Friday, December 23, 2011

The House Republican cave-in and Keystone XL

Part of the payroll tax cut extension deal (that the House GOP came to their senses on last night) is that Obama must fast-track the decision on the tar sands pipeline. It would be on the same deadline -- 60 days -- as the tax cut extension itself. The good news is that this gives the president a golden opportunity to kill Keystone XL. For now, and perhaps for good.

Which may be exactly what the GOP wants: a bat to beat Obama with in 2012 over the economy. But that apparently isn't going to work, either.

House Republicans keep trying to give President Obama a political black eye by wielding the 36-inch diameter Keystone XL pipeline as a cudgel just before Christmas.

Instead, they could end up severely maiming only themselves if they persist with end-of-year legislative theatrics at what some are referring to as the "Capitol Hill Playhouse" this week.

"It's quite a sandbox, isn't it?" Pat Parenteau, a Vermont Law School professor who specializes in Congress and environmental issues, told InsideClimate News. "I think their strategy has backfired and that they've roped themselves with this political gambit. This idea that you have to keep introducing ideology into every issue, that will be their undoing." [...]

This angle developed last week on 'Countdown', but the House GOP's Epic Fail Follies drowned it out.

(skip to the 2:20 mark if you don't need the background, current at the time of this video just to last week, with the Senate's passage of the payroll tax bill)

More on the scam that is Keystone XL with respect to jobs, where the refined oil is going, how it will raise oil prices on the world market AND avoid paying US taxes (bold emphasis is mine):

One of the most important facts that is missing in the national debate surrounding the proposed Keystone XL tar sands pipeline is this – Keystone XL will not bring any more oil into the United State for decades to come. Canada doesn’t have nearly enough oil to fill existing pipelines going to the United States. However, existing Canadian oil pipelines all go to the Midwest, where the only buyer for their crude is the United States. Keystone XL would divert Canadian oil from refineries in the Midwest to the Gulf Coast where it can be refined and exported. Many of these refineries are in free trade zones where they may be exported to the international buyers without paying U.S. taxes. And that is exactly what Valero, one of the largest potential buyers of Keystone XL's oil, has told its investors it will do. The idea that Keystone XL will improve U.S. oil supply is a documented scam being played on the American people by Big Oil and its friends in Washington DC.

Canada's excess pipeline capacity is well known. In a Department of Energy report evaluating Keystone XL's impacts on U.S. energy supply over the next twenty years, the agency found that it will take decades for Canada to produce enough oil to fill existing pipelines. On page 90, the report concludes that the United States will import the same amount of crude from Canada through 2030 whether or not Keystone XL is built.

From Canada's perspective, the problem with existing pipelines is they all end in the U.S. Midwest and only allow one buyer - the United States. As Canada's Natural Resources Minister Joe Oliver recently said, "we export 97 percent of our energy to the U.S. and we would like to diversify that." However, the Canadian government has put the breaks on the two pipeline proposals to export tar sands through its provinces due to the need to take more time to listen to its own public's concerns about water and safety. Keystone XL would be Canada’s first step in diversifying its energy market. The pipeline would divert large volumes of Canadian oil from the Midwest to the Gulf Coast, where it would be available for the first time to buyers on the world market. To sweeten the deal, many of the refineries on the Gulf Coast happen to be located in foreign trade zones, where they can export Canadian oil to the world market without paying U.S. taxes.

Oil Change International investigated this issue in a report that found the Keystone XL pipeline was part of a larger strategy to sell increasing volumes of Canadian crude on the international diesel market.When Canadian regulators at the National Energy Board (NEB) considered the Keystone XL proposal in 2008, they asked TransCanada to justify another pipeline when there was already so much spare capacity. TransCanada conceded that Keystone XL would take oil from existing pipelines, increasing shipping costs. However, TransCanada argued that this cost would be more than offset as shifting Canadian oil from the Midwest to the Gulf would increase the price that Americans paid for Canadian oil by $3.9 billion.

So let's review: Keystone XL will raise oil prices, dodge paying taxes, create only a handful of temporary construction jobs and further destroy the environment. What's not to like (if you're a Republican)? If Obama can't win this debate with the GOP in the court of public opinion... well, he deserves to lose.

For the first time in a long time, I am hopeful that Keystone XL is not going to happen.

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