We are told that the Keystone pipeline had to be cancelled for environmental reasons. “The Permit is hereby revoked,” Biden’s executive order says. “Leaving the Keystone XL pipeline permit in place would not be consistent with my Administration’s economic and climate imperatives.” Now that’s a very powerful statement, but what does it really mean? Is there a well thought out plan, or is this just more corruption from a man known to deliver if the money is right?
Economically, this cancellation will increase the cost of oil-based products to the consumer. Instead of piping this crude to refineries (830,000 barrels a day), the same amount of oil will have to continue to be shipped by rail and truck to its final destinations. It is estimated that the cost for this type of delivery system is approximately $10 per barrel, as opposed to $5 per barrel using the now defunct pipeline. It is hard to imagine that killing the pipeline was done for economic reasons, unless there is an alternate energy source that is cleaner and competitive with oil.
Could it be that windmills and solar are the answer to our future energy needs? Both are intermittent power sources that require intensive capital investment and are highly unreliable. It is estimated that power from these sources can only be counted on at peak demand 30% of the time, and hundreds of millions of acres of land would have to be devoted to the construction and maintenance of these forms of “green energy”, not to mention the massive amounts of raw materials required for production of these alternate energy sources. Further, it would cost us at least 10X the amount we currently spend on energy to switch to these alternative sources, so it doesn’t look like this is a sane approach to economic issues in our country. Short of green lighting nuclear power, it doesn’t look like alternate energy sources will ever make the cut with the state of our current or foreseeable future technology.
For climate imperatives? It is estimated that the earth has warmed approximately by 1 degree Celsius since the start of the Industrial Revolution, which began in 1760, or 260 years ago. We also know that the earth cools and warms as natural cycles over thousands of years. Is global warming a natural cycle? Or is global warming affected by human influence? What does the science say? Both may be true. In the natural cycle, the world can warm, and cool, without any human interference. For the past million years this has occurred over and over again at approximately 100,000 year intervals. About 80-90,000 years of ice age with about 10-20,000 years of warm period, give or take some thousands of years. There is healthy debate about human interference with this cycle, and the science is far from settled. The left would let us believe that in fact the science is settled, and hydrocarbon usage with its CO2 emitting is the direct result of warming we are experiencing. If that is true, and there is a load of empirical evidence that it is not, a case could be made that cancelling the project was done for environmental reasons, especially if the goal of zero CO2 emissions by 2050 is the goal that will solve the supposed human caused problem with global warming.
Maybe taking President Biden on his word is not the best way to understand why he cancelled the project, or for that matter why he has signed 40 executive orders in the first 9 days in office. Could there be another reason for his race to change things? Focusing on the pipeline, who would benefit most from the cancellation? Could it be Warren Buffett, Berkshire Hathaway, and the Burlington Northern Railroad? Currently, the Burlington Northern Railroad ships 100% of this oil by rail to destination, and it is a very profitable run for this business, as they are the only line that ships this oil to refineries. This business is owned by Berkshire Hathaway, a holding company controlled by Warren Buffett. Berkshire Hathaway also owns the company that produces oil tankers for rail, and has a virtual monopoly on this business. Warren Buffett donated $250,000 to Democrats on the 2020 election cycle. Other mega-donors, including CEO’s of fortune 100 companies donated millions to the Democrats and the Biden campaign, and were opposed to the pipeline. Could it be that Joe Biden is still playing the “pay to play” scam in the oval office? What about the other executive orders? Will we ever know?