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Big Oil Bullies and a Test of Wills

Posted: 01/16/12 12:58 PM ET

In November, President Obama listened to the nation's top climate scientist and to bipartisan voices along the route of the proposed Keystone XL tar sands pipeline from Canada to the Gulf of Mexico, and declared that the project required further review. After all, the Keystone XL's predecessor (another tar sands pipeline just called Keystone) had leaked a dozen times in its first year. Tar sands oil is highly toxic, dangerous to transport, and almost impossible to clean up. In Canada itself, strong public opposition has delayed tar sands pipeline proposals for additional environmental review and public comment. 

But that kind of prudence didn't sit well with Big Oil, which is used to getting its way. (Remember, it was lax regulation that allowed BP to drill a shoddy, dangerous well in the Gulf of Mexico that they didn't even know how to cap when it exploded.) So Big Oil rolled out its army of lobbyists and PR experts -- among the most elaborate and expensive lobbying operations in America. The head of the American Petroleum Institute publicly promised "huge political consequences" if President Obama doesn't grant immediate permission for the pipeline. More saber rattling followed in TV ads and from the most powerful business lobby in Washington, D.C., the U.S. Chamber of Commerce (which is bankrolled largely by... Big Oil).

They didn't just issue threats. Big Oil also commanded its $12 million posse in Congress to get to work. The minions rallied to the call, promoting Keystone XL as a top cause célèbre for 2012. House Speaker John Boehner kicked things off by holding the paychecks of working Americans hostage to a rider to the Payroll Tax Cut package in an attempt to force Keystone XL through.

That legislative rider has imposed a 60-day deadline on the president's decision, despite the inadequate and incomplete review, and despite the lack of a route through Nebraska. Any permit issued now would be a blank check written to an oil company with a proven record of disregarding the rights of the American farmers and ranchers whose land the pipeline would cross and threaten.

Given the billions in oil profits that are at stake, none of this should be surprising. But since few Americans actually care about increasing the oil industry's already bloated profits, its lobbyists have also been working overtime to sugarcoat the Keystone XL project with exaggerated promises of jobs. It's a smart, if cynical, tactic. Everyone wants jobs. Unfortunately, this pipeline would generate far fewer construction jobs than promised and only a few hundred permanent jobs.

Look behind the curtain and the real story here is the $2 billion to $3.9 billion more in profits each year that Big Oil would collect simply by being able to raise gas prices in the Midwest by between ten and twenty cents -- hurting Americans and chilling economic growth. Meanwhile, the Canadian crude being pumped 1,700 miles across six states, through farms and ranches, and directly over the water supply for millions of Americans would actually be destined for export from refineries in a Texas free-trade zone -- meaning billions more in oil profits that American workers would never see.

What Americans would see and experience is the pollution. We would be opening a Pandora's box of climate pollution. We would be threatening the fragile drinking water supplies for millions. We would be putting the livelihoods of American farmers and ranchers in six states at risk. And all the while, oil companies alone would reap the profits -- which they'd largely keep in exorbitant salaries and stock bonuses, minus their continued investment in political influence.

By any objective measure, the Keystone XL pipeline is a patently bad idea that could never withstand rational scrutiny. Ultimately, this is a test of wills. Can the president stand up to threats from the wealthiest industry in the world? Big Oil has the money to inflict serious damage on anyone who challenges its singular goal -- profits. If President Obama does the right thing, he will also be doing a brave thing. But it would also be the smart thing: Standing up to bullies is, in the long run, almost always a good call. 

We are hopeful, confident even, that the president will put the American people before Big Oil's profits. And we're also hopeful that Americans will start demanding far better from their Congress by insisting that our representatives stop selling their votes for campaign contributions. It's time to separate oil and state.

We need to break our addiction to oil, and we need to get oil companies out of our politics. Now that Big Oil has thrown down the gauntlet with Keystone XL, President Obama has a remarkable chance to start accomplishing both of those goals.

 

Follow Michael Brune on Twitter: www.twitter.com/bruneski

In November, President Obama listened to the nation's top climate scientist and to bipartisan voices along the route of the proposed Keystone XL tar sands pipeline from Canada to the Gulf of Mexico, a...
In November, President Obama listened to the nation's top climate scientist and to bipartisan voices along the route of the proposed Keystone XL tar sands pipeline from Canada to the Gulf of Mexico, a...
 
