Free Markets, Free People

How Obama’s Keystone XL tantrum will cost the US

Not that President Obama will much care. 

As you know, if you’ve followed the news, a few months back, President Obama stopped the building of a critical oil pipeline from Canada’s oil sands in a fit of pique at the GOP for demanding a decision sooner rather than later.  His excuse was it hadn’t been studied enough even though his own State Department had unofficially announced they were satisfied with Trans Canada’s application and environmental studies and prepared to okay the project.

A huge outcry ensued and as he usually does, Obama tried to blame his decision on someone else.  The result of his decision, of course, was to further delay the transport of up to 800,000 barrels a day of crude oil from Alberta’s oil sands to our Gulf Coast refineries.  He essentially turned down an increase in safe and secure oil that is strategic to our economic growth and national security.

But it has had even more profound effect for the long term.  Most people are pretty sure that the pipeline will eventually be built.  However the sweet deal it offered us prior to the President’s turn down is no longer available.  It is because the refusal pointed out that Canada couldn’t depend on the US to be a reliable trading partner:

In a public one-on-one interview here with Jane Harman, head of the Wilson Centre think-tank, [Canada’s Prime Minister Stephen] Harper said Obama’s rejection of the controversial pipeline — even temporarily — stressed Canada’s need to find other buyers for oilsands crude.

And that wouldn’t change even if the president’s mind did.

“Look, the very fact that a ‘no’ could even be said underscores to our country that we must diversify our energy export markets,” Harper told Harman in front of a live audience of businesspeople, scholars, diplomats, and journalists.

“We cannot be, as a country, in a situation where our one and, in many cases, only energy partner could say no to our energy products. We just cannot be in that position.”

Of course there’s no particular problem finding new customers.  China, naturally, was waiting in the wings for us to shoot ourselves in the foot and when we obliged them, they stepped right in.

That, of course, has another effect:

Harper also told Harman that Canada has been selling its oil to the United States at a discounted price.

So not only will America be able to buy less Canadian oil even if Keystone is eventually approved, the U.S. will also have to pay more for it because the market for oilsands crude will be more competitive.

That’s right, we get less and it will cost more. 

We have taken a significant price hit by virtue of the fact that we are a captive supplier and that just does not make sense in terms of the broader interests of the Canadian economy," Harper said. "We’re still going to be a major supplier of the United States. It will be a long time, if ever, before the United States isn’t our number one export market, but for us the United States cannot be our only export market.

"That is not in our interest, either commercially or in terms of pricing."

Congratulations Mr. President, with your childish fit of pique you’ve managed to again do something that will help achieve your goal of seeing energy prices “skyrocket”.

And the people you profess to be looking out for, the poor and middle class, are those who will pay the most for your tantrum.

~McQ

Twitter: @McQandO

Tweet about this on TwitterShare on FacebookShare on Google+Share on TumblrShare on StumbleUponShare on RedditPin on PinterestEmail this to someone

22 Responses to How Obama’s Keystone XL tantrum will cost the US

  • That’s right, we get less and it will cost more.
    —————————————————————————————————–
    So, win-win in the Obamabanana Republic. Excellent… I’ll send a special “thank you” in November.

  • Don’t you understand? The future is with things like the Chevy Volt and Solyndra. /bs

    • @tkc882 And another solar company bit the dust yesterday….. the energy of the future will be ‘dark’ energy.

  • Of course Obama will care. In fact, he’ll be very happy about it. Because then they can continue to demonize “big oil” as the cause of all our problems (unless the designated enemy is “the rich” or “big insurance” or whatever other punching bag du jour these monsters need to invent to keep the hate machine going)

  • In case you haven’t heard, the oil from the tar sand is destined for the world market—and China in particular—and not for the US, since demand is not high enough in this country. Also, there’s a question as to how many jobs, and for how long in duration, will be produced. Please, tell the whole story, and not just the part the appeals to your conservative audience.

    • @tadcf Please read the post, you putz. Not just the part with the monosyllables. That must be some nice sinecure you got there, being able to snort at job creation. Or is it more of a blowing kinda thang…???

    • @tadcf — A World Market doesn’t target ANY particular target.

