Tag: oil pipeline/refining

By Ken Blanchard

If the Keystone XL pipeline project is approved, it may take less time to build the thing than was spent arguing about it. The question stands about where it stood before last year’s election, when the President decided to put off deciding for a bit longer. That is what the State Department concluded in its second”final report.”

There are three coherent arguments against building the pipeline. The primary argument is not against the pipeline itself but against the extraction of tar sands oil in Canada. Getting the oil out of the sand releases more carbon into the atmosphere (about 5-20% more) than conventional wells. If you are concerned about carbon emissions, you will be concerned about that. A second argument is that pipes leak and the Keystone XL pipeline will bisect the US from north to south, crossing many bodies of water both above and below ground. The third is that the pipeline will require the seizure of a lot of private land.

The last item is a red herring. Environmentalists have never been shy about taking control of private property when it is damp enough to qualify as a wetland or is home to some critter of which they have become fond. As for the second, pipelines are essential to the modern economy. The US is already crisscrossed by hundreds of them and we will continue to depend on them for some time to come. The proposed route of the pipeline has been modified to carry it around the eastern edge of Nebraska’s Ogallala Aquifer.

The main argument against Keystone makes sense only if you assume that the oil will not be extracted unless the pipeline is built. Here the new report does the most damage to the opposition. As long as the oil extracted is worth a lot more than it costs to extract it, Canada will find a way to get it to the market. If it doesn’t go south it will go west to be loaded onto ships bound, across very rough seas, to China.

Keystone will bring the oil to American refineries on the Gulf coast. The thousands of jobs created in building it will be temporary, of course; however, right now we need all the jobs we can get. The jobs created to maintain the pipeline and in the refineries will not be temporary.

Likewise the value added to Canadian oil by pumping it across our fruited plains and refining it in our fruitful factories will pour money into the national bank. Some critics of the Keystone product have repeatedly claimed that not a drop of the refined oil will be used in the United States. Instead, all of it will go to China. This argument is fine if all modern economics is wrong. Oil is produced for and sold on a market. So long as there is no domestic demand for the oil then it will be sold abroad. Importing a raw material and adding value by refining it is the primary source of wealth from trade. Trade is to the international economy what the blood stream is to the body. Of course, if the pipeline is not built and the oil goes west, then you can be entirely certain that not a drop of it will contribute to our economy.

If, however, the market should change and a demand for the oil should arise here, then we will have that supply under our control. The pipeline obviously makes the US more energy independent than we would be without it.

Finally, the pipeline will cross western South Dakota. According to the State Department’s Environmental Impact Statement, the pipeline project would add an additional $15.4 million to the annual property tax revenues of nine South Dakota counties. For several western counties, this will amount to a windfall.

Contrary to the dreams of the Greens, the United States is reducing both the energy and the carbon emissions necessary to produce a dollar of GDP just at the time that it is bringing online new sources of fossil fuels. The Keystone pipeline is part of this progress. There is no good reason not to build it.

Editor’s Note: Ken Blanchard is our political columnist from the right. For a left-wing perspective on politics, please look for columns by Cory Heidelberger every other Wednesday on this site.

Dr. Ken Blanchard is a professor of Political Science at Northern State University and writes for the Aberdeen American News and the blog South Dakota Politics.

By Ken Blanchard

One reason to oppose the Keystone XL pipeline across the U.S. is that it will provide a market for tar sands oil. Of course, the delay or cancellation of the pipeline will stop the extraction of tar sands oil only if there is nowhere else for the oil to go.

There is, and it’s China. Canada’s Prime Minister, Stephen Harper, has said his nation will look for opportunities to supply the Asian market for energy, now that President Obama has delayed and perhaps killed the new pipeline.

