The White House indicated that President Obama will veto the Keystone XL Pipeline bill passed last week by the House and due for a vote in the Senate. Observers say an override is possible.
Meanwhile, a new technological development could make oil obsolete.
Pipeline progresses
Canadian company TransCanada has been waiting since 2008 for permission to build part two of the pipeline through states that include Nebraska. That state’s supreme court last week narrowly okayed the pipeline’s passage; the court’s rules required more than the opposition majority to overturn it.
Republicans say the pipeline would be a boon to the U.S. economy by creating many jobs, and the environmental impact would be minimal. Democrats say the opposite.
Nature is the key
The oil would be extracted from oil sands (bitumen). The two extraction methods would cause environmental damage in the surrounding area, and the production of the oil creates 17 percent more carbon pollution than does conventional oil production. But the New York Times says most experts don’t think the additional emissions would contribute much to climate change. Some worry about pipeline leaks, but transporting oil by rail carries risks of accidents.
Here today, gone tomorrow
The Times referenced a State Department report that 42,000 jobs would be created, only 3,900 of them in construction, but the jobs would last only two years. A piddling 35 permanent jobs would result. Building the pipeline would contribute $3.4 billion to the American economy – but only over a short time period.
Sen. Elizabeth Warren
Are the assets worth the liabilities? Sen. Elizabeth Warren, the Massachusetts liberal, told the Senate last week that they weren’t. She didn’t say it, but with the price of oil so low and America’s supply so high, it’s questionable whether the oil, which costs more to produce than conventional oil, would be profitable for TransCanada.
Key issue
Keystone XL Pipeline protesters
Another part of the equation is unknown to most people. Statoil, a Norwegian oil-and-gas company with operations in 36 countries, has developed a technology that could eventually nullify the need of oil for motor vehicles. Its researchers came up with a way to convert natural gas into gasoline that is identical to gasoline from oil. It reportedly is 40 percent cleaner environmentally, and costs 58 cents a gallon to produce. An analyst with the Oxford Club, a stock investment newsletter group, quotes the Brookings Institution as reporting that the new process “will account for 24% of all of the liquid gas supply in the United States by 2017.”
Norway’s Statoil
A plant is about to be built in a Gulf Coast bayou, and will produce 96,000 barrels a day, enough to power 10 million cars for a year. The company could make a sizable profit at a price of less than a dollar per gallon. Already, Statoil is producing 34,000 barrels a day in a small desert nation, the analyst said.
Statoil service station
He said experts told a congressional energy committee in a “secretive” meeting that the new gasoline will have a “substantial impact on the U.S. economy.”
If this development is for real, why would anyone need the Keystone pipeline?