WSJ: The Keystone Democrats

“President Obama, of course, would have vetoed the measure had it ever reached his desk. But any such straightforward expression of his own beliefs would have put him on the wrong side of unionized workers the pipeline would have employed or voters worried about the unemployment rate.”

The Wall Street Journal editorial is below.

Review & Outlook
Wall Street Journal, March 10, 2012

The best way to judge a politician’s true intentions is to look at what he does, not what he says. By that measure, Thursday night’s 56-42 Senate vote to kill an amendment to fast-track the $7 billion, shovel-ready Keystone XL pipeline contains a wealth of information about President Obama and the Senate Democrats’ priorities.

TransCanada filed an application to build the 1,661-mile underground pipeline in September 2008 and passed two lengthy State Department reviews. But the White House bowed to the green lobby and the Environmental Protection Agency and sent the parties back to the drawing board in January. The amendment Thursday would have eliminated the need for a federal permit and addressed environmentalists’ concerns by letting Nebraskans determine the pipeline’s route.

On Thursday Senate Republicans voted unanimously for Keystone, which would bring 830,000 barrels of crude oil daily from Alberta, Canada, to interconnections in Oklahoma and refineries on the Gulf Coast, easing supply constraints and creating thousands of much-needed jobs. Senate Majority Leader Harry Reid sees the world through a different lens: He didn’t want to let Republicans “appease the Tea Party or big oil companies.”

President Obama, of course, would have vetoed the measure had it ever reached his desk. But any such straightforward expression of his own beliefs would have put him on the wrong side of unionized workers the pipeline would have employed or voters worried about the unemployment rate.

Hence the White House phone calls to the Senate this week to on the one hand urge Harry Reid to block the bill, while on the other hand releasing politically vulnerable Democrats to cast a useless vote for the bill.

And so the result was that the Keystone pipeline died yet again, even as Missouri’s Claire McCaskill with her vote is able to claim she’s one Democrat who is for the pipeline. The others are listed nearby. Harder for mere mortals to explain are the no votes of Virginia’s Mark Warner, who said Thursday that he supports Keystone, and Nebraska’s Ben Nelson, whose own Governor backs the pipeline.

Republicans have vowed to introduce the Keystone amendment again and there’s no reason not to do so. With the President and Senate Democrats dancing merrily on every side of the energy debate, it’s always a good time to identify the Keystone Democrats.

8 thoughts on “WSJ: The Keystone Democrats”

  1. Beg pardon…. where have I mentioned anything eco, green or what not? Do not play ad hominems with me…

    The tar sands, combined with the Bakken, are currently producing more oil than the interior of the continent can handle. The midwest is getting oil at a discount that will vanish if that oil is connected to the coast. Are you so naive to think that Gulf Coast refiners are not going to sell their product at world prices? Look at the spread between LLS/Brent and WTI…..

    In fact if you examine the Valero 10-Q you will find that they indeed to export the refined products and benefit from the tax-free export zone that exists on the Gulf Coast… Sounds like a great deal for the average American…

    Canadian and WTI producers are rightly upset because they are not getting fair dollar for their goods… THe mid-west refiners are pocketing the spread…..

    And since you have disdain for eco-nuts, allow me to share my lack of respect for by economically naive fools…

  2. Why wouldn’t the supply increase with the pipeline? You think Canadians are investing billions of dollars as a farce? Doesn’t make sense Mr Flak, Canadians want to make money like everyone else, and their problem is that the tar sands are basically land locked. If they could have a pipeline they could move much more of the oil out to market – and even though it is a lower grade it should effect world markets, and US markets even more.

    I dislike the ingeniousness of you eco-nuts, who make all sorts of Bizarre claims because you don’t like the fact that Canadian oil is more CO2 intensive.

  3. I don’t pretend to have much understanding of the oil market. However, every commodity chemical I’ve been involved with was sold based on the global price and the price was somehow related to supply versus demand. I have difficulty following the arguments that decreasing supply decreases demand and price. We have a president taking credit for increases in oil production after terminating permits and banning exploration in the Gulf. I suppose the ban on Keystone is another move to eliminate and source of supply, thereby increasing supply. Natural gas fracking increased the supply and drastically dropped the price of gas. Increasing the domestic oil supply won’t? Adding another source of supply won’t make the world market less dependent on unstable supplies from the Middle East?

  4. You are assuming that the change in crack spread between whatever is being imported (SA provides relatively little of US supply) and Western Canadian Select will be passed on to the consumer, Given the current difference between midwest and coastal pricing, it looks safe to assume that the refiners will pocket the difference…. Current Brent-WCS spread is about $50 a barrel, but before getting all excited the assays are no where near the same…

    Despite not building a green field refinery, US refinining capacity was recently at a 30 year high…

    Moreover, as I said above, once the WCS is refined on the Gulf Coast, the products will trade at world prices….

  5. One thing that will bring down the consumer cost of gasoline will be a glut in the supply of gasoline. This will of course happen when there is a market-based financial interest in creating that glut of gasoline. Will the Keystone pipeline result in a glut of gasoline? Despite high consumer prices, consumers are still buying what they need to get around. Who wants to invest in making more gasoline that will sell more cheaply? Nobody I know, and the US hasn’t built a new refinery in the last 20 years. Apparently there isn’t sufficient incentive for another one.

    The other thing that could make consumer gasoline prices lower is a decrease in the cost of raw materials, i.e., crude oil. Will Canada’s oil-sand crude be cheaper than Saudi crude? The smart money wants to know.

  6. Riddle me this….
    How does piping low grade tar sands oil to the Gulf Coast where the benchmark rate will be Brent instead of WTI do anything to “secure” America’s energy independence or lower the price of gas? All it will do is remove the glut of land locked oil, hurting the midwestern refiners (an consumers) and benefit the Gulf Coast refiners…
    Any refined products will be priced off of Brent, about $18 barrel more than WTI, and be sold to the highest (read international bidder)…. Guys like Valero will export the stuff taking advantage of tax free zones….
    If anything, the current rail shipments are more labor intensive,

    Crony capitalism at its finest….

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