Obama to block Keystone oil pipeline

[The Minsky Moment]

The President is only involved because it crosses an international boundary, and thus requires approval from the State Department (not the EPA, Interior Dep't, or anyone else with any experience in environmental issues).

That is technically true, in the limited sense that the other agencies don't have to give formal approval.  But State is required to consult the other agencies and obtain their opinions as to whether the project complies with a number of federal laws.  State also has to consider whether additional information is required in light of what their sister agencies says.

[CountDeMoney]

The President is only involved because it crosses an international boundary, and thus requires approval from the State Department (not the EPA, Interior Dep't, or anyone else with any experience in environmental issues).

That is technically true, in the limited sense that the other agencies don't have to give formal approval.  But State is required to consult the other agencies and obtain their opinions as to whether the project complies with a number of federal laws.  State also has to consider whether additional information is required in light of what their sister agencies says.

The EPA still has a a legal say:

However, EPA has a unique responsibility in the NEPA review process. Under Section 309 of the Clean Air Act, EPA is required to review and publicly comment on the environmental impacts of major federal actions, including actions which are the subject of EISs. If EPA determines that the action is environmentally unsatisfactory, it is required by Section 309 to refer the matter to CEQ.

http://www.epa.gov/compliance/basics/nepa.html#eis

[Hansmeister]

By a nearly 2-to-1 margin, a majority of Americans think the government should approve the building of the Keystone XL pipeline, according to a new Gallup poll Thursday.

And it will be, once the appropriate environmental impact studies are completed.

Which they were before State granted approval.

Oh, you mean the second set of environmental impact studies which will be conveniently completed after the election. 

[CountDeMoney]

By a nearly 2-to-1 margin, a majority of Americans think the government should approve the building of the Keystone XL pipeline, according to a new Gallup poll Thursday.

And it will be, once the appropriate environmental impact studies are completed.

Which they were before State granted approval.

Oh, you mean the second set of environmental impact studies which will be conveniently completed after the election. 

These things take time.

[The Minsky Moment]

Which they were before State granted approval.

State didn't approval - not sure what this is supposed to be referring to.

State did the studies they were required by law to do, and both the EIS and Nebraska state officials pointed out a problem with the route through Nebraska and suggested an alternative route.  The Nebraska comments were driven in significant part by ranching interests who would have been adversely affected, and allied with environmentalists.  In November, the Republican governor of Nebraska and the Republican state legislature passed a law mandating that the Nebrasks route be altered. and allocated state funding for a new environmental review.  At the same time State authorized a new EIS to analyze the proposed new route.  Yet in December the GOP members in Congress tried to force a yea-or-nay on approval by January 2012, which was just a cheap political stunt designed to force a disapproval.

All this needs to put into proper context.  The actual Keystone pipeline proper (the "mainline") has already been built.  The current discussion is about the extension to that pipeline ("XL").  The XL has two components.  The "lower" portion links the current terminus in Cushing, OK to the Gulf Coast.  Cushing is a principal oil storage facilitiy and also happens to be the delivery point for the benchmark WTI contract.  The problem with Cushing is that it is landlocked and that has caused distortion in the WTI index and pushed up stockpiles as domestic production of oil has increased over the past few years.  The advantage of the lower portion is that it connects the existing pipeline with GC refineries that are already set up to refine low quality crudes and permits re-export by sea if desired.  Because the lower portion would link up the existing pipeline route, the lower portion is desriable in and of itself, a fact that eludes the gargantuan mind of Newt Gingrich.

The proposed upper portion would have the effect of increasing total capacity and allowing additional US production to be fed into the system.  It would be nice to have but not essential.  One alternative would be increasing refinery capacity in existing Midwest terminuses although that takes time and might pose NIMBY problems of its own.  Of course, building a pipeline does nothing to increase the supply of oil and the effects on prices, if any, are subtle.  It certainly doesn't alter the fundamentals of the international market and supply and demand conditions for oil.  Because oil sand production is very expensive (comparatively) it would not facilitate a Gingrichian 2.50/gallon gas price; indeed, sustained prices at the level would render oil sand production uneconomic at present day extraction technology.  What it might do would decrease transport costs somewhat and probably allow the GC refineries to run more efficiently and save some $ on input costs. 

[Hansmeister]

So basically Obama caved to special interest groups and decided to put off the decision until after the election.

Oh, the document you seem to be confused of can be found on the state dept website. http://www.keystonepipeline-xl.state.gov/clientsite/keystonexl.nsf/03_KXL_FEIS_Executive_Summary.pdf

Funny thing is that state seems to have considered alternate routes as well.  It is all quite complete. And of course increasing supply of oil to the US market has an impact on oil prices on the US market. Econ 101. There is a reason oil prices vary around the world (and indeed within the US) and hat has to do with delivery costs, which would be much lower coming from a pipeline in Canada vs being shipped from abroad.

