MARCH 16, 2012 2:57PM

Case For the President to Approve Altered Keystone Pipeline

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To be crude, get it, how about this as the case, a Rick Santorum spot for President in late October, 2012

"President Obama refused to build the Keystone Pipeline from close to home from Canada, not the Middle East, in spite of the Iranian nuclear program, that Israel struck after Iran tested a nuclear weapon this May.  Although God bless our troops occupying the Straits of Hormuz and the Free Arabic Republic of Khuzistan with our allies the Mujahedin e Khalq in their war with the mullahs, if Keystone had been underway, maybe gasoline wouldn't be $10 a gallon."

Paid for by Rick Santorum for President. 

Why find out if that spot would be like Ronald Reagan saying to you know who something about howya doin out there four years later, crudely speaking?

The Keystone Pipeline is a curious affair, as on the surface, its hard to see what the argument would really be about, if much that constitutes American politics is no longer on the surface, but buried in tar sand, so to speak.

As to the Keystone Project, to build a pipeline from Canadian tar sands to the Gulf of Mexico, there is of course a signficant environmental impact to such a large endeavor, although there exist zero large-scale projects of any sort, oil or not, that don't have significant environmental impact.

Building a pipeline isn't exactly Gingrich's moonbase either, as to understanding the technical issues, like moving well away from the Ogallala Aquifer, the latter being the one concern one can understand, just in case, as that's a major national asset that if someone hurt from another country, we'd have to burn down one third of their cities to retaliate in kind, since the aquifer is one third of our water supply, or go North like in that wire shore, and grab some Cannook water.

Other than that, Keystone as a pipeline per se is not so much a big deal really, as the U.S. is criss-crossed by pipelines already, so, who exactly are we kidding?

Does a certain actor known to protests things actually walk everywhere?  Does the Little Mermaid not use some sort of petroleum in her existence, somewhere, somehow, like plastic of some form or another?

Possibly, some of the objections to the Keystone Pipeline are not actually about the pipeline per se, but about the source of the oil: both Canadian, and especially tar sands.

As to the latter, oil from tar sands is not pretty to extract, as it effaces the landscape, if not on Cape Cod or in California, but where even polar bears prefer zoos to live in, and involves all sorts of cooking of the sand to extract the oil before shipment, and even then, the oil isn't as nice as Libyan crude, Libyan crude being the best in the world to refine.

That was the argument some people made to delete Qadhafi, to have that in an Army sack, so to speak, just in case things got nasty with Iran, in which seizing the Free Arab Republic of Khuzistan could be done, but would take a lot more effort, and of course be more of a risk with WWIII with China and Russia, as to alternate possibilities out there.

Of course, Libya is a lot farther away from American military forces than our rivals in the War of 1812 and hockey, should oil need to be secured in wartime too, not a trivial argument as to sources of oil supply; just in case.

Moreover, we can see in the CPI data today and the uptick in inflation that gasoline prices pretty quickly start to make the "headline news" in a bad way, not good economically for the country, or politically for the President, at least in the latter case past a certain point.

Certainly, the President has a large environmental constituency to please, and that's reasonable to seriously consider as to the objections voiced over the Keystone Project, especially the Aquifer.

That Aquifer issue is a real one, although just moving the stupid thing over isn't that big a deal, and won't cost the Canucks very much money, and of course, in wartime contingencies, we have to grab what oil we can anyway, and so, its really no big deal for them to move the pipeline a little bit, and build some of the steel in Canada for that move, and of course, all this talk about higher gas prices in the Midwest as a reason could backfire too, and who really knows who pays Dr. V's bills at the end of the day.

But, if the President gets to make the Keystone Project happen, and moves the Pipeline to address a real concern, somewhat, although Alaska seems to do o.k., and its more vulnerable to "terrorists" disguised as Spetznatz, like in the movie, except that was a military concern, and still is, then its like the whole contraception flair-up for the President: a total win.

He gets to save the environment, throw a little hint out to people that gas will be cheaper, run steel mills in Midwestern states harder, which also is by definition anti-inflationary, and, best of all, maybe even throws in his own idea about more of that oil being stored near the Strategic Petroleum Reserve.



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Right. He is bargaining over something real in the Aquifer too, if I think there is a constituency in his party that is motivated by other things unstated, maybe partly concern, which is real, over the signal to the Middle East. That has to be handled super, super carefully.
I do see it happening. As you say, it will be a huge political win for Obama. He looks properly concerned for the environmental issues, and properly concerned for domestic oil supply.
I'm actually fine with the pipeline
The reservoir was legitimate, and its all a lot of gamesmenship, if now... I don't think that really serves the President's interest if it goes too far, and just move a little zig here, a little zag there, and oila!
I'm not opposed to it, but from what I can tell, some folks in Nebraska aren't so hot on it.
However, the idea it's going to lower gas prices is an outright fraud and, as you note, it can result in higher gas prices in the Midwest. It's mostly if not entirely for export, from what I read. Also, it's not really petroleum, it's bitumen. I can be cooked into synthetic petroleum, but that doesn't have the same varied use as good ol' conventional oil, especially the sweet crude we have down here in Okiehomer.

