Sat
Mar 3 2012
11:14 am

If we listen to Sen Corker, he thinks that building the XL Keystone Pipeline will bring thousands of jobs, and he was one of the Senators that blasted Pres. Obama for rejecting the pipeline. Never mind that the Sen Corker continues to use vastly inflated numbers for employment.

But, something even more interesting popped up this week regarding the XL keystone Pipeline. via Bloomberg, the Keystone Oil Pipeline will RAISE gas prices. (I used caps for emphasis)

The Canadian plan was to use their market power to raise prices in the United States (UNG) and get more money from consumers,” Philip Verleger, founder of Colorado-based energy consulting firm PK Verleger LLC, said in an interview. Prices may gain 10 to 20 cents in central states, he said.

So, how will Sen Corker explain this? Will he double down? Or will he just ignore it?

cafkia's picture

http://bottomline.msnbc.msn.c

http://bottomline.msnbc.msn.com/_news/2012/02/27/10519685-why-the-keystone-pipeline-would-boost-pump-prices

This article goes into some detail about how/why the Keystone will raise prices.

Brian A.'s picture

I did not realize there was

I did not realize there was such a large price spread.

This, of course, belies the dopey claims by Gingrich and others that we could dramatically lower the cost of gas by drilling more.

Even if it were possible to wave the magic wand and produce another million domestic barrels per day, the oil companies will simply sell it to the highest bidder, in China or where ever.

Factchecker's picture

He'll double down.

He'll double down.

Factchecker's picture

b/c he works for big bidness

b/c he works for big bidness first.

Sylvia Woods's picture

OIL

I cannot figure out why we can't send oil from Alaska to Canada and keep the oil closest to USA. Then we would not have to build a big pipeline across areas where it is unwanted.

Can't see how we benefit by moving oil to Canada and then buying it back. Does Canada own the oil fields in our gulf region?

Factchecker's picture

Bush proved big oil favoritism doesn't matter

(--to paraphrase Cheney). Except for little speculator bubbles that may occur here and there, prices are all about world supply and world demand. All the added supply the U.S. could possible drill and produce would not be significant enough to change prices appreciably. In terms of demand, we may no longer be the largest consumer country, but we're still very large and I believe still by far the largest per capita. We could lower our demand and insulate us from this whole problem if we really wanted to, but it's easier to look to politicians who promise us we can have it all indefinitely, without sacrifice, at yesterday's prices. If only we elect them and go along with their policies.

CE Petro's picture

Factchecker, this isn't about

Factchecker, this isn't about a naturally occurring supply and demand. What this pipeline is set up to do is create a false supply and demand scenario, so that refineries can charge more. It's more Enronesque than it is about actual gas supply.

Factchecker's picture

I'll buy that, CE. I

I'll buy that, CE. I certainly wasn't trying to state that this pipeline would change supply/demand; just the opposite. Shuffling a shell game and telling people it changes supply/demand and thus pump price or that it allows oil to be bought from "our Canadian friends" instead of the mideast is just pandering BS, but it's amazing how many people buy into it.

Here's an excerpt from Kevin Drum at MJ, which I also wouldn't quibble with:

But here's the main takeaway: Demand for oil is pushing up against supply limits, and that's a permanent condition. From now on, demand is always going to be bumping up against supply limits because even if supply rises a bit in the future, demand is rising even faster. And when supply and demand are that tightly constrained, every small bump in demand or disruption in supply causes a big swing in prices. Last year it was the war in Libya that caused a price spike. This year it's Iran. But it's always going to be something. It doesn't take much anymore to produce a $30 swing in oil prices.

I saw a large Dodge Sprinter (actually Mercedes) van the other day with one sticker that said: Drill Here. Drill Now. Pay Less. and another sticker that had the Dodge Ram logo on it and said: Yes. It has a Hemi.

Then yesterday I saw a huge GM SUV in a handicap parking space sporting a Pray for America sticker.

We're doomed as long as we drive like a nation of testosterone-crazed teenagers who think Dad's credit card will never go away.

Factchecker's picture

It's the same kind of nonsense

P.S. I also understand the point of the linked articles about regional prices along the route actually rising. This is not the big picture, but it sure wouldn't surprise me at all and is just another reason not to trust the dirty bastards. Sorry if I hijacked your point.

CE Petro's picture

No you weren't hijacking the

No you weren't hijacking the point, I was overly focused on what I was pointing to. It's one thing when we reach a point in time when supply will no meet demand, and that must be addressed and not with building bigger vehicles. And at the same time, continue to educate folks into understanding the energy problems we are facing. Not that pointing out the facts as helped in the least little bit.

But I also think it's a pretty darn heinous act to hoodwink folks into believing "drilling here" is an answer to the supply/demand problems we're facing, or worse, supporting a pipeline that is built to specifically back-up flow to purposefully increase the price.

The Bloomberg article is just another tentacle of the large octopus (oil) in the room.

Somebody's picture

Cherry-picking

You know, if you want to criticize people like Corker for cherry picking information in order to justify a politically-based position, it's probably a good idea to avoid cherry picking info yourself.

The Bloomberg article does indeed point out that the Keystone pipeline would drain an over-supply of oil in the upper midwest, which would subsequently cause gasoline prices in that area to go up by as much as 20¢ per gallon in the area that currently is enjoying the extra supply. The same article also says that moving the Canadian crude south could lower the overall US average gasoline price by as much as 4¢ per gallon.

So a more honest reading of the article would be that the pipeline will likely create winners and losers at gas pumps regionally, and will have a fairly small impact on overall average prices. That leaves a legitimate question as to whether the pipeline would be worth the effort and environmental risks, and and if we wouldn't be better off putting most of our efforts behind policies to reduce demand in a big way rather than fiddling around at the margins on supply.

