The Keystone XL
An informal note that I sent to Don. This and $1.89 will get you a cup of coffee at our local Starbucks:
The Keystone XL is completely in the political arena, from my point of view.
Canadian oil is getting to the coast; the Keystone is not absolutely required. I'm not even sure if TransCanada would be quick to build it -- I don't recall if you saw the recent new cost estimate -- but it's up to $7.5 billion, if I recall.
Be that as it may, politically it's a huge, huge deal. If Obama were to approve it before the December 6, 2014, Louisiana election, he would effectively be throwing Tom Steyer under the bus. Politics is very, very cold, and I can hear Obama telling Steyer, who spent billions (okay, maybe just hundreds of millions) in the election, that "Steyer, you did not deliver -- we lost 8 Senate seats -- you did not deliver, and I'm approving the Keystone." I can't believe Obama would do that, but he would be throwing Steyer and his basket of Hollywood fruits and nuts under the bus.
Second, if Obama approves the Keystone, it makes him look incredibly inconsistent -- he has a war on coal which his democratic senators don't want (West Virginia, for example) and then he turns around and gives Canada what they want -- and both Canadian oil and US coal are about equal in CO2 emissions.
Third, if Obama approves the Keystone, it pretty much ends the debate on pipelines. Sure, the folks in Minnesota, Iowa, and Nebraska will hold out for as much money as they can get for approving the pipelines, but the political debate regarding pipelines is over if the Keystone is approved. It completely takes the wind out of the environmentalists' sails with regard to pipelines. And with all the rail congestion and (history of) spills/derailments, the average American knows pipelines are safer.
So, for me, the Keystone XL is not an investment issue, a Bakken issue, or even a "real" issue -- it is simply political theater.
If both the House and the Senate unanimously approve the Keystone XL BEFORE the new Congress is sworn in, it will be very, very interesting to see what POTUS Obama does. And he really only has one "window of opportunity" in which to approve it. If he is going to approve it, he needs to approve it before the Landrieu election in Louisiana; after the new Congress is sworn in, if he were to approve it, he would gain nothing politically from so doing. Possibly a compromise to approve the Keystone XL in exchange for more war-on-coal, but that's about it, but even if he goes that route, maximum advantage would be before the Louisiana election.By the way, it's my understanding that Mr Rick Santelli (CNBC) noted that for the past six years Harry Reid did not allow the Keystone XL to even be debated in the Senate chambers, much less bring a vote on the issue; and, now, barely a week after the midterm elections, Reid has brought the bill to the floor, and (apparently) is supporting a unanimous vote in favor.
I could really, really be wrong on all of this but that's what I'm hearing. If it's important to you, go to the source. I'm simply relaxing and opining. And drinking another cup of coffee. Now that out-of-town family members are back out-of-town.