Tag Archives: Keystone

Obama Administration Energy Policy Missteps

Sometimes you can’t win for losing.   Or maybe it’s a case of no good deed goes unpunished.   Na….I think the guys advising Mr. Obama all have the same view of the energy world.   And it’s a dream world that looks past renewable energy shortcomings and exaggerates the shortcomings of fossil fuels.   Their rose colored glasses have made it difficult for them to see clearly.

The Obama administration has made a total mess of their energy policy….but they have been trying.

The administration is full of global climate change true believers. They have used the EPA to wage war on coal.   This has driven the cost of coal down….which has made it the fuel of choice in the developing world.   China has vaulted to the top of the world pollution statistics in large part because they use cheap coal energy.

To combat the problem (if cheap energy can be considered a problem), the administration, as a part of a 2009 stimulus package, threw money at a variety of alternate energy initiatives.    In September of 2011, the whole thing began to unravel when Solyndra filed for bankruptcy, taking over 500 million in federal loan guarantees with it.

April 20th, 2010 — A few months after the administration began supporting deep water drilling in the Gulf of Mexico, BP made a total mess of things when the Deepwater Horizon blew up.

Mr. Obama then overreacted to the disaster, and played a bit of politics. The subsequent mess set back deep water drilling in the Gulf of Mexico for years.

The Arctic National Wildlife Refuge probably has lots of oil under it.   And it’s pristine wilderness (as is most of Alaska).  Environmental groups have made drilling there politically impossible.  After years of study, the Administration has decided to allow drilling offshore near there in the Beaufort Sea.

There likely is lots of oil in the Beaufort Sea.   Shell has spent almost 5 billion dollars trying to figure out a good way to produce there.  2012 was not a good year for Shell.  Late summer ice in the Bering Sea, and a support ship arriving late virtually assured the fall drilling season would be a bust, but Shell tried.

When the abbreviated drilling season was over, things went from bad to worse when a tow line between a tug and the drill rig broke.  The rig drifted dangerously and was damaged when it became grounded.

The 2013 drill season was cancelled and the drill rig was sent to Asia for repairs.

ANWR is a safer and less expensive place to drill when compared to drilling in the Beaufort Sea.  Modern directional drilling virtually assures a very small footprint for the drilling operations at ANWR.  Oil field infrastructure is nearby at Deadhorse.  The Alaska Pipeline is running less than half full, and all the necessary transportation infrastructure alreadly exists at Valdez.

ANWR is the smart choice when choosing Alaska Arctic exploration.  The Administration tried to be a participant in the region while staying as far away from ANWR as possible.  So far, things haven’t worked well.

And then there was Keystone.   A few posts ago I detailed why the current policy relating to Keystone is flawed.   And then a runaway train accentuated my point.

If I were in the Obama administration, I’d be more than a bit demoralized.   Every attempt seems wrought with difficulties… and missteps seem to be standard operating procedure.

Oh, one more thought….Mr. Obama has been on the wrong side of the Natural Gas debate since he got elected.  Jobs, clean air, cheap energy, and good for the environment; natural gas is all of the above.   The administration is so preoccupied with “clean” energy that they missed the big clean fuel right in front of their noses.  Natural Gas.

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The new Obama Keystone Pipeline miscalculation

First an admission –  I voted for Mr. Obama in 2008, but I voted from Mr. Romney in 2012.   It was a tough call, but I took the economy over social issues and went with the guy that, in my estimation, better understood the business that is the US economy.  Unfortunately Mr. Obama has proven to be as I expected.

The economy has improved since the election because housing and energy and autos are booming.   Housing and autos were going to boom no matter who was in charge, but the resurgence in US oil production has been in spite of Mr. Obama (even though he likes to take credit for it).    Case in point, linking the Keystone Pipeline to a global climate initiative.

Mr. Obama and his friends don’t like fossil fuels, so anything that aids in the production of them is necessarily an environmental problem.  So we get statements like:

Allowing the Keystone pipeline to be built requires a finding that doing so would be in our nation’s interest

and also:

And our national interest will be served only if this project does not significantly exacerbate the problem of carbon pollution. The net effects of the pipeline’s impact on our climate will be absolutely critical to determining whether this project is allowed to go forward

The Obama administration is hiding behind the notion that a single pipeline project can have a significant impact on global climate.   And other administration officials are interpreting that to mean any increase in carbon dioxide is significant.  Both positions are surprisingly stupid and more than a little bit naive.   An Ostrich with his head buried in the sand immediately comes to mind.

