Tag: "keystone xl"

Senate Energy Policy Leaves Out Oil and Highway Funding

The focus of the Energy Policy Modernization Act of 2015 includes energy efficiency and conservation, protecting the electric grid and speeding up the application process for liquid natural gas refineries. The bill includes:

  • The secretary of the Energy Department to issue a final decision on applications to export liquefied natural gas within 45 days after projects have won approval from the Federal Energy Regulatory Commission.
  • The Strategic Petroleum Reserve, a stockpile of nearly 700 million barrels of oil, should be used only in emergencies — while there are legislative efforts to sell off some of that oil to help pay for surface transportation funding.

The most recent senate energy bill failed to address some of the most important energy issues currently facing the nation. The bill avoided such issues as:

  • The ban on exporting crude oil.
  • Keystone XL pipeline.
  • Federal gas tax reform.
  • The failure to fund our highway system.
  • Renewable Fuel Standard reform.

U.S. energy policy that includes natural gas, but leaves out oil, is not real energy policy. Protecting the electric grid and leaving out critical funding for the highway system, addresses half of our most pressing infrastructure needs.

Local Support for Keystone XL, Despite Political Affiliation

The Keystone XL Pipeline continues to remain in a locked up battle mainly between political parties. However, a recent study suggests that while politics prevents the pipeline from completion, local support shows a different picture. Those that live close to the proposed pipeline route are in favor of the project despite their political party affiliation. A possible reason for this is the greater media attention in localized areas that focus on jobs and economic benefits.

TransCanada has run into a new problem while working on alternative to the Keystone XL pipeline. Native groups in Canada are blocking most development in their territory, at least without consent and benefits directly to those nations. Until they are on board with developments like the proposed pipeline to the Pacific coast, these local groups will stall an alternative to the Keystone XL.


U.S. Energy Infrastructure Still Lacking

Energy booms, whether from oil or gas, will continue as both technology develops and more resources are discovered. However, each energy boom puts a strain on our existing energy infrastructure. For instance, oil can be transported by truck, ship, rail and pipeline. Pipeline is the safest and most reliable way to transport oil. Even with 185,000 miles of liquid petroleum pipeline across the United States, there is just not enough to transport the huge volume in the current boom. The lack of pipeline has increased transportation by rail and rail accidents during this time.oil_by_rail

  • The recent increase in transportation of oil by rail has increased the number of rail accidents.
  • In 2014, 70 percent of petroleum products and crude oil were shipped by pipeline, while 3 percent was shipped by rail.
  • A recent study by Fraser affirms their safety by reporting transporting oil by pipeline is 30 times less harmful than by train.

More and more oil is extracted every day and our storage capacity is overflowing. Two things need to happen that will greatly alleviate this situation. First, more pipelines are needed to transport all of this new oil. Second, all of this oil needs a place to go. Building more storage capacity only temporarily alleviates the problem. The crude oil export ban needs to be lifted so that the oil can get out of the over capacity storage units and enter the energy market.

Oil and Gas v. Green Jobs

On February 24th, President Obama vetoed the Keystone Pipeline, citing that such a project is “not in the national interest” ― and instead the President has been a vocal proponent of creating green jobs in alternative energies. However, it is vital to analyze the quality and effect of these jobs. When comparing the jobs created by the oil and gas industry to the emerging green energy industry, what considerations should be made?

The first and most simple is salaries:

Oil Gas vs Green jobs

It doesn’t take a scientist to see that typically, members of the oil and gas industry are paid much more than their counterparts in green-collar jobs. It’s extremely important to note that above “Oil & Gas Financial Analyst,” jobs are no longer directly comparable, because they’re more specialized blue-collar jobs.

Ironically, apart from being paid less than other jobs in oil and gas, every single blue-collar job in the green energy sector required an undergraduate degree (except for “Wind Turbine Service Technician,” which only required work experience or specialized certifications). From a purely financial point of view, it’s a significant investment with a lower return. Oil and gas lend greater support to unskilled, blue-collar workers. What is this higher pay in oil and gas attributed to? Is the oil and gas industry simply more lucrative? Conventional wisdom may lend itself to this idea, but there is also another component in the equation.

