Keystone pipeline

Letter | Keystone pipeline plan won’t provide what Rice, supporters claim

February 17, 2014 

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Dear U.S. Rep. Rice: I voted for you in the election for the U.S. House of Representatives because you seemed to give real thought to local issues. Your opinion piece of Feb. 4 on the Keystone Pipeline surprised me. Did you write the article or did a staffer?

If a staffer, they need to be reassigned. Was any time given to check on the facts of the issue or was it just a regurgitation of propaganda? This should not be a party versus party issue. Please check the facts and give us another look at it. And before I get into the information presented in the opinion piece, let me remind everyone that U.S. domestic oil production in the past few years has increased and is at the highest level it has ever been – under President Obama, who is often accused of wanting to cut oil production.

From my research on the issue The Keystone Pipeline is a project by a Canadian Oil Company to reroute the existing pipeline on its current Canada to U.S. Midwest route and build a new piece connecting it to the U.S. Gulf coast refineries and market. This Canadian oil is presently being shipped into the U.S. Midwest where it is refined and sold in the market there. Rerouting and extending the pipeline will not create new oil supplies in the U.S. market – it is already here.

Lets discuss some of the article’s assertions.

1. You said it will “lower bills at the gas pump, which have increased by $1.30 per gallon since President Obama took over.” This Canadian oil is already being imported into the in the U.S. through the current pipeline, allowing the extension to the Gulf market will allow this oil to be sold to world markets at the higher world market prices. How will this lower our prices? And the $1.30 per gallon increase, what are you using for the basis of this claim. Our gas in your district is @ $3.05 per gallon today. No way was the price $1.75 per gallon at the end of President Bush’s term – he was the first to see prices soar well above $4 in the U.S.

2. You said it will “lower monthly utility bills, which will reportedly increase $40 per month for the average family as a result of President Obama’s war on coal.” Two things on this assertion: how will oil lower a family’s coal bill – heaters don’t burn both. Plus, see No. 1 above, this oil is already being shipped to and processed in U.S. refineries and sold in the U.S. market. How does building a pipeline create more or change the price of this oil and coal?

3. You said “during the two-year construction period for the pipeline, 42,000 jobs will be created …” This is not accurate. In a Nov. 25, 2013 article by Keystone XL, the Canadian oil company in question, they stated “Of course it is difficult to calculate all of the impacts and spin-offs this investment will have on local communities, but TransCanada has always been very clear that building Keystone XL will require at least 9,000 skilled workers during two years of construction.” When you dig even further into their press releases and briefing you will see that they talk 9,000 “man-years” over two years, meaning an estimated 4,500 new job per year for only two years.

4. You said “lower energy costs makes companies in America more competitive… “ Completely agree with the statement but what does it have to do with the Canadian oil company pipeline extension? Again, refer back to No. 1, the oil is currently in and being used by the U.S. market. Extending it to the Gulf coast means we will have to compete with the world market for this oil. Check the U.S. Department of Energy statistics which state “within the Midwest and Rockies, the regional average refiner acquisition costs were 8.6 percent and 14.1percent, respectively, below the U.S. average annual refiner acquisition cost in 2011. Compared to other crude oil prices, the lower relative price of Bakken crude oil resulted in lower retail prices for gasoline and other petroleum products in the Rockies.” So how does shipping it to the gulf refineries and competing against China for it lower already lower-than-average costs?

5. You said “reduced oil imported from the Middle East.” We are already importing this oil from Canada and have been for a number of years. How does refining it in the Gulf refineries instead of the Midwest refineries reduce the amount of Middle East oil we need?

6. You said “Reduced trade deficit and stronger U.S. dollar.” The trade deficit is based on what we import versus what we export. Canada is a foreign country, not part of the U.S.. Canadian oil is “imported” into the U.S. and counts against our trade deficit. If extending the pipeline to the Gulf refineries would cause the cost of the Canadian oil to go down that would lower our deficit, but none of the facts support that the price will decrease once the rest of the world can bid against us for it. Do you really think this Canadian company is spending all of the money for the pipeline just so it can get lower prices for its oil?

Overall: Another issue that is not discussed: What is the big bonus to the U.S. consumer if Gulf refineries do the work rather than Midwest refineries? Since it won’t go to the Midwest refineries then yet more permanent jobs will be lost there, correct? And adding more oil going to Gulf refineries puts us even more at the mercy of Mother Nature and acts of God. Remember Katrina and how prices went up because of reduced capability at the damaged Gulf coast refineries? As a 30 year soldier and paratrooper, I don’t like the idea of adding even more eggs to a fragile basket.

If I were President, I would be hard pressed to approve this project.

The writer lives in North Myrtle Beach.

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