Is the Keystone XL Pipeline Really Needed?

Is the Keystone XL Pipeline Really Needed?

I read many articles that show production and even exports of crude oil is up in the U.S. U.S. oil production reached 7.5 million barrels a day in July, the highest monthly output level since 1991, according to a new government report, the San Antonio's Home Page newspaper reported. According to Census bureau export data reviewed by the Financial Times, the value of petroleum and coal exports more than doubled. There are claims of a high number of jobs that would be created but a State Department report shows that although about 42,000 jobs might be possible over a 1-2 year period that the Keystone would generate only 35 permanent and 15 temporary jobs. “Based on this estimate, routine operation of the proposed pipeline would have negligible socioeconomic impacts.”

U.S. Oil Production and Exports are Up

In an expert commentary August 20, 2013 Fadel Gheit Oil & Gas Senior Analyst at Oppenheimer & Co. by Dukascopy Bank Team | Dukascopy Bank SA Fadel was asked:
 
U.S. oil production reached 7.5 million barrels a day in July, the highest monthly output level since 1991. Do you see the lawmakers removing the limits on crude exports in the future?
He responded "It is difficult to predict what Washington will do, but high oil prices should continue to boost domestic production. However, the US is still importing more than 50% of its oil consumption. There is a ban on crude oil export from the US, but light sweet crude production has exceeded domestic demand levels and the industry is calling on Congress to allow swapping light sweet crude for heavy sour crude, which would benefit both oil producers and petroleum refiners in the US."

Also on August 20, 2013 the MySA, San Antonio's Home Page newspaper reported "U.S. refineries such as Valero's in Three Rivers pushed domestic oil production to 7.5 million barrels a day in July, the highest monthly output in 22 years, and the U.S. Energy Information Administration says production could exceed imports by October."

• U.S. oil production reached 7.5 million barrels a day in July, the highest monthly output level since 1991, according to a new government report.
• In its Short-Term Energy Outlook, the U.S. Energy Information Administration also said U.S. production could exceed imports by October for the first time since early 1995.
• The agency projected that production for the full year will average 7.4 million barrels a day, rising to daily output of 8.2 million barrels in 2014.

On August 19, 2013 on this blog in a post titled "US Fuel Exports Emerging as Driving Force in Obama's Goal of Doubling Exports by 2015" A lead story by James Politi in the US and UK editions of the Financial Times says "The value of US fuel exports has grown faster than other goods and commodities during Barack Obama’s presidency, according to a Financial Times analysis," and that it is emerging as a driving force behind his goal to double exports by 2015. http://www.ft.com/cms/s/0/0db6b1ca-081e-11e3-badc-00144feabdc0.html#ixzz2cQ8ZAHOG

But What About All The Jobs the Keystone XL Pipeline Will Create?

We all know that what we need in this country right now is jobs. Proponents of the Keystone XL pipeline say a good number of permanent jobs would be created. The president has recently questioned how many permanent American jobs would be created by the project, accusing supporters of inflating the number. A leading opponent of the Keystone XL pipeline said Thursday's announcement shows that the company is nervous about Keystone XL in reference to the TransCanada plans.

Omaha.com published an article August 1, 2013 by Joseph Morton / World-/Herald Bureau   titled "Lee Terry to President Obama: Let's talk about Keystone." Omaha's Republican Rep. Lee Terry said he's worried that recent comments from the Obama administration indicate the president is poised to kill the politically charged project. In a letter to President Obama, Terry and other top Republicans on the House Energy and Commerce Committee took issue with the president's downplaying the pipeline's job-creation potential.“We are concerned that your most recent statements have signaled an arbitrary and abrupt shift in how our nation approves cross-border energy projects,” they wrote. “Your recent comments have only added to the immense amount of uncertainty that currently surrounds the Keystone XL approval process, unnecessarily jeopardizing $7 billion in private investment.” In their letter, Terry and the other members said the president has politicized what was previously a straightforward, apolitical process for reviewing such cross-border projects.They asked him a series of questions about the standards he will be using to make his decision on the pipeline and his view of the ongoing process. 