 
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01:53 PM on 01/18/2012
Until cost effective alternatives to fossil fuels are introduced, our economic reality is that we will continue on our present path.

We have been arguing at length over whether we "need" to reduce or eliminate our dependence on fossil fuels, but in the absence of a national program to develop alternative energy, and with no private sector business stepping up to do so on a large scale, consumers and businesses are not being provided a real choice.
HUFFPOST COMMUNITY MODERATOR
JScott
John Galt's last name is McGuffin-Smithee
09:12 AM on 01/17/2012
Hmm why does this pipeline have to go to the Tx Gulf Coast......so we can export the oil to points south? Kinda like when the Alaska pipeline ended up exporting a lotta that oil to Japan?
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HUFFPOST SUPER USER
Robert Lee Harrington
There's still time to change the road you're on...
08:27 PM on 01/17/2012
The Texas refineries (Koch, Valero, etc) are set up with special processing needed to refine Tar in diesel fuel. They are on the Gulf Coast to allow the diesel to be loaded on Tankers. The destination is Europe and Latin America. Because they are in an "Enterprise Zone" they pay no export taxes.
There is another pipeline (Enbridge Northern Gateway) to ship Tar to the BC Coast for export to China. It is under review, held up because Canadians don't want it either.

http://www.northerngateway.ca/project-details/route-map/
12:34 AM on 01/17/2012
I don't understand why greenies think that "big oil executives" are out to destroy the world in order to line their pockets at the expense of the enviornment and their fellow americans. Unless they somehow came friom outer space and plan on returning there with their families and "ill gotten gain", they and their children must live in the world they creat....Ii am sure they all know this so, if we follow the greenie logic, all these guys must be completely out of their minds, for, by "killing" the world ,they kill their futures and those of their decendance. Does this make any sense??
Sure there are risks to what they do...but these men have proved they can handle the worst case senerios over and over in the past and, where there is a dispute over what they do, then it is up to the government to enforce enviornmental laws.
there is no room in this proceedure, nor should there be, for rabble rousing greenies whose only knowledge on any subject is how to manipulate the media for their own gain..
03:21 AM on 01/17/2012
>I don't understand why greenies think that "big oil executives¬" are out to destroy the world in order to line their pockets at the expense of the enviornmen¬t and their fellow americans.<
No one thinks oil execs are 'out to destroy the world', but isn't it obvious that they are mainly if not exclusively out to line their pockets, and they don't care about collateral damage unless it affects their bottom line?

>Unless they somehow came friom outer space ..., they and their children must live in the world they creat.... Does this make any sense??<
Perhaps you mean, “Unless they somehow live in another part of the country”...? I’ll bet dollars to donuts that no big oil exec lives anywhere near the proposed pipeline. And yes, it makes perfect sense: people are greedy and they can easily rationalize the suffering their actions inflict on strangers.

> Sure there are risks to what they do...but these men have proved they can handle the worst case senerios over and over in the past…<
You cannot possibly be serious. BP…? Exxon Valdez…? Apparently you have internet access, try doing a Google…
The basic problem is that they are not personally exposed to the risks. If the oil executives and other advocates agree that if there is any spill then the equivalent amount of tar sand oil shall be directly dumped into their living rooms, then let’s build the damn thing.
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KarlaElisa
The atmosphere is Toxic
11:02 AM on 01/17/2012
these wealthy men are narcissists and psychopaths. if you don't think lining their pockets with greenbacks isn't first and foremost on their minds, environment be dmned, you're not really examining them and their agenda close enough. and i'm sure more than a few do know what they're doing is destructive. but ego, power and wealth are a cocktail that allows them to overlook the hangover.
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NWBrunette
Blessed Girl
12:35 PM on 01/18/2012
Well said.
10:50 PM on 01/16/2012
"Unfortunately, this pipeline would generate far fewer construction jobs than promised and only a few hundred permanent jobs."

