Friday, March 23, 2012

If You Don't Have Anything Nice to Say, Come Sit Here By Me

Democracy Now! reported this morning that President Obama has announced his support for "the southern leg" of TransCanada's Keystone pipeline, to run from Oklahoma to Texas:
President Obama: "There’s a bottleneck right here because we can’t get enough of the oil to our refineries fast enough. And if we could, then we would be able to increase our oil supplies at a time when they’re needed as much as possible. Now, right now, a company called TransCanada has applied to build a new pipeline to speed more oil from Cushing to state-of-the-art refineries down on the Gulf Coast. And today, I’m directing my administration to cut through the red tape, break through the bureaucratic hurdles, and make this project a priority, to go ahead and get it done."
I thought I'd done a cynical post when Obama rejected the Keystone XL Canada-to-Texas pipeline, to predict that he'd back down very soon; but it seems I didn't. What I wonder now is how many liberal Democrats will attack him for pronouncing "oil" as "ole", the sort of thing he usually does when he wants to sound populist. (The video clip is accessible through the link above.)

What Obama didn't mention was that those "state-of-the-art refineries" are in what's called a foreign-trade zone in Port Arthur, Texas, and that the oil they refine will be shipped to Asia, not to retailers in the US.
At a congressional hearing in December, [Representative Ed] Markey asked the president of TransCanada if he would agree to allowing Keystone XL oil and its refined products to stay in the U.S. He said no. So Markey then proposed an amendment to that effect, and Republicans said no—that it couldn’t be done, because the market for oil is not just domestic; it’s global. What Canada wants to do, says Markey, “is create a connection between Alberta and Asia and use the United States as the place where the pipeline gets constructed. And so if that’s all we are is a middleman in this transaction, then the American people should know that.”
Either the President doesn't know this, in which case he's incompetent, or he does know, in which case he's lying about the benefits that the Pipeline will bring to Americans. (Of course, by "we" and "our" he might just mean "American oil companies and the politicians who get campaign donations from them." I wouldn't rule it out.)

There's another aspect of this issue that shouldn't be ignored: Obama's supporters and apologists have been arguing that the President doesn't control oil prices in the US. Even I, who am not an Obama supporter, have been saying this to people who attack Obama for not approving the pipeline. But what Obama is saying now is that he does have at least some influence, if not control, over oil prices, and that by taking this action he'll help to drive them down. FAIR did a segment on this week's Counterspin investigating this very point.) Considering how dishonest Obama's line on the pipeline is, I don't think anything he says about it should be believed: he's on the campaign trail, after all.

One of the strangest things about some of Obama's critics on this issue is that they've been hinting -- they refuse to say it outright when I challenge them -- that Obama secretly wants gas prices to rise, in the service of an undefined agenda. But it's the oil companies, and the speculators who deal in oil futures, that want oil and gasoline prices to go up: that's where their profits will come from. Obama's right-wing critics are oddly reluctant to admit that explicitly.

There's also reason to believe that oil prices will continue to rise no matter what the government does. There is still a lot of oil under the surface of this planet, but it's not as accessible as the oil we drilled before was. Offshore drilling requires expensive, high-tech equipment to get at the oil far beneath. Tar sands oil is also more expensive to get at and process. The costs of those technologies will be passed on to the consumer in high prices at the pump; that's what capitalism is all about.