President Obama “welcomes” son of Keystone

We all know that earlier this year the President killed the proposed Keystone pipeline that would bring oil from Canada to the United States.  However, he seems to be on board with a portion of it…from Cushing, Oklahoma to Port Arthur, Texas.

Cushing has a glut of oil.  This oil comes predominately from North Dakota and Canada.  In the case of Canadian oil, it comes through another pipeline.  Cushing also has refineries, but not enough to refine all of the oil it has sitting in storage.  In fact, it has so much oil that the price of oil sitting there is about $15 a barrel lower than the price of oil sold on the international markets.

This is oil in need of a refinery. 

Meanwhile, we have refineries in Texas that have to use the higher priced oil from the Arab states to produce our gasoline because the oil in Oklahoma can’t get to those Texas refineries.  Think about that for a moment…we have oil in this country that can’t be refined into gasoline because we don’t have enough refineries, and, we have not let the oil we have get to the few refineries we have.

Yesterday, TransCanada Corp., the company that sought to build the Keystone pipeline announce that it would build only that piece of it’s proposed pipeline from Cushing, Oklahoma to Port Arthur, Texas.  At least that way, cheaper oil would get to refineries.  As this portion of the pipeline doesn’t cross international boundaries, the President’s approval is not necessary.

And, as expected,

Friends of the Earth called the White House statement in support of TransCanada’s decision ‘an alarming about-face.’

Think about the brilliance of the President’s actions.  He appeased the “greenies” to get votes, but annoyed the unions when he killed the complete pipeline.  He appeased the unions to get votes, but annoyed the “‘greenies” when he “welcomed” a portion of the pipeline.

And, why didn’t this administration come up with this solution earlier?

Once again, it takes government to make the problem, and private industry to solve it.

21 replies
    • kateinmaine
      kateinmaine says:

      i’ve got some land–let’s build a refinery in maine.? oh, wait–efficiencies in refining are contingent on receiving and shipping product–therefore need to be on a pipeline or a deep water port on the coast.? hmmm.? unfortunately, my land in the mountains does not meet that criteria.? bet someone else has land that meets it, though.
      nimbyism is not part of the true conservative lexicon, unlike the kennedy ‘preserve the view war’ against windmills in nantucket sound.? oh, wait–it was also about not having obstacles for kennedy progeny to fatally crash into as well. . .? details. . .

  1. Tim-in-Alabama
    Tim-in-Alabama says:

    Obama supports this as long as it does not negatively impact his “investment” in Brazilian oil exploration, drilling and refining.

  2. crystal4
    crystal4 says:

    “Cushing has a glut of oil.”
    Yeah, it’s being piped to TX to be exported.
    Domestic oil production is at an 8 year high and our gas prices are going up.? So much for “drill baby, drill”. (The mantra for more big oil profits..doesn’t help us)

    • SoundOffSister
      SoundOffSister says:

      Domestic oil production is up, but it can’t get to the refineries.? Gasoline produced from oil that costs say $85 a barrel (that sitting in Cushing) costs less than gasoline produced from oil that costs $100 a barrel (that imported from foreign countries).

  3. sammy22
    sammy22 says:

    Just for info: the refineries on the Gulf Coast are running at over 91% capacity. Those in the middle of the country including Oklahoma are running at over 92% capacity. I’d say there is not much room to increase refining. And why would one? “sell” oil acquired at $85/barrel (assuming that it was true) instead of at the going world price of $100 plus/barrel? A good businessman would take the higher price.

    • Dimsdale
      Dimsdale says:

      Well, one could add more refineries operating at 90+% capacity.? And don’t forget: these aren’t the newer more efficient refineries, since we can’t build those.? Perhaps the oil it Cushing was already purchased at the going rate at the time?? Doesn’t one make more money off the refined products vs. the crude stock?? Just asking, as I don’t know.?? Good question though.

  4. sammy22
    sammy22 says:

    I still cannot understand the notion that oil produced domestically would be PRICED lower than oil produced anywhere else in the world.? Why would any oil producer sell its oil at a lower price than what the market sets?

    • SoundOffSister
      SoundOffSister says:

      Let me suggest a reason.? The oil produced in this country can only economically get to refineries via a pipeline.? We currently do not have the pipeline capacity to move that oil to our refineries in Texas.? Meanwhile, foreign oil can be shipped via super tankers, and there?is more than enough capacity to do so. The domestic oil producers are now faced with 2 choices.? Stop pumping oil, or sell at a lower price.? They have chosen the latter.

  5. crystal4
    crystal4 says:

    “The government said that inventories of crude oil rose by 4.2 million barrels last week. Analysts were expecting an increase of just 1 million barrels.” AP
    Supply is up, demand down as people are now driving less. When will congress crack down on speculators?

    • SoundOffSister
      SoundOffSister says:

      You have ansered your own question, crystal.? Large inventories of crude oil are meaningless without the refineries to turn that crude into gasoline.? You can’t drive your car on crude oil.

  6. sammy22
    sammy22 says:

    Dims, new refineries would help process the crude, but who is going to step up build them? I bet New England would be happy to have TX build more, but then how to get the gas from TX to CT? Another pipeline? That would take some doing.

    • SoundOffSister
      SoundOffSister says:

      We already have the pipelines that bring refined gasoline from Texas to central distribution points in this country.? From there, it travels by freight car or tanker truck to your local gas station.? As we know, that system works quite well as I have heard of no gasoline shortages in Ct., or anywhere else for that matter.
      Who would build those new refineries?? The major “oil” companies would be happy to do so if the government would just get out of the way.

      • crystal4
        crystal4 says:

        Guess what was our? #1 export in 2011? Refined oil.
        We have underutilized refineries in the mid-west. The big oil companies now want to export even more…that’s where the money is.

      • Dimsdale
        Dimsdale says:

        So when the price of gasoline goes up when refineries are taken offline for refurbishment, updating etc., or when one or two refineries on the Gulf are shut down for oncoming hurricanes, how come all this excess capacity isn’t used?
        ?
        The reason for the exporting is our lousy economy, which causes less fuel use, and more exports of processed fuel.? Maybe if ?bama and his team of Keynesians could get their collective heads out of their economic backsides, we could restore our formerly vibrant economy to a healthy condition that could use that exported fuel.

  7. winnie
    winnie says:

    I know!!!? Obama’s senate can offer tax credits for anyone building new refineries that result in the creation of J-O-B-S!? And then…and then…and then…They can impose price controls on gasoline that’s produced.? And these refineries can be union controlled.? Once they’ve managed to spend themselves to near bankruptcy with ridiculous salaries and pension benefits, Obama’s senate can then offer them a bailout at taxpayer expense.
    Throw in free health care and some gun-running, Catholic Mexican drug lords who are in need of the Plan B abortion pill and I think we’ve covered just about everything.
    What say you?

  8. sammy22
    sammy22 says:

    The easy non-answer to real issues is that the government is in the way. And I don’t think that US domestic oil producers are so dumb that they sell crude at $85/barrel when everybody? is buying at $100 plus/ barrel. I guess also that if the inventory of crude could be refined, there would be a corresponding higher inventory of gasoline.

    • Dimsdale
      Dimsdale says:

      With our luck, ?bama would insist that we join OPEC if we became a major producer again!

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