Industry reports from the Bureau of Labor Statistics (BLS) seem to point to a high risk premium that is implicitly included in the pay for oil and gas workers. The Survey of Occupational Injuries and Illnesses by BLS shows that workers in the oil, gas and mining industry have a probability of nonfatal injuries that can be as high as 36 percent, particularly in smaller companies. This statistic, translates into a higher than average probability of injury, disability, chronic illness and death for workers within the sector. Employees in the oil and gas industry also report lower levels of job satisfaction. From a quantitative perspective, the decision to be for or against nonrenewable energy is clear. From a qualitative perspective, we should at least give this question pause.

The Effect of President Obama’s Keystone XL Veto

President Obama officially vetoed the Keystone XL pipeline project after bipartisan votes by both the House and Senate landed the bill on his desk. Without the Senate to block legislation from getting to his desk, the president is now planning to veto many bills that pass both houses. Veto-proof coalitions are now needed to pass legislation that provides benefits like the Keystone XL project.

The entire Keystone pipeline system is almost complete, the fourth and final phase of the system is known as Keystone XL. The Keystone XL Pipeline is a proposed 1,179-mile (1,897 km), 36-inch-diameter crude oil pipeline beginning in Hardisty, Alberta and extending south to Steele City, Nebraska. This pipeline is a critical infrastructure project for the energy security of the United States and for strengthening the American economy. The Keystone XL pipeline would have the capacity to transport 830,000 barrels of oil per day to Gulf Coast and Midwest refineries.

Approving the estimated $5.3 billion Keystone XL project would create approximately 9,000 construction jobs. When combined with the southern portion of the Keystone pipeline (the Gulf Coast Project), it is estimated that the total $7 billion pipeline could:

  • Create 13,000 construction and 7,000 manufacturing jobs.
  • Add $20 billion to U.S. GDP.
  • Add $5 billion in taxes revenue to local counties.
  • Generate as much as $5.2 billion in property tax revenue for Montana, South Dakota, Kansas, Oklahoma, Nebraska, and Texas collectively.
  • Over 2.6 million miles of pipeline in the United States that deliver both liquid petroleum products and natural gas, while the Keystone XL portion of the Keystone pipeline is less than 1,200 miles long.
  • The Canadian Energy Pipeline Association predicts that pipeline projects are worth $1.298 trillion dollars to the Canadian economy and $15.52 billion dollars in additional salaries to its citizens.
  • The U.S. State Department reported an increase of 42,000 jobs during the construction process, and roughly 118,000 jobs to maintain the pipeline and the refineries.
  • 70 percent of petroleum and crude oil are currently shipped by pipeline, which in recent years has proven to be safer than shipping oil by rail.

A recent study by the Fraser Institute affirms their safety by reporting pipeline accidents are a staggering 30 times less harmful than by train. According to a study by Southern Methodist University’s Maguire Energy Institute, there are substantial economic benefits with the TransCanada Keystone Pipeline System.

The United States’ State Department issued a multi-thousand page report which took years of research, compilation and coordination to produce which concluded definitively that the Keystone pipeline would be safe ― it would have “no significant impacts.”

Keep Oil Prices Down by Passing Keystone XL

The Tampa Bay Times conducted a fact check on some statements made by Senator John Thune of South Dakota on Sunday. The fact check covered two main points:

―President Barack Obama’s own administration has done five environmental impact assessments of the Keystone XL pipeline

According to the fact check, the U.S. State Department actually had one report on the pipeline that included several drafts and a major revised version that considered a more environmentally sound route change in the pipeline.

―All of which have said it would have a minimum impact on the environment

While the State Department study found that the pipeline would have minimal impact on the environment, the Environmental Protection Agency worries of a greater impact from the pipeline’s greenhouse gas emissions than the study found.

The new Republican leadership in the Senate plans to have a friendly, open amendment process with Democrats with a goal of passing the pipeline bill. The bill is expected to have enough votes to be filibuster proof, and if not enough to override a presidential veto, enough to force the president to wield his veto pen and take a position on this controversial issue. The claim that gas prices are too low for the new addition to Keystone to have a positive economic impact does not consider that the pipeline will take time to build (and time to get approved) and by then, prices could be up even to record high prices.

Fast-Track Keystone XL Plan Doomed to Fail

Coordination by the House and Senate to quickly pass the Keystone XL pipeline was doomed to fail last week. The coordination was awkward, to say the least, the House easily passed the approval of the pipeline, yet again, while the Senate had an entirely different situation.

