Why the Keystone pipeline is NOT as good as it sounds

United States
June 10, 2012 8:26pm CST
Many have been upset with the rejection of the Keystone pipeline, but more facts are coming out about this pipeline that might not make this as good as it sounds. First off, did you know there is already a Keystone pipeline? Second, did you know that the purpose of this pipeline was to take oil from Canada to the refineries in the Gulf to then be EXPORTED? Did you also know that one of the other purposes was to set up a transportation system to for shale oil in the Rocky Mountains? The problem with getting this shale oil is it is very expensive, which means that oil has to be around $95 a barrel to make it profitable to get this oil. That means that we will have to pay more than we are today to get oil that comes out of our own ground. So, does the pipeline still make sense? http://shaleoilplays.com/2012/01/the-keystone-pipeline-bad-for-u-s-oil-industry/
5 responses
@elmiko (6640)
• United States
11 Jun 12
it would only makes sense if future oil prices are higher due to a lack of supply. i guess the rocky mountains are next to be drilled when oil prices start to tread higher for good. as of right now studies are out that suggest that the main low for oil will stay around $75 only to most likely go up.
1 person likes this
@sierras236 (2740)
• United States
11 Jun 12
The extraction of the oil is Canada's problem and cost. Second, President Obama's approval is needed for about a thirty-foot section of the entire pipeline. Approval is required where the pipe actually crosses the US border. They can build the rest of the pipeline without Presidential approval but there is no point in doing that if it isn't connected. Third, it doesn't matter if they EXPORT the oil or not. The point again is that the oil is easily accessible to the US. There are no tankers required in the shipping. If the US decided to buy that oil, it is pretty easy to get it where it is needed. Now, whether or not companies decide to take the risk of extracting shale oil in the Rocky Mountains is a different story. The point is that if they decided to go ahead, the pipeline is already in place and if this oil was ever needed in the future by this country, the pipeline is already in place.
• United States
11 Jun 12
"The extraction of the oil is Canada's problem and cost." I have no idea what you are talking about. Please explain. "Second, President Obama's approval is needed for about a thirty-foot section of the entire pipeline. Approval is required where the pipe actually crosses the US border. They can build the rest of the pipeline without Presidential approval but there is no point in doing that if it isn't connected." Did you read my post: The pipeline ALREADY EXIST!!! "Third, it doesn't matter if they EXPORT the oil or not. The point again is that the oil is easily accessible to the US. There are no tankers required in the shipping. If the US decided to buy that oil, it is pretty easy to get it where it is needed." Do you understand what EXPORT means? This oil will NOT stay in the US, it would be shipped to OTHER COUNTRIES after it is refined!!! "Now, whether or not companies decide to take the risk of extracting shale oil in the Rocky Mountains is a different story. The point is that if they decided to go ahead, the pipeline is already in place and if this oil was ever needed in the future by this country, the pipeline is already in place." When you buy oil would you pay $.50 more for oil that comes from Colorado Shale? Now you understand why the oil companies are not upset that Obama said NO.
• United States
11 Jun 12
Canada's oil, Canada's cost. Frankly, I was confused when you started on this Rocky Mountain business. Yes, most has been built but not all of it. They still need that 30 foot section to get the oil flowing. Who cares if Canada EXPORTS it? Again, their oil, they can do what they wish with it. As long as they pay for the pipeline, insurance, state taxes, paying for it to be refined, etc... Again, point is that if it is needed, it is readily accessible and cheaper than shipping it overseas. Has President Obama specifically asked for that oil? What did America suddenly become a dictatorship under your watch? If that's the case, you really need to vote President Obama out. The oil company always takes the initial risks/costs. If things change and that Rocky Mountain oil is needed because the Middle East suddenly went dry then costs are going up anyways. The pipeline is already in place and that is one less thing they have to worry about when getting it out. It might not be cost effective now but who knows in the future?
• United States
11 Jun 12
"Canada's oil, Canada's cost. Frankly, I was confused when you started on this Rocky Mountain business." This Shale oil I am referring to is in the US, not Canada. The northern plains, and the Rockies have a lot of Shale oil, but it is expensive to get to. "Again, point is that if it is needed, it is readily accessible and cheaper than shipping it overseas." Why should be care how much it cost Canada to ship IT'S oil? "The pipeline is already in place and that is one less thing they have to worry about when getting it out. It might not be cost effective now but who knows in the future?" You said it yourself, the pipeline is ALREADY IN PLACE of that Shale oil. So what is really gained by that other 30 feet?
