Weighing Risks on the Keystone XL Pipeline

Much controversy has surrounded the extension of the Keystone pipeline from the oil sands region from Alberta, Canada to the Gulf Coast to the refineries in the Gulf region (the current Keystone pipeline extends from Hardisty, Alberta to Steele City, NE). Opposition to the extension of the pipeline has included arguments that wildlife habitats will be disturbed, carbon emissions will further increase worsening global warming, and the jobs it claims to create will not exist. However, these objections need to be weighed against the risk of keeping our dependence on foreign oil, especially on countries like Saudi Arabia.keystone poster

In 2007, the U.S. Department of Economics reported that about 23% of the United States’ imported oil came from the Middle East. While 23% may not seem like a large number, when one takes into account the instability of the Middle East, and how prone it is to wars, 23% is a large percentage to be reliant upon.

Here is a hypothetical situation; say there is a war that engulfs the entire Middle East, effectually ending their ability to export oil. The price of crude oil would go up at least 23%, not including other market factors and investor reactions. Estimate oil to be at $100 a barrel when the flow of oil would stop. The new minimum price of crude oil would likely be $123 per barrel. With a slowly recovering economy (or so we are told), is it really a good idea to be placing 23% of our oil energy dependency on a region that is so historically volatile and war-prone?

Let’s look at a real life situation: in 2011 the solar energy company Solyndra went bankrupt due to its inability to compete with other solar panel companies, and due to the expense of producing solar energy panels. President Obama and many of his supporters are all heavy advocates for “clean energy” to reduce carbon pollution and stop global warming. However, if solar energy did not become a major industry in the Capitalist market, why would it fare any better when the government subsidizes it? The Capitalist market will always use whatever energy method is the best; currently, the technology is not available to produce energy on the scale that is currently done through oil. Limiting the country’s ability to use and produce crude oil in the hopes that “clean energy” technology will expand and take over is an utterly foolish strategy.

A counter to the objections of the environmentalists is that they are putting the welfare of flora and fauna before that of humanity. It is almost as if they would rather have the wildlife than the human race. Almost everything done by man has affected earth in one way or another. We are supposed to be good stewards of our planet, but that does not mean we should deprive ourselves from use of the resources our planet provides us with. Let me present this to organizations like the EPA: who is more important; the flora and fauna in the Mid-West, or hundreds of millions of Americans who could certainly use lower energy costs to improve their living?keystone pipes

With the expansion of the current Keystone pipeline, oil sands from Alberta, Canada, and new oil from the shale in the Bakken region in North Dakota and Montana would reach refineries in the gulf, thus increasing the supply of oil available to consumers. Estimates range up to 1 trillion barrels of crude oil could be in the Bakken region. That would be more than enough to export, and power all the United States for who knows how many decades.

Keep in mind that a major reason for increasing food prices is the increased cost of transporting them from the factory or warehouse to the store. Lowering energy costs can enable trucking and rail companies to reduce their rates, thus passing it on to the grocery stores, who in turn can pass it to the consumers.

When energy rates are high, all products that are shipped in any way will be affected. FedEx, United States Postal Service, railroads, trucking companies; they all have to ensure that their cost for delivery is met, and when energy prices go up they have no choice but to raise their rates. It only makes sense to enable more oil to be refined domestically for use in the United States rather than continuing to import oil from the volatile Middle East or countries like Venezuela where the people are living in the third world while the government is living the life of the 1%.

Environmentalists will still argue that bringing this oil into domestic production will harm the carbon emission levels. Quite frankly, even if the Keystone pipeline is not approved for extension, Canada will still harvest the oil with or without the United States. If they have to, they could go west and sell the oil to China, who would gladly take it away from the United States.

According to an IHS Cambridge Energy Research Associates report, the biggest beneficiary of blocking the Keystone XL pipeline would be Venezuela. Much of America’s oil imports come from there, and blocking domestic oil production and refining simply means that Venezuela would continue to be the major producer of oil for America. From a patriotic point of view, why would you support a Socialist regime over the hard work of the American oil industry?america infrastructure work boot

In a simple address to the president, I say that this pipeline should be approved, and if the recovery you claim that is happening is to continue, energy independence from foreign nations must come first. If we can secure our energy needs for even the next 50 years, other technologies will have had time to develop and new methods will most likely have been found to create renewable, clean energy. But in the meantime, do not restrict America’s ability to fuel its energy needs, and speculate on historically disproven ideas of “clean energy.” We are not there yet; do not stifle our ability to power America’s future.

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