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Sunday, February 17, 2013

A New Poll: Was The Policy Decision to Kill the Keystone XL the Number One Reason For The All-Time High Gasoline Prices We Are Now Seeing?

Time for a new poll.

First the results of the current poll.

The question: Within a few months of production, even if gas is flared, mineral rights owners are paid for the flared gas at market rates (in ND).
  • Yes: 23%
  • No: 77%
I believe the "better" answer is "no." If I recall, North Dakota allows a 12-month grace period before requiring reimbursement for flared gas to be paid, and the state can grant a waiver extending it another six months. However, by 18 months, royalty owners should see reimbursement from flared gas. This is my understanding; not necessarily absolutely accurate. For most respondents, "18 months" is a bit more than "within a few months."

Now the new poll.

Long-time readers know that I never intended to post articles about the Keystone XL. When I first started the blog, I limited my oil and gas posts to the Bakken. But because of reader interest, I posted my first Keystone XL post a long, long time ago, saying I had no dog in that fight and had no interest in that story.

However, over time, it became a much bigger story than I thought it would ever become, and it has become a regular feature of the blog for any number of reasons.

Long-time readers also know that I have opined over and over the killing of the Keystone XL will not affect the price of gasoline in the short term (2012 - 2016) in the United States. There is a glut of US shale oil and plenty of global oil, making the Keystone XL unimportant at this time. At least that's what I've been saying for the past two years.

I am now convinced that I am very, very wrong.

I will post later why I think the policy decision to kill the Keystone is directly responsible for the historically highest gasoline prices on record for this time of the year. But before I do, a new poll.

Was the policy decision to kill the Keystone XL the number one reason for the all-time high gasoline prices we are now seeing, as reported by the Christian Science Monitor?

[Added, February 17, 2012, 12:48: "Obama rejects Keystone project from Canada to Texas," USA Today, January 18, 2012.
Russ Girling, president of TransCanada, the pipeline's builder, said the company would reapply for permitting and asked for the application to be processed in time to get the pipeline online by 2014.
Obama said House Republicans forced his decision by including a provision in last month's legislation for a short-term extension to the payroll tax cut that required him to either issue a permit to allow the 1,700-mile pipeline to be built or explain why it was not in the national interest by Feb. 21.]

7 comments:

  1. I dont understand your poll. I am 95% convinced it will be built against the wishes of oil producers who are tied to selling their oil through Cushing since there is already a glut there. More cheap Canadian oil will depress prices further.

    ReplyDelete
    Replies
    1. First: read this Christian Science Monitor story:
      http://www.csmonitor.com/Business/2013/0211/Gas-prices-hit-a-historic-high-What-s-driving-them-up?nav=87-frontpage-entryNineItem

      I have consistently suggested that killing the Keystone XL 1.0 did not and would not have any effect on the price of gasoline.

      I now feel I am wrong. Very wrong.

      So, I am simply asking if killing the Keystone was, indeed, responsible for the high gasoline prices we see today.

      Again: two facts -- a) the original Keystone XL route/permit was not approved; the Keystone XL is still not built; and, b) historically high-gasoline prices for this time of year. Is there a relationship between these two data points. Perhaps not. Perhaps.

      I purposely did not give options other than "yes"/"no" -- sort of like high school/debate in which one is given a a topic and then tasked to argue "for" or "against."

      Delete
    2. Someone noted that the linked article to CS Monitor did not mention the Keystone. That is correct. The purpose of the link was to provide the basis for my statement regarding high price of gasoline, this time of year.

      But, yes, the CS Monitor did not mention the Keystone XL.

      Delete
  2. Bruce,
    Regarding your poll on flared gas.
    We have been receiving royality checks since june 2010. Each well is connected to a pipeline. When the pipeline is shut down or overload the operators flare the extra gas not being accepted into the pipeline. Never once have we been paid for this flared gas. I know several others that have the same situation.

    ReplyDelete
    Replies
    1. If you do a google search "Royalty or Compensation for Oil and Gas Loss" one will find a BLM pdf which provides exceptions when royalties do not have to be paid. This is a BLM pdf and I assume similar exceptions exist at the state level.

      Delete
  3. Earlier today as I was turning onto Masonic to cross the Golden Gate Park Panhandle - on my way to get a banh mi at Cafe Bunn Mi on Clement - a couple hundred people were streaming across the Avenue blocking my way. A great many of the folks were a throwback to the psychedelic, summer of love times of 40 - 45 years ago. Ok, what can I expect, this is San Francisco and I'm in the Haight.

    Now I see where they came from; see this link:

    http://www.sfgate.com/science/article/Thousands-protest-Keystone-XL-pipeline-4286432.php

    Bet I know how they would vote on your poll. California, love the weather, the scenery and the food, but the people are whacko's along with their policies.

    Love your blog.

    ReplyDelete
    Replies
    1. Thank you for your kind comments and taking time to write.

      I hear gasoline is approaching $5.00/gallon in some parts of California; well over $4.00 in south Los Angeles.

      Delete

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