@Fatcat44 (1142)
• United States
11 Jun 12
Is this still not more jobs for us? Does it still improve our position in the oil industry The oil will be refined in the US and sold. Already we are exporting a lot of refined oil, as gas, diesel and ethanol, etc. We will either export it or use, depending on how all of the contracts go. It finally time that we get set up on a business that we can export to offset our imports. So what is the point? Yes I have seen that some of the pipe line system already exist, but I am not sure the overall logistics of it, but without the rest, Canada cannot ship through us and will go else where.
• United States
11 Jun 12
"Is this still not more jobs for us?" It will mean short term construction jobs. "Does it still improve our position in the oil industry" NO, it will take away capacity at US refineries which is the reason gas is so high right now. US oil refineries are at 100% capacity currently, and the two refineries that are being built in the US will not make up for the lose of capacity in the closed refineries. So where are they going to come up with the extra capacity? My point is that this pipeline does NOTHING for the average American at best, and actually could HURT them financially if it goes through and the Canadian's pay more to have their oil refined (thus taking away capacity, and driving up prices). Where else is Canada going to go, and why haven't they already?
@Fatcat44 (1142)
• United States
11 Jun 12
These items you talk about is not the government or our dealings, it is the oil refineries business. I am sure if there is business out there, the oil refineries will grow to do the work. The government job to approve or disapprove the pipeline has nothing to do with what you are talking about. And needs to stay out of it and let the capital market work. The more business we have in the US, more refineries will be built, if the government allows, to take care of the demand. Is it better to bring the oil in from Canada or from the Mideast as we are doing now. We are mistaken on your earlier statements of taking away capacity of the gas we use here. We already get oil, refine and ship it out. Most of it from the Mideast. It is time to quit buying from the Mideast and produce it here. We are refining more oil than the US uses. Oil and ethanol, if you do your homework is an export product for us. Canada fall back plan is to build a pipeline to the west coast and ship the oil to China. You want to send the business to China?
• United States
11 Jun 12
"These items you talk about is not the government or our dealings, it is the oil refineries business. I am sure if there is business out there, the oil refineries will grow to do the work." Do you know how long it takes to build a refinery? Do you know how much it cost to build a refinery? Most importantly, do you understand how the oil industry monopoly works? Once you do some research these things you will understand why the oil industry will NOT "grow to do the work". "The government job to approve or disapprove the pipeline has nothing to do with what you are talking about. And needs to stay out of it and let the capital market work." If you didn't want this pipeline built, than how would you do it while saving face: Have the government do it!!! "The more business we have in the US, more refineries will be built, if the government allows, to take care of the demand." The oil industry doesn't work on normal supply and demand market theory. If you can control the supply demand doesn't matter. If you built more refineries you can't control supply so you are working more, spending more money, and not making anymore profit. Would you do this if you owned a refinery? "Is it better to bring the oil in from Canada or from the Mideast as we are doing now." I agree that it is better to use Canadian oil, but the oil we would be refining is going to be EXPORTED, that means it WOULDN'T cut down on our imports of Middle eastern oil. "We are mistaken on your earlier statements of taking away capacity of the gas we use here." NO, you are mistaken in the fact that we would import MORE oil from Canada if this pipeline went through, and NONE of it would stay here!!! "We are refining more oil than the US uses." You are correct, but that doesn't mean that it is staying here. We are exporting more of it overseas, while the oil companies are keeping prices high here because they complain about refinery capacities. They are exporting it because they can make more money both here in the US, and overseas. We are ALL getting SCREWED by big oil!!!! "Canada fall back plan is to build a pipeline to the west coast and ship the oil to China. You want to send the business to China?" Where is that oil going to in the end? CHINA!!! So does it really matter if we refine it or the Chinese?