It is difficult to believe that the Canadians will sit on such a valuable commodity. If the oil doesn’t go south it will go east. This will cut the U.S. out of that market and it will do more damage to more”boreal forest” than Keystone would do. On the bright side, South Dakota landowners won’t have to suffer the indignities of eminent domain and the web of oil pipelines already crisscrossing the U.S. will have one less strand. Perhaps that is a reasonable trade.

Another argument for blocking Keystone XL and tar sands oil extraction is that it will encourage the development of renewable energy sources such as solar power. The theory behind this argument is that renewable sources are viable but more expensive than oil. Constrict the supply of oil and/or make it oil more expensive and investment will shift toward renewable sources. Earth saved.

Well, maybe not. According to Business Week, the market for Chinese-made solar panels is collapsing.

Losses for China’s largest solar manufacturers, including Suntech Power Holdings Co. and JA Solar Holdings Co. may continue through next year as declining shipments prompt them to slash prices and liquidate inventory…

Cell prices have fallen 59 percent since Dec. 27, according to Bloomberg New Energy Finance. Seven Chinese companies reported lower gross margins since yesterday and three said margins have moved into negative territory, an unsustainable level, said Hari Chandra Polavarapu, an analyst at Auriga USA in New York.

The price of solar panels is indeed falling, but not because an economy of scale is making their manufacture cheaper. The price is falling because the demand is falling. The demand for solar panels is largely artificial. It exists because governments and well-heeled homeowners like the idea of renewable energy, not because it makes economic sense.

I am guessing that the Keystone XL pipeline will eventually be built. If it isn’t, that will not stop oil from being extracted or used. It will not suddenly make solar power viable. It will just mean that the U.S. is cut out of the deal.

Dr. Ken Blanchard is a professor of Political Science at Northern State University and writes for the Aberdeen American News and the blog South Dakota Politics.

By Cory Allen Heidelberger

The Occupy Wall Street movement has clearly succeeded in occupying America’s attention. The big question now is when will these protesters succeed in effecting real change?

Perhaps they already have. Last week, the Obama Administration decided to investigate alternative routes for the Keystone XL tar sands oil pipeline. That decision prompted TransCanada to promise to reroute Keystone XL away from the ecologically sensitive Nebraska Sand Hills and the Ogallala Aquifer.

Naomi Klein contends that pipeline opponents couldn’t have won these concessions without Occupy Wall Street’s efforts to”change the conversation.” Perhaps.

But the Occupiers won’t win their broader fight for the 99% without learning from Keystone XL’s opponents. In fighting TransCanada’s tar sands pipeline, folks like Jane Kleeb and Bill McKibben took on big corporate power. Like Occupy Wall Street, they had no unifying big-money partisan network. Unlike Occupy, they rallied thousands of people around a very specific, measurable goal: stop Keystone XL.

Keystone XL opponents staged numerous public protests, but they took their fight to the decision-makers who could hand them victory. From the Nebraska Legislature to the White House, pipeline protesters made clear to the decision-makers that making the wrong decision on Keystone XL would have political consequences.

And the decision-makers listened. Governor Dave Heineman changed his mind and called the Nebraska Legislature into special session to consider new pipeline regulations. President Obama, who had seemed distressingly tone-deaf on Keystone XL, started to pay attention to the protests and send signals about the right priorities. The Obama Administration’s decision last week clearly signaled that Kleeb, McKibben, and the rest of us got our message across. Mission accomplished.

I want Occupy Wall Street to do some good for the 99%. But to do that good, Occupy needs to build on raising voices and awareness to advance clear policy objectives. They need to turn changing the conversation into changing the rules.

Keystone XL protesters won by challenging specific lawmakers on a specific policy goal. They grabbed the political bull by the horns and steered it in a different direction. Occupiers, do the same. You’ve Occupied the streets. Now it’s time to Occupy the decision-makers. Forget Occupying the parks and Wall Street. Occupy the statehouses. Occupy the White House. Occupy Congress.

