In President Obama's last press conference of 2014, he once again misstated the elements of the Keystone XL Pipeline Project. Obama continued the canard that the project would only create a nominal number of American jobs, when median estimates are that 20,000 high paying jobs would be created in the two plus years of the construction phase of the pipeline. Additional tens of thousands of permanent jobs would be created in the refineries and the oil by products market for further manufacturing and consumer end use. It's estimated that close to a million jobs throughout the economy could be created as a result of the crude oil flowing into the United States through the XL Pipeline.
Obama
then further pushed the prevarication that the tar sands oil from
Canada would simply pass through America to the Gulf Coast, only to be
exported to the world market and thus would have no impact on gasoline
prices in America. That is an absolute lie and Obama knows it. For
forty years it has been illegal to export crude oil. Now, that is not
to say that refined products can't be exported. However, the State
Department analysis indicated that the results of the Keystone pipeline
will not affect the export trend for refined oil products. It is
estimated that less than 10% of the thousands or so oil based products
refined along the Gulf Coast will be for export, which is consistent
with current export practices.
TransCanada (TC), the
builder/operator of the proposed Keystone XL Pipeline is an oil pipeline
transportation business. TC has no financial ownership in anything,
but the pipeline, as owner/operators. TC does not own any of the tar
sands oil to be shipped through its pipeline to the Gulf Coast. The tar
sands oil is going to be sold to the Gulf Coast refineries in Texas and
Louisiana by the Canadian oil producers. Valero, in Port Arthur,
Texas, is the largest refinery along the Gulf Coast, along with many
others, and the company is the world's largest independent refiner with
other refineries in the United States, Canada and the UK.
Valero
currently processes approximately 3 million barrels of crude oil per
day. Valero is also one of the largest retailers of gasoline in the
United States along with selling to independent gasoline retailers. The
TC pipeline will expand Valero's access to the crude oil supply in
greater volumes economically unachievable by importing with ocean going
oil tankers. This is also true with the other oil refineries along the
Gulf Coast, which will be purchasing the tar sands crude oil from the
Canadian oil producing companies.
President
Obama either has no idea how the world oil market works or how it is
related to the ultimate price of gasoline in the United States. The
Canadian tar sands oil will be principally processed into gasoline and
refined into its many byproducts, by the many oil refineries around the
Gulf Coast. It is yet to be determined where these finished products
will find their end use, but the estimates are that the gasoline will
enter the domestic American market along with the majority of
byproducts.
In the final analysis all the
Canadian tar sand oil products produced in the Gulf Coast refineries
will contribute to the global market supply and will be priced according
to global consumer demand. The more oil products that are produced,
including gasoline, will increase the global supply and thus reduce the
global market price relative to the shrinking global demand. As we have
seen at the gas pump, the world oil products markets are currently
experiencing an oversupply relative to demand, thus bringing down the
price to the consumer, wherever that consumer is located. Cheap and
abundant fossil fuels are what made America the great industrial dynamo
that it is today. If America expects to maintain that same position in
the world economy, it must continue to produce adequate supplies of
crude oil and natural gas to match the demands placed upon our
industrial base.
So, why is Obama doing
everything possible to see to it that the XL Pipeline project never sees
approval? The answer is simple. It does not fit the liberal model of
control of as much of the economy as possible. Warren Buffett, wealthy
supporter of the Obama administration and other things liberal, will
stand to lose money with his ownership interest in the BNSF railroad,
which currently is the primary transportation means for the trickle of
Canadian oil entering the U.S. refining.
The
other liberal constituencies that oppose the XL Pipeline Project, are a
collective assortment of enviro-Nazis groups that oppose all forms of
fossil fuels and the evil producers they consider are working against
Mother Earth. These groups are major financial supporters of the
Democrat Party and have a lot of power in the Obama administration.
Every
analysis and assessment that has been made on the pipeline project has
indicated no significant adverse affects on the environment, while
indicating the economic benefits could be substantial. Obama knows
this, but has chosen to deny the facts in order to satisfy a very
powerful Democrat constituency that funds Democrat candidates.
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Rob Janicki is a retired educator, strong supporter of the 2nd amendment and all around good guy, as well as owner/operator of the website Wired Right and owes me 20 bucks.