I have to be rather bald about this. Obama’s response to recent questions about the Keystone XL pipeline make me wonder whether he’s stupid, or whether he’s just pandering to people who are stupid.
FYI: The Keystone XL pipeline is an oil pipeline proposed to run across the plains, primarily for the purpose of bringing oil production from northern Alberta (that’s ramped up over the last 10 years) to refineries and ports along the American Gulf Coast that have been there for decades.
Understand what this project is: It is providing the ability of Canada to pump their oil, send it through our land, down to the Gulf, where it will be sold everywhere else. It doesn’t have an impact on U.S. gas prices …
Where do I begin?
- Is Canada our friend or not? Do we help friends? In this case, private U.S. firms want to help Canadians, and the U.S. government is blocking that.
- Why single out oil? I know, it’s the Keystone XL pipeline that’s in question here, but I really can’t imagine him saying this about Canadian water?
- Whose oil will it be when it crosses “our land”? Is Obama also against Canadian storage tanks in Houston, or are those not necessary? My guess is that the Canadians sell their oil to the American owners of the pipeline as soon as it crosses the border. It seems to me that he’s actually against our oil, and is using the Canadians as a punching bag (see the first point).
- Why is adding “the Gulf” necessary? Would Obama be in favor of this if the pipeline went to the Pacific Ocean? My guess is that this is to attract the attention of people who are worried about oil spills in the Gulf specifically in the wake of the BP Horizon spill. If I’m right, Obama hopes that listeners suffer from availability bias. If I’m wrong, then I think Obama suffers from it. Note that my position is not in favor of spills: I’m just pointing out that they can happen anywhere but that referring to a place where they recently did happen should make you suspicious of manipulation.
- Why bring the oil to the Gulf at all. Oh yes … because the refineries are already there. Note that Obama is not suggesting the we build new refineries closer to where the oil comes out of the ground. Heck, he could even offer to build refineries for Canada to just keep the oil away. But he didn’t. Instead he rather specifically wants oil refineries along the Gulf to not have access to Canadian oil. Why?
- Why would anyone care where the outputs of the refineries, which are for the most part no longer “oil”, are sold? This almost seems like Obama wants a trade restriction on refinery exports. Then why didn’t he just say so? Oh yeah … because restricting exports is usually stupid. Do note that Obama never suggests that we’ll build the pipeline and then throw big, sharp, rocks in the harbors where the resulting products might leave from. Because that would sound stupid. Even though that produces the same outcome of reducing exports.
- And how is this not going to have an effect on U.S. gas prices? This is a President whose policies actually encourage people to import their own pharmaceuticals because they’re cheaper to put pressure on domestic pharmaceutical prices. Apparently gas doesn’t work the same way. It’s not like you can put it in containers and take it with you. Oh … wait … scratch that.
I’m sorry. All Presidents say dumb and bizarre stuff sometimes. But this is by far the most “out there” thing this President has ever said.
P.S. I need to add another point about what will happen to the oil without the pipeline. It will still get to refineries. Maybe even refineries along the Gulf. How do we want it to get there? Tanker truck driving too close behind you on the interstate? Railroad tanker cars snaking through your town? Or in the pipes just like the ones that go everywhere already. If Obama is against the Keystone XL pipeline, is he also against the pipe that carries gas (and perhaps oil) into your home?
Cross-posted from SUU Macroblog which is required reading for my students.