But there was no mistaking the thrust of his recent comments. Obama clearly came down on the side of pipeline opponents who have characterized as overblown claims that the pipeline would be a jobs machine.
“Republicans have said that this would be a big jobs generator,” Obama said in an interview with the New York Times. “There is no evidence that that's true. The most realistic estimates are this might create maybe 2,000 jobs during the construction of the pipeline, which might take a year or two, and then after that we're talking about somewhere between 50 and 100 jobs in an economy of 150 million working people.”
 
In their letter, Terry and the others pointed out that the State Department's own reviews of the pipeline have predicted higher job numbers. “Including direct, indirect, and induced effects, the proposed project would potentially support approximately 42,100 average annual jobs across the United States over a 1- to 2- year construction period (of which, approximately 3,900 would be directly employed in construction activities),” a State Department report said. That report also noted that pipelines have their biggest economic impact during construction and that once in place, the Keystone XL pipeline would require minimal labor. “Operation of the proposed project would generate 35 permanent and 15 temporary jobs, primarily for routine inspections, maintenance, and repairs,” the report said. “Based on this estimate, routine operation of the proposed pipeline would have negligible socioeconomic impacts.”

Environmental Concerns

"The Blog" by Huffington Post on August 20, 2013 posted an article by Tom Steyer, a business leader and investor titled "Keystone XL Pipeline Will Raise Gasoline Prices, Not Just Environmental Concerns" which stated The Environmental security has rightfully been a rally cry of clean air advocates opposed to the Keystone XL pipeline, which poses tremendous environmental hazards from leaks of the oil itself to emissions of toxic additives on the line to greater carbon output in refining of tar sands oil. New evidence shows economic security and energy security are equally important reasons for the president to oppose the pipeline. 

What About Gas Prices?

Statements from pipeline developers reveal that the intent of the Keystone XL is not to help Americans, but to use America as an export line to markets in Asia and Europe. As Alberta's energy minister Ken Hughes acknowledged, "[I]t is a strategic imperative, it is in Alberta's interest, in Canada's interest, that we get access to tidewater... to diversify away from the single continental market and be part of the global market."

 The last thing Americans, or the American economy needs, is another jump at the gas pump. A new report by Consumer Watchdog finds that's what America will get if the president approves Keystone XL pipeline: a 25 cent to 40 cent gas price hike in the Midwest, and pain at the pump all the way to California.
 
Huffington Post's Tom Steyer also states that relatively cheap Canadian tar sands crude, which is more than half of the crude oil used in Midwest refineries, and increasingly the source of Western refiners, will get a lot more expensive if the XL pipeline developers have their ways. Their articulated goal for the global market: raising the price per barrel of Canadian tar sand oil by $30, from $70 now charged to the $100 per barrel now commanded by Mexican Maya crude oil in the Gulf. 

As a businessman, I can understand that profit motive. But what it means for U.S. drivers is higher gasoline prices. When crude prices go up, gasoline prices go up. Why build the Keystone XL if it will hurt the consumer and the environment? As reported this morning in the Des Moines Register, in the Midwest, in particular, the 40 cent per gallon increase at the pump that the report identifies is going to do grave damage to the economy. 

If a Pipeline is Needed, Are There Any Better Alternatives?

Omaha.com published an article August 1, 2013

TransCanada plans pipeline across Canada, says Keystone XL still necessary

By Paul Hammel / World-Herald Bureau which stated TransCanada Corp. announced plans Thursday to build a $12 billion oil pipeline across Canada with one-third more daily capacity than the controversial Keystone XL pipeline.If we need a pipeline why not build one that has more capacity since the environmental and other concerns would be no different.

We All Need to Contact Our Congressman and Senators

We cannot allow the oil and gas industry to continue to destroy our air and water for no other reason than to make even bigger profits than the average $30 million every three months. We cannot allow them to make these profits and do this damage while stating that the Keystone XL Pipeline is "good for Americans" when in fact, it's only good for their bottom line. Once the pipeline would become operational, in about 2 years, only 50 permanent jobs would exist. 

I have started a petition through MoveOn.org to stop the Keystone pipeline, please click the link below to make your representatives know how you feel, and that you expect them to represent you.

http://petitions.moveon.org/sign/congress-senate-dont?source=c.url&r_by=8543303