It's amazing how the elites of country can scoff at the addition of a a few hundred jobs and thousands of temporary jobs. Back in reality, 15% or 16% of Americans are underemployed.
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artleads
Let's have a national retreat.
11:13 PM on 01/16/2012
Keystone XL would actually LOSE American jobs overall.
11:29 PM on 01/16/2012
Sure it would. Every time you start a massive construction project, that employs thousands, jobs are lost....if you ask an environmentalist.
10:29 AM on 01/17/2012
Not true, basic logic says someone has to build the thing right? People have to process, test, store, and ship all that oil right? You have a massive increase in oil that needs to be processed but there will be "less" people to do it? Really?

Even if the only extra jobs were the pipeline, we need those jobs, nobody knows how long this mess will last but we have record unemployment right now, easy for an environmentalist to say turn away jobs when they don't need that job.
10:40 PM on 01/16/2012
What the American people need is jobs, not more excuses for killing jobs. With current environmental laws it is doubtful that any harm could get very far before the all powerful EPA dropped the hammer.

Can we really be this picky? America is broke, we are living on credit cards and we can't keep this going for much longer. For every person we get back to work that is also a person off welfare and unemployment and paying taxes, that means we get three times the financial benefit from that same person.

I can appreciate how many people see oil and other products as bad for the environment, but this is easy for you to say when you have a job and can feed your family. It is easy to say we should force Americans away from oil when you can afford the more expensive alternatives while the poor can't. Imposing this kind of radical environmental agenda hurts all the poor people in America Obama and his fellow Liberals claim to be trying to protect.
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artleads
Let's have a national retreat.
11:17 PM on 01/16/2012
Keysone would result in an overall net LOSS of jobs. We certainly can't afford that either. And the same people who watered down and almost killed the stimulus bill that would have insulated homes of poor people now say that we must suffer the dangers of the dirtiest oil on the planet because it will help poor people. How ironic.
07:14 AM on 01/17/2012
Just how do people believe there will be no jobs? Thousands of workers will be involved in just the construction, then after construction there is the massive amount of oil that needs to be processed, do people really believe people will not be involved in all areas of the process?

Poor people can't afford the most expensive alternatives, so far the only think making alternatives look viable are Government funds, if you made them stand on their own they would cost twice as much as oil products.

Insulation? First of all there was not enough money in the stimulus bill to properly insulate even 10% of the homes of the poor, secondly, insulation helps but windows are usually the gigger cause of heat loss in the north, adding a little more insulation would not have helped the poor deal with 2 to 3 times the heating costs caused by something like cap and trade.

So you believe it is okay to hurt the poor because you do not like oil? The feelings of a few liberal thinkers is enough to hurt every poor person in America and make them more poor? You guys love to talk about greedy businessmen but at the end of the day it is Government mandates that drive away jobs and fo9rce the price of products to skyrocket. Insurance has risen over 30% for most people because of the new mandates inposed by Obama. That hurts the poor too.
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JScott
John Galt's last name is McGuffin-Smithee
09:15 AM on 01/17/2012
Sorry but this crap about 'it'll create jobs' doesn't work, corporations are all about making money not about 'creating jobs'. And besides enviromental regulations only cost about .5% of the cost of a product or service that's far less than what's spent on marketing and advertising and oh yeah executive compensation.
10:23 AM on 01/17/2012
Why? The pipeline has to be built right? Does it spring from the ground by itself? There is a couple thousand jobs right there and after it is built, who is processing, storing, testing, and shipping all this oil? Gnomes? Of course there will be more jobs but more important, a connection to more "non-middle east oil". If we can find alternatives that are viable, it will be many, many years before all people can afford them and buy them but what do we do in the transition time when the middle east sees the trend and jack up their prices to get as much money as they can for as long as they can?

Talk about hurting the poor. They will be the last to afford the newest technology and the last stuck buying gas and oil products at the inflated prices. Having a greater access to oil products here will help protect the poor from this mess.

It is the environmental penalties if they mess up that I am talking about, the EPA is a monster and any mess created will be like a sledgehammer to a lemon, there is no doubt that they will be very careful because like you say, it is business, and making money is the point. How can they make money with the EPA ripping them apart at the seams if they mess up?
oilfield
small manufacturing business owner
10:21 PM on 01/16/2012
folks in the oil business are going to make money either way.....if it doesnt come to the us it will go somewhere, and when iran or the next dictator decides to turn off the valve, we wont have the infrastructure to be self reliant. this is about american independence from a friend not a foe.
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artleads
Let's have a national retreat.
11:19 PM on 01/16/2012
That's why we must stop fighting the new infrastructure, why we must begin building that NOW, while we still have oil.
10:34 AM on 01/17/2012
There is no new infrastructure. What do you believe we can turn to instead of oil for the masses? Sure electric cars "sound" good but they are not viable for most Americans (the poor can't afford electric cars for example). Bio fuels can't compete without Government help and their actual cost is much higher than oil products.

