THE BLOG
05/24/2011 06:00 pm ET | Updated Jul 24, 2011

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.