Obama is just bowing to the Gaia-worshipped, it is no surprise that Obama suddenly grew cold feet when they started threaten to withhold support for his reelection.

But nice WH spin there.

[The Minsky Moment]

So basically Obama caved to special interest groups and decided to put off the decision until after the election.

No - the GOP governor and legislature in Nebraska caved to the special interest groups.

Oh, the document you seem to be confused of can be found on the state dept website. http://www.keystonepipeline-xl.state.gov/clientsite/keystonexl.nsf/03_KXL_FEIS_Executive_Summary.pdf 

No confusion on my part.  The document clearly states the project is subject to approvals, not that approval has been granted.

State seems to have considered alternate routes as well.  It is all quite complete.

Yes they did and they concluded the other routes were even worse.  So once Nebraska directed the route change, Obama would have had valid grounds to shut down the entire upper part permanently based on the EIS.  Instead he sent the new proposed route back to State for re-evaluation, which I think it the better approach, no?

And of course increasing supply of oil to the US market has an impact on oil prices on the US market. Econ 101. There is a reason oil prices vary around the world (and indeed within the US) and hat has to do with delivery costs, which would be much lower coming from a pipeline in Canada vs being shipped from abroad.

It won't significantly increase the supply of oil available to the US market; what is will do is divert landlocked oil that would have gone to Midwestern refineries and allow it go to the Gulf Coast refineries, and it will permit the Canadian crude to compete with (and substitute for) overseas oil shipped into the GC.  The market for oil is global and while localized pricing anomolies can arise, they tend to be temporary.  The principal pricing anomoly in the US oil market is the piling up of stocks at Cushing due to the lack of an outlet from Cushing to the coast.  The result is that WTI prices are quite a bit cheaper than Brent.  Far from being a shortage of crude on the US mainland, there is excess supply - the problem is relative lack of refinery capacity with respect to the refineries connected to Cushing (and even that is being remedied).  Accordingly some analysts think the project may actually force gasoline prices upwards in the northern US because midwestern-based refiners will have to bid higher against the GC refineries to secure crude supply.  IMO this is going a bit far, but there is no reason to think there will be any meaningul effect in terms of lower pump prices.

What the XL project will do that is positive is increase the profitability of the GC refineries and diversify the crude supply available to those refineries.  Both are very useful things.  More profits for US companies are a good thing, especially if it prompts additional investment.  And to the extent access to Canadian crude leads to less reliance on imports from Venezuela, that is a plus as well.  But note that much of those advantages are secured once the lower half connecting Cushing to the Gulf is built out.  The upper extension is gravy.

Obama is just bowing to the Gaia-worshipped

Only fair, to balance off the Saudi princes.

[KRonn]

Pres Obama hates Brown (Oil) people....   

[Razgovory]

These Hans-Minsky debates are always so much fun.  Hans cribs an argument from the NRO, is shot down, and then just vanishes for a few days.

[derspiess]

These Hans-Minsky debates are always so much fun.  Hans cribs an argument from the NRO, is shot down, and then just vanishes for a few days.

His visits here tend to be brief, regardless how an argument is going for him.  And I don't think he's been shot down in this thread.

[Neil]

So basically Obama caved to special interest groups and decided to put off the decision until after the election.

That's not caving to special interest groups though.  If you put the decision off until you don't need the special interest groups anymore, that's called being smart.

[CountDeMoney]

These Hans-Minsky debates are always so much fun.  Hans cribs an argument from the NRO, is shot down, and then just vanishes for a few days.

His visits here tend to be brief, regardless how an argument is going for him.  And I don't think he's been shot down in this thread.

Of course you don't, lapdog.

[alfred russel]

I have no idea how the schedule was set - you tell me.  What is the usual time for completing a NEPA review for a pipeline of this size? 

I while back I did some work with one of the larger pipeline companies in the US, and was told that it had been a long time since a major pipeline had been built and the company was of the opinion that a major US pipeline would never again be built (or at least in the forseeable future). The thinking was that between the environmental impact, the nimbyism, and the cost of real estate (now that we have many more urban and suburban areas) the expense and trouble of building a new pipeline didn't make sense (especially while current pipelines have so many opportunities for upgrade).

It wouldn't suprise me if there simply isn't a usual timeline because this sort of project is something we stopped doing decades ago.

[crazy canuck]

It wouldn't suprise me if there simply isn't a usual timeline because this sort of project is something we stopped doing decades ago.

Yeah, there is a lot of reinventing of the wheel on both sides of the border.  Except this time we are trying to invent a wheel that will land on Mars rather then simply move a model T along.  The complexity, at least on this side of the border, his huge.  I imagine it is similar for you.

[Razgovory]

Yeah, this is much more complex then the Transnational Maple Syrup Sluice built back in 1908.