Thursday, July 11, 2013

Pipeline Denied; People Died

The Left is into catchy phrases to chant at their demonstrations; they might want to consider this entry.

                                                                                (Radio Canada)
As many as 50 people could be dead after a massive explosion of a series of tanker cars in a runaway train that crashed into the small, historic community of Lac-Mégantic, Quebec, a town of some 6,000 about ten miles from the United States border of Maine, in the early morning hours of 6 July.  Twenty bodies have been confirmed and thirty are still missing and presumed dead as investigators and fire fighters dig through the remnants of the central town area.

Seventy-two tanker cars carrying crude oil derailed after rolling uncontrolled from the town of Nantes, about seven miles away, where the train had been parked for the night.  The average slope of the track between the two towns is 1.2%, relatively steep, and by the time that the train slammed into Lac-Mégantic it was estimated to be travelling in excess of 60 miles per hour.  The resulting fire and explosions rocked the small town all night.

The train had been left unattended in Nantes and the single engineer stated that he set eleven handbrakes prior to departing for the night.  A small fire broke out minutes later and firefighters arrived to extinguish it, all within an hour.  It is unknown whether this fire contributed to the reason that the train slipped its brakes.  The CEO of Rail World Inc., parent company of the Montreal, Maine & Atlantic (MMA) Railway that owned the train, blamed the engineer, despite the ongoing investigation, in a contentious impromptu news conference on the street in Lac-Mégantic when he arrived to survey the damage after some five days.  He had come under strong criticism for remaining in Chicago, where he said he could be more effective in communicating and coordinating the company response.

Whatever the proximate cause of this tragedy, one must consider that the trans-shipment of oil by rail car must have a more expedient alternative, and it does – pipelines.  Hardly a new innovation, pipelines are restricted for this purpose despite the huge increase of oil production as a result of recovery from the tar sands of the Bakken Basin, which covers large areas of North Dakota and eastern Montana (which have seen a large positive economic impact), as well as huge reserves of the same field in Saskatchewan across the border in Canada.  [Click them all to embiggen.]

The Obama administration has fought the development of these fields, relying instead on speculative new 'green' technology instead, at the insistence of powerful environmentalist lobbies entrenched in the Democrat Party.  Obama has gone so far as to blithely assert that the price of fossil-fueled electricity needs to "skyrocket" in order to force the new technology on the people.  ("Because I'm capping greenhouse gases, coal power plants, you know, natural gas, you name it – whatever the plants were, whatever the industry was, uh, they would have to retrofit their operations.  That will cost money.  They will pass that money on to consumers.")

Part of Obama's stump speech during the last election (when he wasn't dismissing the Benghazi "road bump") was to tout the fact that oil production was higher than ever, but this was despite, not because of, federal interference into the oil sector.  Oil production from shale oil took place on private leasings and state land; federal reserves (as well as off shore areas) remained locked up. 

A key element of this battle has been the Keystone XL pipeline, adding to the already existing Keystone, which would extend the line from Hardisty, Alberta to the coast of Texas near Nederland and improve capacity.  Construction of the line would employ as many as 40,000 workers and increase North American oil production by some 30%, but Obama remains beholden to his environmentalist base.  Delay of the pipeline has already extended well beyond what is reasonable and it is the most 'studied' (or stalled) such plan in history.  Excuses include concern over the possibility of the effect of a leak over a major aquifer in Nebraska, but the route was modified to take this into account long ago.  Rhetoric obscures the fact that some 21,000 miles of pipeline crisscross Nebraska already, part of some 500,000 miles of such pipelines throughout the US.  All this has been covered in great detail, though not necessarily in the main stream media.  One embarrassing point for the 'Greens' is the report quietly released by State Department to the effect that the Keystone XL will have a negligible effect on the environment.

For example, lest anyone think that the delay is out of pure love of Mother Gaia, let's tie this together with those who benefit from the current impasse, and why.

Warren Buffett is a major Obama crony and environmentalist opponent of the Keystone XL, and his Berkshire Hathaway Inc. acquired the huge Burlington Northern Santa Fe (BNSF) railway soon after the election of Obama, with lines running through both the US and Canada.  "With modest expansion," all new oil production could be handled by the railway through 2030, thus Buffett  makes megabucks as long as the XL pipeline lies dormant, through transporting oil acquired through his holdings in Conoco-Phillips petroleum.

