Drain, Baby, Drain

The House Republican leadership has a new demand for the Obama administration: Raise gas taxes in the Midwest by 30 cents a gallon. Whoops, not quite. They only insist that the Administration raise gas prices in the Midwest by 30 cents. Raising taxes is a big Republican no-no.

But the oil industry knows exactly how to raise prices without a tax hike. And the GOP is supporting these industry maneuvers to make fuel more expensive. In fact, this week, House Republicans started demanding that the Obama administration rush regulatory approval of the biggest energy scam in the country -- the Keystone XL Pipeline.

This country has no shortage of controversial energy projects but the Keystone XL Scamline is in a class by itself. It has been and continues to be sold as a project that will increase supplies of Canadian tar sands oil in the United States. In fact, it is designed to reduce supplies of tar sands oil to Midwest customers. That's because the Koch Brothers and others who profit from tar sands oil are tired of the fact that gasoline in Missouri costs only $3.67 a gallon, while it is $4.07 in New York and $4.09 in California.

The problem is simple: too much supply and not enough demand for maximum profiteering. The answer is to increase demand, not by building more pipeline capacity into the United States, but by building new pipeline capacity out of the country via the Gulf ports. This goal is hidden in plain sight, a bit like the purloined letter in Edgar Allen Poe's famous mystery story.

If you wanted to bring more tar sands oil into the United States, you would begin by building the pipeline segment that crosses the border. But that's not Keystone's plan. Instead, they will first build the segment from Cushing, Oklahoma, to the Gulf Coast for shipment to wherever the price is highest. And the major competitor to Keystone XL doesn't even pretend to be bringing more oil to the United States -- they openly admit to wanting to build just the segment from Oklahoma to the Gulf.

For months the backers of Keystone XL have repeatedly presented their plan as one that will increase U.S. energy security by bringing us more filthy tar sands oil. In reality, it's a scam. The United States gets the water pollution risk to our largest source of agricultural water, the private property expropriations in Texas, and the air pollution around the refineries -- plus gasoline prices that may run $0.30/gallon more than they otherwise would. Koch, Valero, and their allies get higher profits and greater volume along with premium access to the highest-priced world markets. Yet none of these impacts have been assessed in the documents sitting before the Obama administration.

Some are beginning to cop to the play. Landowners in Texas are fighting back. Nebraska senator Mike Johanns, otherwise a rock-ribbed conservative, has broken with his party to demand a better route. Oregon senator Ron Wyden is looking into the likelihood that Keystone XL is an example of oil-industry price manipulation. And in Monday's House Commerce Committee hearing on Keystone XL, Democrats raised the issue of who is really going to benefit: the American people or Koch Industries?

This has got to be the biggest energy scam going. It's not drill, baby, drill anymore. It's drain, baby, drain.

 

 

 

Follow Carl Pope on Twitter: www.twitter.com/CarlPope

Comments

[NoMoFearNoMoHate]

02:01 PM on 05/26/2011

It should be mandatory that a resource be used to meet ALL local demand before then wasting energy to export that resource for profit elsewhere. Not a single drop of oil or any other resource should have to travel farther than meeting the closest demand for it. Anything else is simply a waste.

[bill hufflewhite]

02:39 PM on 05/25/2011

The supply and demand of oil is on a global stage. The daily and weekly supplies and demands worldwide are what can partially influence pricing. The United States already gets a majority of it's oil from North America. The pricing of oil is also influenced by market speculators. Movements of oil in and out of the U.S. will not change the price. Also, gasolene is higher in NY and Calif. due to extra taxes.

[Greybeard53]

09:16 AM on 05/26/2011

None of what you post addresses the fact that Midwestern sand oil would cost less to the American consumer if it was forced to STAY in America, or at least if its escape wasn't publicly subsidized!

[bad spelling grammar]

02:32 PM on 05/25/2011

There will be a lot of people disagreeing with this article due to their lack of knowledge about business and American politics. People who oppose this article will point out how they only know a few memorized statements they learned from oil friendly politicians that dead end anytime you present them with the truth of what is really happing with this pipeline and the rest of the tar sand industry/ gas taxes in America. If you do plan on opposing this article please provide any EVIDENCE that stats what the author said is wrong before you waste everyone’s time with your opinion.

[bgreen152]

02:30 PM on 05/25/2011

Another screwing for America brought to you by Koch campaign finance.

[Mikeystyle]

12:41 PM on 05/25/2011

another example of oil price maniuplation: the CFTC has charged oil traders over the 2008 speculation bubble.

http://thinkprogress.org/2011/05/24/cftc-charges-oil-traders/

[skeptic406]

12:30 PM on 05/25/2011

I couldn't agree more. If this had anything to do with increasing available oil for the US, a pipeline from Canada to a refinery in under-populated Montana would solve all the problems. What is clear is this has nothing to do with energy independence from Middle East suppliers.

[TheRedMantis]

11:25 AM on 05/25/2011

Thanks Carl.

With the three branches of Americas government firmly in their grips, Big Oil and the Super Rich do as they please.

Props to Mike Johanns and Ron Wyden for displaying backbone.

What more can be done?

[morelefteveryday]

10:47 AM on 05/25/2011

Thank you for this article....Just another reason to quit subsizing all energy and let the free markets decide the way forward....

[obviousman88]

01:05 PM on 05/25/2011

If only there were free markets. Speculative capital, oligopolies and monopolies have pretty much destroyed free markets.

[texasprogressive]

10:05 AM on 05/25/2011

Write your congressperson and demand they shoot this project down once and for all. The Kochs don't need any more of our money.

[jefke]

03:44 PM on 05/25/2011

But they really really want it.