The Senate never had the votes to pass the approval process. However, one senator’s seat was threatened in a runoff. Senator Mary Landrieu’s support of the pipeline and its approval in the Senate, could have been enough to help her win the runoff election. Harry Reid called for the vote and said that they had the 60 votes for approval. They miscounted. Now Landrieu’s seat is really in jeopardy. If the vote had been called months earlier, the votes could have been mustered to have more than enough for approval of the pipeline.

After a wasted effort due to a miscalculation, the pipeline will still have enough votes in the Senate next year from the election. If the opponents of the Keystone XL pipeline come to terms with the economic benefits of the pipeline, they may understand how much their fears were over exaggerated.

Power Politics: The Battle Over Keystone

The Keystone XL Pipeline got its vote, but not the results supporters were looking for. Supporters had renewed their hopes for passage of the pipeline after the resounding Republican victory in the midterm elections. Despite the President’s continued opposition to the project, the House of Representatives had remained staunchly pro-Keystone; Friday’s 252 to 161 passage of the pipeline marked the House’s ninth approval of the project.

Thou largely decried as an attempt to give embattled Democratic Senator Mary Landrieu a political bump ahead of her December 6th runoff election, the Senate went ahead with the vote on Keystone XL. It was close ― Keystone XL only failed by one vote.

What does this mean for the future of the pipeline? Is Keystone XL dead?

Not quite, says Senator John Cornyn of Texas.

Even before the vote, Cornyn was optimistic. “I have no real doubt that the president will veto it eventually,” Cornyn told MSNBC. “So we will come back at it next year and keep coming back until we get a solution.”

If Keystone XL comes up again in the next Congress, we could see different results. The House obviously already has ― and should maintain ― the majority needed to pass Keystone XL again. The Huffington Post predicts that the upcoming Senate should have at least 61 votes in favor of the pipeline. Given these results, it seems like the bill may finally make it past both chambers.

Just one question remains: With rumors still circulating that Obama will veto Keystone if it passes, can both houses wrangle the two-thirds support needed to override a presidential veto?

I guess we’ll have to wait and see.

Congress Fast-Tracks Keystone XL Pipeline

A very overly political move in both chambers of Congress is happening right now. The House of Representatives pushed forward the approval of the Keystone XL pipeline last week. The Senate is planning to vote tomorrow on whether or not to approve the pipeline. President Obama has given many indications that he will veto the bill when he gets it. At this moment, both houses lack the two-thirds majority to override a presidential veto, at least during the rest of this year and the lame-duck session.

However, Senate Majority Leader Reid plans to go forward with the vote to allow the struggling incumbent senator Mary Landrieu from Louisiana, a chance to vote for the approval of the pipeline and boost her numbers in the runoff election for her Senate seat. Hopefully next year will be a different story for Keystone XL pipeline. Maybe one which does not involve such silly political games and one that shows a rigorous debate on approval of the pipeline and a decent chance to pass it without the threat of a presidential veto.

Renewed Hope for Keystone XL Post Mid-Terms

The election results from last night changed control of the senate to the GOP again. For the first time since 2006, party control of the upper chamber has changed hands. Many bills that could get through the House but stalled in the Senate now have a second chance at passage. The Keystone XL pipeline did not have enough votes in the Senate to override a presidential veto until now. Before last night’s election, at least 57 senators could be counted on to support the pipeline. After last night, the new Senate chamber will have at least 61 votes in favor of the pipeline. This is a clear majority that was needed for the pipeline’s approval.

Keystone XL pipeline election results:

  • All 57 seats of those in support of the pipeline were held last night.
  • Anti-pipeline Senator Mark Udall of Colorado was defeated.
  • Anti-pipeline Senator Jay Rockefeller was defeated.
  • Anti-pipeline Senator Tom Harkin of Iowa retired and replaced by a supporter of the pipeline.
  • Senator Tim Johnson of South Dakota retired and replaced by a stronger supporter of Keystone XL.

Despite the State Department’s positive review of the proposed pipeline earlier this year, President Obama remained opposed. The House remains pro-pipeline and the Senate could have the votes to stop any presidential veto of the Keystone XL pipeline and any other proposed pipelines that would greatly benefit the United States as well as many other countries.