A Q&A On The Keystone In The LA Times

Before we get to the LA Times Q&A on the Keystone, a reminder of the Q&A with TED book author, same subject, just a couple of days ago.

Now, the LA Times Q&A on the Keystone. Assuming one a) understands this was printed in the LA Times, and assuming one  b) has half a brain working,  one can only see this Q&A as another trial balloon which provides more cover for President Obama if he should decide in favor of common sense.

These are the main points from the article:

a) the activist environmentalists originally objected to the pipeline because of the route through Nebraska. That route has been changed; the Nebraskans now support the pipeline. The activists are still concerned. The State Department: "any spill into the aquifer from the pipeline would not lead to extensive contamination."

b) once the route was changed to accommodate the activist environmentalists, and approved by the Nebraskan voters, the activist environmentalists moved the goal posts. They now contend the oil moved by the Keystone pipeline would contribute to global warming. In fact, "a recent study showed that development of all the Canadian oil sands would add an almost undetectable amount to global temperatures. That's because anything emitted by oil from the Keystone will be overshadowed by coal plants in China which is building, on average, one a day. Obviously, all of the Canadian oil sands will not be developed, and only a portion of what is developed will flow down the Keystone pipeline.

c) Will it provide any jobs? Yes.

d) Will it offer an alternative to heavy oil coming from a capricious and unreliable country unfriendly to the United States, i.e., Venezuela? Yes.

e) Will it be in the best interests of both the United States and its closest ally, Canada? Yes.

f) Will Canadian oil get here even if the Keystone XL is not built? Yes, it already is. By rail and existing pipeline. A competitor to the Keystone XL already has plans on the drawing board to increase imports through existing pipeline (new permits not needed).

g) Will the price of gasoline drop if the Keystone XL is built? Probably not.

Questions not asked:

a) Is heavy oil important to the economy of the US? Very.

b) Who are the primary financial backers  supporting the activist environmentalists on this issue? I don't know.

c) Who will benefit if the Keystone XL is killed by the president for the third time? Rail (primarily Warren Buffett, who owns the Bakken railroad, the BNSF) and Enbridge (a Canadian competitor).

d)  Will the price of refined petroleum products go up if the Keystone XL is not built? All things being equal, yes.

As for me, I am terribly conflicted. When I first mentioned the Keystone XL at the blog a couple years ago, I posted it because there wasn't much else in the news. I never expected the Keystone XL to become such a big story. I had no dog in the fight when the issue was first raised. I now have a big dog in this fight. For me, personally (or better said, for my estate) it will be advantageous to have the Keystone XL killed. I own shares in (at least) three companies that will benefit if the Keystone XL is killed.

However, out of common sense, and a sense of fairness; a believer in free enterprise; and, as a rational thinker, I hope the Keystone XL is approved.

So, I guess at the end of the day, I will root for the president to approve it, but realizing I will come out ahead either way.