Cory Allen Heidelberger writes the Madville Times political blog. He grew up on the shores of Lake Herman. He studied math and history at SDSU and information systems at DSU, and is currently teaching French at Spearfish High School. A longtime country dweller, Cory is enjoying “urban” living with his family in Spearfish.

By Vi Waln

As a human being dependent upon Mother Earth for my sustenance, I oppose the building of the Keystone XL pipeline expansion. And as a fellow human you should too. My drinking water comes from the Ogallala Aquifer. I have been drinking this water since I was born. I have buffalo, sheep and horses that also drink this water. Our plants, trees, flowers and vegetables also depend on this water.

In my language we say Mni Wiconi, which translates to Water of Life. Without water there is no life. Within all the ceremonies I attend, water has an essential place. That is, we pray with water in every ceremony we have. And as inhabitants of Mother Earth we depend on water to live. We do not need oil to live. There are other ways to create energy.

Like many of my Lakota-Dakota-Nakota relatives, I am deeply concerned about the world our grandchildren and unborn descendants will be left with when we are gone. Like the ancestors who have gone before us, many of us pray for the descendants who will soon stand in our place.

At the rate we are pillaging Mother Earth there will be nothing left. How will our great grandchildren feel when they learn they have inherited a dead planet? The inhabitants of North America cannot afford the Keystone pipeline expansion. It will surely destroy us. It will destroy everything we are building in terms of culture and spirituality for our children.

The expansion of the Keystone XL pipeline will have to cross our precious drinking water sources, including both the Ogallala Aquifer and the Mni Wiconi water line, along with several streams and rivers. The water which comes through these systems serves many residents currently living on our reservations.

Our water is our life. As a child of Mother Earth, I am against the proposed Keystone pipeline expansion crossing our water sources. I ask you to pray for our water of life to remain pure for our descendants, both yours and mine. Without water we will die.

Vi Waln is Sicangu Lakota and an enrolled member of the Rosebud Sioux Tribe. Her columns were awarded first place in the South Dakota Newspaper Association 2010 contest. She can be reached through email at sicanguscribe@yahoo.com

This Thursday noon the Ramkota in Pierre will host a visit by the U.S. Department of State. Not all of it, of course, but enough of it to get yelled at. The occasion is one in a series of public hearings on the Keystone XL pipeline. This is one of the last steps, I gather, before the Obama Administration decides whether to let the project go ahead.

In my last column I focused on the national security issues involved in the Keystone decision. Those are not the issues that will weigh heaviest with the Administration. The economic and political implications of Keystone XL will likely determine the outcome, so I thought I would offer the Administration a little help.

One of the frequent arguments against KXL is that oil that flows through the pipeline will ultimately be sold abroad rather than consumed in the United States. This is a curious objection. The diesel and gasoline produced by Gulf Coast refineries will surely go wherever there is a market for it and markets are notoriously difficult to predict years in advance. If most or even all of it is shipped off to foreign markets, that would hardly be a bad thing. Importing a raw natural resource, adding value by refining it, and then selling it on the world market, that’s called manufacturing and export. It is exactly what any economy needs to do more of, especially if the gearshift looks to be slipping uncontrollably from neutral into reverse.

The Administration has just proposed another half a trillion dollars in stimulus spending. According to Ron Bailey, the science editor at Reason Magazine, the KXL pipeline is projected to inject $775 billion into the U.S. economy by 2035. That is almost as big as the first stimulus package. In every important way it is much bigger. It will be generated by a real increase in economic production rather than more borrowing against the future.

President Obama acknowledged that his administration had a lot of trouble finding”shovel ready” projects to spend the first stimulus on. KXL will create 10,000 jobs right off the bat and 34,000 by 2014. Altogether Keystone is projected to create 600,000 jobs. To be sure, some of these will be temporary; however, producing as many jobs as quickly as possible is precisely what the Administration says it wants to do. In June the Canadian province of Alberta, from whence the oil will come, produced as many jobs as the entire United States.