Even more cynically, billionaire environmental activist and Democrat fundraiser Tom Steyer has bankrolled huge lobbying efforts and street performance art demonstrations to forestall the XL pipeline.  Yet where does Steyer get his money?  That would be through oil, gas, and pipeline companies such as Farallon Capital Management LLC.  Farallon is the parent company of Kinder Morgan pipeline company which is building the TransMountain pipeline that extends from Edmonton, Alberta to Kitimat, British Columbia.

The Canadians are developing their shale oil industry because they will see a major windfall to their economy thereby, and if the Americans insist on dithering away the opportunity to benefit as well, then Canada will be compelled to sell their bountiful product to the Chinese, who are eager to acquire it through their China National Offshore Oil Corporation (CNOOC).  So Tom Steyer, the Cassandra of the dangers of the Keystone XL pipeline, stands to make a fortune off his own pipeline in order to sell North American oil, otherwise available to the US, to China.  And just to grease the skids, CNOOC has acquired the Canadian oil and gas company Nexen, with the approval of the American Committee on Foreign Investment in the US (CFIUS).  The approval of the "multiagency group in Washington that vets significant foreign investment in the US" was required due to Nexen's large assets in the Gulf of Mexico.  (The same committee approved the Chinese acquisition of the remnants of A123 Systems, one of the green companies that went toes up in the same manner as Solyndra, leaving the taxpayers footing the bill.  Now the warning is that China will acquire valuable battery technology through the transfer.)

Toss in such cronies as Obama bundler Frank Brosens, whose Taconic Capital acquired six million shares of Nexen (Brosens was picked by Timothy Geithner to run TARP); Eric Mindich of Eton Park Capital Management which bought over 6.7 million shares of Nexen ($71,000 to Obama and $500,000 to Democrat candidates); David Shaw (up to $500,000 bundled to Obama, and a member of the President's Council of Advisors on Science and Technology) has up to 6.5 million shares.  Be sure to include Eric Holder, formerly a partner in Covington & Burling LLC, which was hired by Nexen to lobby on behalf of the acquisition.

The Manhattan Institute published a brief just last month that shows that pipelines are far safer than transporting petroleum products and natural gas by road or rail.  As if on cue, the rail disaster at Lac-Mégantic has illustrated, as if by the flames of the burning town, the cynical exploitation of the oil issue by Democrat cronies.

To paraphrase Lyndon Johnson, Obama might say that, while his bundlers are Fat Cats, "at least they're our Fat Cats."


  1. Wormtongue is the classic demagogue, managing the mob by giving it hate figures in the rich while taking their money for himself. He likes to think of himself as FDR, who also prolonged an economic collapse with a mix of higher taxes and proliferating regulations. As for the poor little town, it looks like the catastrophe was not an act of nature. But, then, the extreme Left, in the form of Communism and Fascism and the modern environmental movement, never has balked at killing people to get its way.

    1. It's one of those amazing things that the Democrats raise so much money, which has been enhanced by Obama refusing to adhere to the requirements of the FEC, yet claim that the Republicans are the "party of the rich."

      They wail about the Koch brothers, who are actually fairly benign other than through their contributions, but think nothing about George Soros. Of course, the press assists in this "hiding in plain sight" reporting.

  2. I hadn't thought of this angle before, in reference to the pipeline. It is always double word score when you can use the opponents own catch phrases against them. I'm rather fond of using 'pro-choice' in regards to 2A rights.

    Thanks also for the great run down of the entire pipeline issue!

  3. This comment has been removed by the author.

  4. (Oops -- wrong button)

    Pro-choice for the Second Amendment -- good one.

    I'll have to include that with the observation that those who profess to be wide open on the subject of the First Amendment, but only in respect to such categories as Robert Maplethorpe or freedom 'from' religion -- because after all, it's the Constitution -- want to emasculate or eliminate the Second. Isn't that in the Constitution too?


Comments are welcome and discussion is open and encouraged. I expect that there will be some occasional disagreement (heaven knows why) or welcome clarification and embellishment, and such are freely solicited.

Consider that all such comments are in the public domain and are expected to be polite, even while contentious. I will delete comments which are ad hominem, as well as those needlessly profane beyond the realm of sputtering incredulity in reaction to some inanity, unless attributed to a quote.

Links to other sources are fine so long as they further the argument or expand on the discussion. All such comments and links are the responsibility of the commenter, and the mere presence herein does not necessarily constitute my agreement.

I will also delete all comments that link to a commercial site.