@debrakcarey (19925)
• United States
11 Jun 12
First of all, what was proposed was to complete the pipeline as far as the Gulf. And there are always pros to every con. http://normantranscript.com/opinion/x897044856/Why-we-need-the-Keystone-pipeline And when the administration takes a stand there will be all kinds of 'experts' that say he is right. I prefer to get all the facts, all the opinions and then decide. The enviromental aspect: In the first place, today, there are more than a 100 pipelines that crisscross the same region contemplated by this new pipeline. The map looks like a spaghetti plot overlying the 174,000-square-mile Ogallala aquifer. These lines are not only carrying oil of generally better flow quality but also lighter oil products which — to the learned, concerned individual — are more environmentally dangerous in the event of a spill than the tar sand crude. On Jobs: [i]On the question of jobs, frankly, the idea proposed by the pipeline industry that this pipeline will create 27,000 jobs is unintelligently shortsighted. No doubt, the pipeline has to be built with the help of thousands of workers, maybe 27,000. As far as jobs are concerned, this claim is not a mirage, but it is not focusing on the true extent and the real job situation in this country of 307 million people. We all know that oil price, whether we believe that it is real or fabricated, literally drives our country, our industry, the 27 million small businesses and their hundreds of millions of employees across the nation. Any incremental change in national employment, which we know can be directly related to oil price fluctuation, dwarfs the pittance in employment that the pipeline construction will provide. [/i] Energy stockpile: For the US, the Canadian crude can be regarded as a built-in safety valve for energy security. Every day, this 1 million barrels of oil source is enough to make the previously unbalanced supply side of oil even better. The ability to store oil makes it a worthwhile asset to be implemented. As always there are TWO sides IF NOT MORE to every issue. The main side of this issue right now, is how the American people percieve Obama's decision. They are p!ssed as h3ll he said no, and that is what matters cause it just may contribute to his being unelectable in Novemeber.
• United States
11 Jun 12
I will take these one at a time: The administration has said that there is a more environmentally safe route, and they are working with the pipeline companies to make that happen. Jobs: Although the jobs would be great in the construction field, they would be short lived. There would be NO refining jobs because the only refineries that are planned to be built are being manned by people moving from closed refineries in other states. Energy stockpile: We currently have the largest stockpile of oil we have ever had. The United States uses 19 million barrels of oil a day, that 1 million barrels wouldn't do much of anything to help us in case there is an emergency. I feel once the American people understand what this pipeline would do for the country, they will understand what it will do for them, or what it WON'T do for them to be more specific!!!
• United States
12 Jun 12
Anytime you start out with the words, "the administration has said," you know it is one of three things. 1. A lie. 2. A hopeful lie. 3. A very hopeful lie that becomes a bill that will never in a million years get passed because it is so stupid that no one in their right mind would actually vote for it.
@debrakcarey (19925)
• United States
12 Jun 12
And any time anyone refuses to look at both sides of the issue, I know they're brainwashed.
@andy77e (5170)
• United States
12 Jun 12
First off, did you know there is already a Keystone pipeline? So what? Did you know we already have hundreds of millions of jobs in the US? Does that mean we don't want any more? Second, did you know that the purpose of this pipeline was to take oil from Canada to the refineries in the Gulf to then be EXPORTED? Again so what? I would assume that you know the basics of economics, that you have a supply and demand system, right? If they export it to China, that means China doesn't need as much. Which lowers the demand, thus the price goes down. Again, whether it's exported or not, doesn't matter. It will benefit us either way. Further, your article doesn't even claim it 'will' be exported, but merely that it could be. Well duh. The oil going through the existing pipe could be exported too. They just have to drive it to the coast first. Did you also know that one of the other purposes was to set up a transportation system to for shale oil in the Rocky Mountains? Good. More benefits for the country. The problem with getting this shale oil is it is very expensive, which means that oil has to be around $95 a barrel to make it profitable to get this oil. That means that we will have to pay more than we are today to get oil that comes out of our own ground. They said the same thing about tar sands. They said we'd never get oil from the tar sands because it would cost $80 a barrel. Well, 2008 hit, and they started pumping oil from the tar sands. Here's the kicker. As they invested in tar sands oil, the cost slowly declined. Today it costs only about $50 a barrel to produce tar sands oil. But it required investment to make it worth while. I suspect that the same will be true of shale oil. Look, here's the bottom line. You don't know anything about the oil industry. Neither do the nimrods on that dumb web site you linked to. It's amazing how if someone tells a liberal how to run their life, you get this "you don't know what it's like to be me!" Yet when it comes to business they know nothing about, they suddenly are psychic brilliant business people.
@debrakcarey (19925)
• United States
12 Jun 12
• United States
13 Jun 12
Andy, you aren't worth my time. I have already dealt with all of these objections in other post. You can read them to see my answers.
@andy77e (5170)
• United States
14 Jun 12
Well I would disagree with all the answers you have provided. For example, you try and claim again, that somehow this would increase cost. Again, it is completely and utterly impossible to have an increase in supply raise the cost. Simply not possible. It does not matter whether it's imported or exported, if the supply goes up, the price will fall. The only way that could not happen, is if demand increased faster than the supply, in which case increasing the supply will mitigate the effects of higher demand. But all things being equal, import or exporting will not in and of itself, have an effect on the cost of fuel. Only supply and demand. Again, you seem to claim that somehow in your mythical world, more supply will drive up cost. You are wrong. Simply wrong. As usual I might add.