My point here, though, is that you undermine your arguments and your legitimate criticism of Senator Corker's use of information by cherry-picking info yourself. That seems to be the problem with partisan debates these days. Too many people seem satisfied to use carefully selected information to get the rhetorical win, rather than seeking out the whole story in an effort to find workable compromises and common ground. What baffles me most is when the full picture will still pretty much lead to a desired conclusion, but mitigating information is omitted nonetheless, because it would force an acknowledgement that the "other side" might at least have some legitimate points, thus making the rhetorical win less resounding and satisfying.

cafkia's picture

Who is the audience? I read

Who is the audience?

I read the linked articles. But I am fairly sure that among all Amurikkkans I am somewhat of an anomaly. I can and will read. An awful lot of us will not read past the headline, the bumper sticker. So You condense that Bloomberg article into bumpersticker size and see if it clarifies anything. At the $4 -$5 a gallon mark and higher, $0.04 is effectively $0. What that article is effectively saying is that the only noticeable effect of the pipeline will be for those folks whose pump prices rise and the fat cats whose pockets bulge even fatter.

At least that is my reading of it. YMMV

Somebody's picture

You're exactly right that too

You're exactly right that too many people won't read things through. Here's the end result. The post at the beginning of this thread points out, selectively, that the Bloomberg article says that the pipeline will raise prices at the pump, implying through omission that the effect will be to raise gas prices for everybody. Then the rhetorical question was asked about how Corker will explain that.

Well, if Corker were speaking at the downtown Rotary Club, and someone posed the question just that way, his response would be easy: "Well, yes, I've read that article, and it makes a point that in one region of the country where prices are comparatively very low, the gas prices may go up, but it also says in that same article that nationally, the pipeline will cause gas prices to go down. It's clearly in our national interest to approve that pipeline and get it built as soon as possible."

Game, set, match. Corker wins the argument because the question as posed was mostly spin.

If, on the other hand, a more honest assessment of that information was used to ask Corker: "Analysts indicate that the pipeline would actually cause gas prices in the midwest to go up considerably, and proponents of the pipeline can only suggest that the pipeline's overall effect on gas prices in the US would be a very slight decrease, at best. Wouldn't we be better served if people in your position placed a much greater emphasis on developing alternative energy sources, higher CAFE standards, and other efforts that will create high-tech American jobs and decrease demand for oil, thus lowering gas prices and reducing our dependence on foreign oil sources?"

Maybe it's just me, but I think that's a more honest assessment of the info in the Bloomberg article, and a much tougher question for Corker to sidestep.

cafkia's picture

Well by God if all you gonna

Well by God if all you gonna do is try to trap a good ole boy doing God's work for TN in the lion's den with gotcha questions and elitist talk, you can just shut the hell up!

Your question is an example of the problem. It is nuanced and valid and Corker would shut you down by laughing and he did not know he would need his thesaurus today. Or some other such down home crap that would have the assemblage laughing with him at you. if you can't (won't) answer a question, ridicule it and/or the questioner.

We should probably all give up and propose to split the nation officially into contiguous blocks of red and blue states. (we would have to booby trap the borders to stop them from sneaking in I bet)

Brian A.'s picture

That explanation makes a bit

That explanation makes a bit more sense.

What you're seeing is a push back from claims on the other side that this kind of thing will usher in $2/gallon gas.

Up Goose Creek's picture

Trainspotting

Last sunday was the first time I noticed a long train of freshly minted tanker cars rolling along the CSX tracks. So it is worth it to someone to get the extra supply out via train. There are pipelines that reach the upper midwest even now - I assume they just don't have the capacity to handle the current surplus.

Personally I think it is good for national security that we don't build a pipeline to quickly drain the oil out of N Dakota. Let's keep it there until we really need it.

Factchecker's picture

This is a war of politics, like it or not

What you're seeing is a push back from claims on the other side that this kind of thing will usher in $2/gallon gas.

That's what fires me up, even if it's tangential to the OP's point. A co-worker today advised me that there was a sticker seen on a local gas pump that stated the price of gas when Obama took office being something crazy like $2/gal. Yeah, that's what I remember Duhbya for, all that cheap gas he gave us.

Dave Prince's picture

http://news.consumerreports.o

jmcnair's picture

Gas prices over time

(link...)

Not exactly representational of Bush era prices.

Factchecker's picture

Maybe it's just me, but I

Maybe it's just me, but I think that's a more honest assessment of the info in the Bloomberg article, and a much tougher question for Corker to sidestep.

You do raise an excellent point, but this would require follow through in the way of someone actually asking a good question in front of the right audience. Wish I could be more optimistic about that.

Factchecker's picture

John's correct. I had looked

John's correct. I had looked up that chart from another source earlier today. I wasn't questioning whether gas got that cheap, which the chart shows that it did briefly, but rather pointing out the obvious (?) that it's disingenuous to represent as Obama's inherited price of gas, near it's minimum following the Bush crash and the global recession.

Factchecker's picture

Another link

gas buddy chart (switch to maximum # yrs)

Bush's proud legacy of the oilman Preznint it ain't.

Factchecker's picture

Ha!

In 2008, Fox News Explained—Accurately!—That Presidents Can't Lower The Price of Gasoline
By Matthew Yglesias
(link...)

Dave Prince's picture

Yeah, but that doesn't count

Yeah, but that doesn't count anymore because, um. Look over there!

Dave Prince's picture

Right, and all that is what

Right, and all that is what should be brought up to counter the "technically true" talking point instead of dismissing it as crazy. A momentary lapse of vigilance is all that's needed to score a "win."

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