught between two important Democratic Party constituencies — organized labor, which wanted the jobs, and environmentalists, who feared a disastrous oil spill.
RACE POLITICS: Comments by Newt Gingrich and other GOP presidential candidates about black people, food stamps and getting a job is stoking concerns among some blacks that the political discourse is returning to the days of “Southern strategy” politics, when blacks were used as scapegoats to attract white votes. Gingrich received a thunderous standing ovation during a debate Monday night when he said he would continue to find ways to help poor people learn how to get a job, get a better job and someday own the job. It’s unclear if that strategy — if that’s what it is — will work on an electorate now used to seeing blacks in high-ranking positions. Charles P. Henry, head of African-American studies at the University of California, Berkeley, said he sees such language “as a retreat to the sort of bread-and-butter rallying of those who we might call racist.”
COMING TO a TV NEAR YOU: In a sign that the presidential race is entering a new phase, President Barack Obama’s re-election effort has begun buying television advertising time in six states that will be critical to the effort to win him a second term. a campaign official says the purchases were made in Michigan, Virginia, Ohio, North Carolina, Wisconsin and Iowa. The campaign has yet to run its first campaign commercials, but the decision to buy ad time shows it is moving closer to directly rebutting the Republican presidential candidates, including front-runner Mitt Romney, who are already on the air.
— 31: Percentage of 2010 income that Newt Gingrich said he paid in federal taxes.
— 25: Percentage of federal taxes paid by President Barack Obama and his wife, Michelle, on their 2010 income of $1.7 million, mostly from books he’s written.
— 15: Federal income tax rate that Mitt Romney says he pays.
— Gingrich to release 2010 income tax return.
— Republican presidential candidates meet in Charleston, S.C., for the second and final debate before Saturday’s primary in South Carolina.
— Obama heads to Walt Disney World in Orlando, Fla., to announce a strategy to boost travel and tourism in the U.S., and possibly create jobs.
— “The president demonstrates a lack of seriousness about bringing down unemployment, restoring economic growth, and achieving energy independence. he seems to have confused the national interest with his own interest in pleasing the environmentalists in his political base.” — Romney.
— “President Obama should have chosen jobs and energy security over political appeasement. he is wrong.” — Perry.
— “I will grant the permit to build the Keystone XL Pipeline on my first day in the Oval Office, as well as unleash domestic energy production to strengthen the economy and create jobs.” — Gingrich.
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Obama plans to deny the controversial Keystone oil sands pipeline, sparking praise from environmentalists and scorn from Republicans.
NEW YORK (CNNMoney) — the Obama administration rejected a bid to expand the controversial Keystone oil sands pipeline Wednesday, saying the deadline imposed by Congress did not leave sufficient time to conduct the necessary review.
"the rushed and arbitrary deadline insisted on by Congressional Republicans prevented a full assessment of the pipeline’s impact, especially the health and safety of the American people, as well as our environment," Obama said in a statement.
The pipeline may not be dead though. the State Department, which was tasked with issuing the permit, said the denial does not "preclude any subsequent applications."
Shortly after the decision was rendered TransCanada (TRP), the company that wants to build the pipeline, said it would do just that.
"TransCanada remains fully committed to the construction of Keystone XL," Russ Girling, TransCanada’s chief executive officer, said in a statement. "Plans are already underway on a number of fronts to largely maintain the construction schedule of the project."
The 1700-mile long pipeline expansion, intended to carry crude oil from Canada’s oil sands to the U.S. Gulf Coast, has become a lightning rod in American politics.
Supporters, including the oil industry, some unions and many in the Republican party, say it’s a vital job creator that will lessen the country’s dependence on oil imported from volatile regions.
Opponents fear the pipeline may leak, and that it will lock the United States into a particularly dirty form of crude that might ultimately end up being exported anyway.
The two sides have been squaring off since this summer, with the project highlighting how both sides view larger issues of jobs, the economy, the environment and energy.
Keystone’s opponents hailed Wednesday’s decision as a victory.
"President Obama put the health and safety of the American people and our air, lands and water — our national interest — above the interests of the oil industry," Frances Beinecke, president of the Natural Resources Defense Council, said in a statement. "His decision represents a triumph of truth over big Oil’s bullying tactics and its disinformation campaign with wildly exaggerated jobs claims."
Pipeline supporters were unhappy with the announcement.
"This political decision offers hard evidence that creating jobs is not a high priority for this administration," U.S. Chamber of Commerce President Thomas Donohue said in a statement. "the President’s decision sends a strong message to the business community and to investors: keep your money on the sidelines, America is not open for business."
Why deny Keystone now? The reason a decision is being made today is that under the payroll tax deal reached last month, House Republicans gave President Obama 60 days to either approve or deny the pipeline.
Republicans have made the pipeline a central issue in their attacks against the president, and were quick to respond Wednesday.
"President Obama’s decision to reject the Keystone XL crude oil pipeline is as shocking as it is revealing," Republican presidential frontrunner Mitt Romney said in a statement. "he seems to have confused the national interest with his own interest in pleasing the environmentalists in his political base."
The administration had repeatedly said 60 days is not enough time to conduct the necessary reviews.
In November the administration, which had been studying the application since it took office, delayed a decision on the pipeline until 2013 after vocal protests from environmentalists and opposition from many people in the State of Nebraska, who feared the pipeline’s proposed route over a sensitive aquifer.
Questions were also raised about the State Department’s objectivity in the case when it emerged that a TransCanada lobbyist had close ties to the administration and the company conducting the environmental review for the State Department also had ties to TransCanada.
But the State Department’s reference to "subsequent applications" and TransCanada’s insistence that the project will go forward means this issue is unlikely to go away.
That will be unwelcome for environmentalists, who have hated the pipeline since day one.
They fear it could leak, and say the crude transported to the Gulf Coast may ultimately be exported to Europe or Asia. they also doubt it will really create the jobs supporters promise, saying it could even cost jobs if it helps derail the green economy.
But mostly they are concerned over the environmental effects of developing the oil sands themselves.
Much of the oil sands are currently mined like coal in giant open pits that result in water pollution and deforestation. Companies that operate in the oil sands, including ExxonMobil (XOM, Fortune 500), BP (BP) and Royal Dutch Shell (RDSA), have gotten better at mitigating these impacts, but problems remain.
And because oil sands are just that — sand mixed with oil — the oil needs to be separated out, requiring massive amounts of energy and leaving an overall greenhouse gas footprint 5% to 30% greater than conventional oil.
Pipeline supporters say crude from the oil sands isn’t any dirtier the heavy oil imports it would replace from Mexico or Venezuela.
They say the $7 billion pipeline will create over 10,000 construction jobs in each of the two years it takes to build, generate $5 billion in property tax revenue and pump a total of $20 billion into the U.S. economy over the project’s 100 year lifetime.
Crucially, they say that while the 700,000 barrels of oil a day the pipeline would carry is still imported oil, at least it’s from politically stable Canada.
First Published: January 18, 2012: 1:53 PM ET