    • @tadcf Any openings? What, one post a day at various sites in defense of the defenseless? ALL the oil, even the stuff we get here, is destined for the world market. Why don’t you try a little of that truth stuff too.
      Staying away from the Supreme Court threats today?

      • @looker That is the term de jure from the moonbattery. They chant it like a talisman, and with as much rational validity. “Global market”. Hey, it has an economenty sound to it…!!!

    • @tadcf Why don’t you reprise your statement that we’re exporting ‘oil’. We’re exporting refined gasoline, and where do you think Canada might send that gasoline for refining? There’s a difference between exporting crude, and exporting refined product, the demand for oil is not the same as the demand for gasoline. You yourself have waltzed in here a couple of times to remind us all we’re exporting gasoline (as if it’s government property, turned over to the oil companies, who are maliciously exporting it.). So, yes the demand for GASOLINE has declined in the US thanks to the messiah’s various ongoing finger pokes into the eyes of the American economy, but the demand for GAS in the world is obviously HIGH since we’re exporting it, and as you yourself posted is now our number 1 export. And how does one CREATE gasoline? Well, it comes from OIL, and a lot of that OIL comes from CANADIAN TAR SANDS. And our refineries could refine MORE if we had more oil to create gasoline from.
      ===================================================================
      So, back to that word you used, truth, why don’t you get hold of some. You can’t have it both ways that we’re exporting gas (which you view as BAAAAAAAD)yet our demand for OIL is down. Get your talking points masters to apply some critical thought before they issue your daily briefing will you?

    • @tadcf Why don’t you reprise your statement that we’re exporting ‘oil’. We’re exporting refined gasoline, and where do you think Canada might send that crude oil for refining? There’s a difference between exporting crude, and exporting refined product, the demand for oil is not the same as the demand for gasoline. You yourself have waltzed in here a couple of times to remind us all we’re exporting gasoline (as if it’s government property, turned over to the oil companies, who are maliciously exporting it.). So, yes the demand for GASOLINE has declined in the US thanks to the messiah’s various ongoing finger pokes into the eyes of the American economy, but the demand for GAS in the world is obviously HIGH since we’re exporting it, and as you yourself posted is now our number 1 export. And how does one CREATE gasoline? Well, it comes from OIL, and a lot of that OIL comes from CANADIAN TAR SANDS. And our refineries could refine MORE if we had more oil to create gasoline from. ==================================================================So, back to that word you used, truth, why don’t you get hold of some. You can’t have it both ways that we’re exporting gas (which you view as BAAAAAAAD)yet our demand for OIL is down. Get your talking points masters to apply some critical thought before they issue your daily briefing will you?

    • @tadcf
      ” the oil from the tar sand is destined for the world market”————-
      Aw, shucks. We shure could use more oil. Say, how can we become part of that world market thingee?

    • @tadcf In case you haven’t heard, and apparently read because it is right there in the post, Canada sold oil to the US at a discount.

      Miss that, did we? Free advice …. read, then type.

      • @McQandO But his role is to throw our the moonbattery talking points his punk-meisters have packed into him. Reading…thinking…not so much…

  • Vice President Joe Biden acknowledged that cutting government subsidies could lower tuition costs, but said it would be against the national interest to do so.

    He argued that decreasing “government intervention” in education would harm the nation by forcing students out of college, despite the decrease in costs.
    ————————————————————————————————-
    Genius.

    • @Ragspierre The same guy who, with $4.00+ a gallon gas, thinks “our energy policy is the best it’s ever been”.

  • Bruce,

    Unfortunately, Obama’s Keystone XL decision is only one in a long string of misguided energy policies. Instead of acknowledging that our country and economy run on oil and natural gas — and will for the foreseeable future — the president is pursuing an off-oil policy: delaying or canceling development on federal areas onshore and offshore, proposing punitive tax increases on America’s energy producers, threatening new layers of unnecessary regulation and rejecting key components like the Keystone XL pipeline. We recently produced an infographic that shows how the administration’s oil strategy has contributed to rising fuel costs. Take a look when you have a chance: http://energytomorrow.org/blog/the-presidents-actions-and-rising-prices/#/type/all

    Mark, EnergyTomorrow.org