I read a lot about the Keystone Pipeline and see misunderstandings from both sides. I’d like to put this issue into perspective. The Keystone pipeline is not unlike a one-way bridge between Canada and the US. Approximately 700,000 barrels of oil would be imported daily. We know environmentalist hate fossil fuel oil despite their continual use of it in their daily lives. We know some conservatives want the oil to only go to Americans despite belief in supply and demand, and many others want us to only use domestically produced oil. That aside, I want to address it as an economic issue. The dollar value of the imported oil is about $70 million per day. That equates to an import value of about $25.5 billion each year flowing into the US. Texas has the existing multi-billion dollar refineries, designed for Venezuelan oil, that can handle the heavy Albertan crude. Now if transporting and refining of the oil adds 50% of value to the product, the export value becomes $38.3 billion. That’s a net gain of $12.8 billion per year regardless of where the oil goes. If at least 40% of the gain goes into taxes the local, state, and federal coffers are increased by $5.12 billion. Why don’t progressives want the private sector to provide more tax money and union jobs?
Albertan oil will be produced, that’s not in question, the Canadian economy is dependent upon it. Where it goes is to be decided. If US environmentalist have their way, it won’t come to the US. Okay, let’s go with that premise, and we’ll exclude the value of building the pipeline itself. The $12.8 billion extra value will go to China or Canada, not the US. That means we won’t have the $5.12 billion in tax revenue, or said another way, we won’t be able to fund 51,200 teachers each year. Undoubtedly, China will refine the oil themselves if we give them the chance and savings will give them that much more with which to purchase US and Canadian resources.
Should America be expanding its domestic oil production? Absolutely. We have to start balancing our budgets and can only do that by producing products and services. But taking on the added role as petroleum refiner doesn’t preclude that.
Would progressives have the same mantra of preventing resource development if Canada wanted to build a railroad to ship iron ore to Texas, which then smelted it and made steel, and then exported it to China? Is there that much difference?
Okay, let’s now discuss one of the environmental issues. We know Canada is moving forward with developing oil sands. Can it be done cleaner? Yes. New technology has been developed to recover more oil and emit less pollution, and it’s possible this same new technology will work with US oil shale. Ask yourself this – which country would emit less air pollution in refining the heavy oil – China or the US? Regardless of the money we can make off China in selling them refined products, wouldn’t it be wiser for the US to use its superior air emissions technology in refining rather than being downwind from China with even higher emissions?