Let’s start with an assumption, the Canadians are going to produce the oil and it is going to get to a market somewhere.   The US State department has said as much in their review of the project.  And now the EPA is suing the State Department, saying they violated EPA law…go USA.

If there is no Keystone pipeline, the oil may cost a small amount more to transport and will need a higher clearing price to be profitable but it will be produced.

Since the oil is going to be produced, the trick is to find the most efficient way to get it to market.   There is only one answer…a pipeline.  Pipelines are the most efficient way to move oil.  Sure rail works too, but it is less efficient.  The Canadians have two choices, the Keystone project or a pipeline (or rail) to British Columbia and marine transport to Asia.   Which is better for the environment?  Remember the Exxon Valdez before answering!

Duuuuh.

Doing nothing is not a choice.  But let’s suppose the Canadians chose not to produce the oil.  We would have to get our oil from someplace else….like Venezuela or Russia or perhaps Saudi Arabia.  All have environmental and political costs associated with their production and transportation to market.

All the alternate feasible energy options will have some environmental risk and could have much greater political risk than the Keystone Pipeline. For my money, oil from Canada trumps oil form anywhere on the other side of the Atlantic.  When I think of Iraq or Iran or Saudi Arabia, I have no difficulty coming up with a positive public interest finding for Keystone.

Pipelines do scar the land during construction, but that damage is temporary and easily mitigated.  There is some risk of a spill, but the risk is relatively low and the cleanup (particularly when on land) is relatively easy to mitigate.  Environmentally, pipelines are generally a good choice, particularly when comparing them to the alternatives.

Come on guys….

And now for the really stupid part….the implication that any single relatively small project can have significant worldwide climate implications or the notion that any amount of  additional carbon in the environment is mathematically significant.  It doesn’t matter whether you believe in global climate change as predicted by the UN or not, the math makes no sense.   Any single project is just too small to matter.

The notion that there is a clear national interest in denying the project….well that’s just extra special stupid.  Allow me to explain.  Three charts should do the job, and here they are.  The first is total green house gas emission in the USA by sector:

Most of the Industry section (20% of the total) is end use energy  consumption.  Either heating or process fuels.  All the pipelines in the USA are but teeny tiny part of the Industry section. The best ways to reduce carbon dioxide in the USA are to reduce transportation fuel (better gas mileage vehicles) and to use less coal in power generation.

There are lots of pipelines.

How can one pipeline really matter?

Carbon production is a world wide story.  Thinking regionally doesn’t work when counting carbon.   In 2005 the USA produced more man caused carbon dioxide than any other country.  In 2006 China passed us…and by 2011 they produced 50%  more than the USA.   China now (2013) produces more carbon dioxide that the USA and the EU combined.

Any solution that reduces world wide carbon production must include China.

The natural cycle creates about 97% of all carbon produced at any given time.  The 3% man produces is probably changing the balance as carbon dioxide in the atmosphere has steadily risen by 1.5 to 2 ppm since the beginning of the industrial revolution.  Earlier this year it topped 400 ppm for the first time in over a million years.

China is increasing their carbon production by about 8% per year.  That 8% is a huge number.  It overwhelms every other number in any carbon dioxide calculation.

In summary

  • All pipelines collectively are but a tiny piece of the 20% Industry component of the US carbon footprint.
  • The USA represents about 16% (in 2013) of the world wide total.
  • China is growing their carbon footprint at 8% per year and is about 29% of the total.  Each year China increases the worldwide total by about 2%.
  • There are literally millions of miles of pipelines in North
    America

It is impossible statistically for one 2000 mile pipeline to become significant mathematically?   The impact is going to be so small as to be unmeasurable.   And China goes and goes and goes.   If China doesn’t change their ways what we in the USA do doesn’t really matter.

And if the Keystone pipeline is not built…the oil will go to China where it will be consumed in plants that pollute the air and raise the carbon levels more than if the pipeline had been constructed.