ANWR has nowhere near a 300 year supply. The last USGS estimates I read were around 10Bbl of oil, or about a 1 year domestic supply.

The whack-a-doodle Magic Oil stories are running rampant again.
They did drop that estimate on ANWR, and all U.S. reserves, very dramatically, if for me, that argues for as much energy as possible and as close to U.S. Armed Forces as possible, green, nuclear, all of it, the more the merrier.
EIA USGS estimates, ANWR--

There is a 95 percent probability (a 19 in 20 chance) that at least 5.7 billion barrels of oil are recoverable.

There is a 5 percent probability (a 1 in 20 chance) that at least 16 billion barrels of oil are recoverable.

The mean (expected value) estimate is 10.3 billion barrels of recoverable oil.
10 billion barrels is one fourth of Libyan proven reserves, not a small amount, if of course at consumption at 20 mpd, not going to solve our problems. Libya could be more like 100 mpd in reality. Iraq's reserves are coming in very large, same with Iran, and we don't really know the Saudi situation, as they don't let that out very much really, although it seems it is getting harder there to extract. On the brighter side of things, there is a reason to believe that between Brazil and Africa, that's a huge amount too, if for later down the line. You have to be Persian Prince and Ride and Afghan Carpet before you can do some of those other things.
10 bbl and a 1 year domestic supply is a far cry and leap from 300 years worth of oil and nat gas. 10Bbl is based on 10 "plays" in ANWR, but it is true the USGS isn't positive those numbers are entirely accurate compared to what might be exploited. However, it is safe to say 300 years worth is absurd.
The amount of truly contrived, politicized oil propaganda is astonishing. The fake Energy Think Tanks that push the crap are numerous. I read one just the other day, liked off of Real Clear Politics. Subject: Obama underestimates US oil by 60 times. The article was garbage, and the source was a political garbage think tank. That those are always on the Right is expected anymore.

The really funny thing is the oil companies have proven reserves they could drill now, if they wanted to invest in more equipment. The really hilarious thing is the delusion it takes to assume the oil cos are in a hurry to invest billions to increase supply and lower the cost of oil.

This junk comes up every time the speculators and/or demand and ME war talk starts.
Reserves are in general a funny thing in that industry PJ, as the tax treatment on depletion, and their manipulability, creates a lot of games to be played, especially since it is an loose oligopoly of an industry, loose, but there as to pricing power, and it is a commodity of low elasticity demand too.
It's the low elasticity that is the problem. In a hollowed-out economy, the speculation manipulation becomes a way to profit without having to produce. As the economy runs on petroleum, it mis-allocates consumer spending, which has already been permanently diminished and continues that path, ever-accelerated by oil price manipulation. If that was the only thing sucking the life blood from the economy, it might be easier to deal with.

We've already ended up with consumers without purchasing power and wads of pointless capital beyond context to a functioning economy. It will only get worse before it gets worse.

On the upside, a little starvation and some more walking will cure the obesity problem.
But that PJ is the theory of maximing energy production from all sources, including exporting to some places that some of the Few, haven't, dirty little secret, wanted too.
There's plenty of energy to go around actually, if some producer interests wouldn't like the pricing pressure, they think, except, if BTU's fall in price, then people will find uses of energy one would think over time too. That's my take, after a lot of watching policy debates where the arguments don't .... hold a lot of water, and then you see some alliances that are sometimes funny, like Texas oilmen and environmentalists who don't want their "Coastal view" spoiled, but, but, they say they want happier Africans. Well, if you look at the best correlation of lifespan to GDP, guess what it is: energy usage per capita.
I like my wilderness as much as anyone, but, not at too high a price.
I can buy the energy usage to lifespan data and point out they're exporting our lifespans.:)
Lots of downside aspects. Price manipulation, mega-mergers, lack of refinery competition, lack of competition in general and paid-off politicians.
Just as a cross nationally valid correlation, guy on TED puts it up, but you can see it otherplaces, ceteris paribus, more energy usage equals longer lifespans.
Yes, rwnj,
The hilarious abiotic oil canard.

I guess we missed that one.
It's like that old joke about the ogre who keeps filling the mayonnaise jar the old couple leaves on the table by squeezing the big zit on his face.

Sorry, rwnj. It's dumb on several levels, not the least of which is that the higher the temperature, the more impossible for petroleum to form. Also, if it was true, there would be petroleum deposits in other places besides where ancient seabeds supplied ample quantities of dead life forms.

Now I feel I have to ask. Do you really think Keebler cookies are made by elves in hollowed-out trees?