Once the pipeline is in operation, it will provide much needed relief to governments in the form of state and local taxes. According to the State Department’s Final Environmental Impact Statement, the pipeline project would add an additional $15.4 million to the annual property tax revenues of nine South Dakota counties. Meade, Lyman, and Perkins counties would see annual revenue increases ranging from 38 to 48%. Tripp County would see an increase of 150%. Haakon and Jones Counties would enjoy three times the annual property tax revenues that they brought in over 2006. The grand prize winner will be Harding County. Its revenues would nearly quadruple, from $876,254 to $3,346,244! Nor is Pierre left out. The state will rake in about eight and a half million from the project development.

This is the kind of economic power that makes Washington’s efforts at stimulus look like sad jokes. I find it hard to believe that President Obama can say no. He will disappoint environmentalists and the anti-corporate left, which may matter come November of next year. On the other hand, he will delight a lot of union workers and organizers. There is no constituency to which he has been more loyal. Finally, if he does cancel the project, he hands his Republican opponent a very rich issue.

I don’t know what the Administration will do. I am sure about what it should do. Building Keystone XL is in the national interest both in terms of security and prosperity. It is also a very good thing for a cash-strapped Rushmore State.

Dr. Ken Blanchard is a professor of Political Science at Northern State University and writes for the Aberdeen American News and the blog South Dakota Politics.

By Dr. Ken Blanchard

Environmentalists don’t like petroleum. They have prevented drilling in the Arctic National Wildlife Reserve for decades. They oppose offshore drilling because it threatens the oceans. They don’t like oil from the Middle East because it is”unethical oil.” It supports dictators. None of those objections, taken separately, is unreasonable.

The proposed Keystone pipeline doesn’t share the same burdens. It would carry about 830,000 barrels of oil a day from tar sands in Alberta to refineries on the Gulf coast. The reindeer seem to be alright with it. There will be leaks, but repair crews can get to them in trucks rather than submersible robots. Canada is an environmentally friendly democracy. Their oil is about as ethical as oil ever gets.

Some Keystone opponents object to the property seizures that will be necessary to complete the project. The pipeline would enter South Dakota at the northwest corner of Harding County and cross the border at the bottom of Tripp County. To be sure, some folks are going to have to give up some of their land and put up with the inconveniences of building a pipeline. That is the kind of thing you have to put up with if you like, say, interstate highways or wetlands protection.

For the foreseeable future, the world economy and our own will continue to run on fossil fuels. Like it or not, we cannot do without oil and bringing more crude to American refineries is a very attractive proposition. Critics of Keystone argue that the oil won’t really benefit the United States because the diesel produced will be sold on the world market.

Even if that’s true, world oil prices have skyrocketed due to increased demand from China and India. Increasing the supply will drive down energy prices and benefit all the world’s economies.

While I do not believe that energy independence is a realistic goal, Keystone will clearly increase America’s energy security. In the event of a disruption in the supply from overseas, Keystone will be one more source of crude that the U.S. can draw on. Oil arriving at refineries we control will be available to us if we really need it.

If Keystone is not built, that doesn’t mean that the oil will remain in Alberta. The Chinese would be only too happy to finance a pipeline running west to supply their growing market. That would not be good for the U.S. Not only would it cost us a critical source of oil, it would substantially decouple Canada’s economy and national interests from the U.S. That would be a disaster. Canada is our closest ally in more ways than one.

The immediate economic benefit to South Dakota is obvious. The benefit to the nation is just as obvious. TransCanada estimates an investment of $20 billion, with 13,000 new jobs and 118,000 spinoff jobs created. This last month, the U.S. economy produced a net job gain of zero. Unless hatred of oil is the only thing you care about, the Keystone pipeline is a no brainer.

Dr. Ken Blanchard is a professor of Political Science at Northern State University and writes for the Aberdeen American News and the blog South Dakota Politics.