We do not currently have any large scale replacement for oil so it stands to reason that until we at least have something that can take it's place, we should be doing everything we can to secure as much oil production and supply as we can.
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Gupdiver
Why are you expecting money for nothing?
09:43 PM on 01/16/2012
We have no energy plan, but an excess of natural gas now thanks to new drilling technologies but the current administration is not taking advantage of its surplus and low prices. Why build a pipeline for Canada when we should be shifting to natural gas? It's a better alternative for us and better for the environment until green energy alternatives are cost effective.
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09:18 PM on 01/16/2012
All of the oil within our country is exported & sold on the world market. We have to buy back our own natural resources from oil companies and we pay them with tax credits to do so. Every time some politician talks about drilling for oil in Alaska or the Everglades, they fail to mention one little detail : all of the oil goes onto the international market first. And, even worse, a new pipeline carrying foreign oil across the heartland, so it can be refined in Texas, & shipped out on tankers in the Gulf. It's the cheapest way for the oil companies. Like a bell to Pavlov's dogs.
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Josh Crawford
Just the facts, man!
09:07 PM on 01/16/2012
Effect on Price of Oil in US:
Here's a little something you don't hear the Republicans and proponents of this project talking about: TransCanada, THE COMPANY BUILDING THE PIPELINE, has said that this project will actually INCREASE the price of a barrel of oil in the USA! Don't believe me? According to a Feb 2011 story from Reuters: http://www.reuters.com/article/2011/02/10/idUS292515702420110210

"Although the pipeline, if approved, would increase the supply of oil reaching the U.S., a 2009 market analysis conducted by TransCanada, builder of the pipeline, forecast higher prices. The analysis, which TransCanada conducted as part of its Canadian permit application, projected that prices would increase about $3 per barrel as a result of the pipeline.
That would send at least an additional $2 billion from American consumers to Canadian and multinational oil interests, despite the increase in supply."
Now do you believe me? In addition to this fact, the project will greatly benefit the dastardly Koch Bros who own businesses that "already import and refine 25 percent of oil sands crude reaching the U.S." according to the same story in Reuters.
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Josh Crawford
Just the facts, man!
09:05 PM on 01/16/2012
According to a study by the Cornell University Global Labor Institute:
“» The construction of KXL will create far fewer jobs in the US than its proponents have claimed and may actually destroy more jobs than it generates.
» The industry’s US job claims, and even the State Department’s analysis, are linked to a $7 billion KXL project budget. However, the budget for KXL that will have a bearing on US jobs figures is dramatically lower—only around $3 to $4 billion.
» The claim that KXL will create 20,000 direct construction and manufacturing jobs in the US is unsubstantiated. There is strong evidence to suggest that a large portion of the primary material input for KXL—steel pipe—will not even be produced in the US
» The industry’s job projections fail to consider the large number of jobs that could be lost by construction of KXL. This includes jobs lost due to consumers in the Midwest paying 10 to 20 cents more per gallon of gasoline and diesel fuel. These additional costs ($2 to $4 billion) will suppress other spending and cost jobs. Furthermore, pipeline spills, pollution and increased greenhouse gas emissions incur significant human health and economic costs, thus eliminating jobs.
Put simply, KXL’s job creation potential is relatively small, and could be completely outweighed by the project’s potential to destroy jobs through rising fuel costs, spill damage and clean up operations, air pollution and increased GHG emissions.”
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DoctorJohn
Little blue boat in a big red ocean
09:03 PM on 01/16/2012
With all the big oil lobbyists and PR toadies on the Keystone XL payroll, the next thing you know the public will be bombarded with a "feel good" clean tar sands media blitz.
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lisakaz2
Da ministero dell'interno di Snark.
08:20 PM on 01/16/2012
What also needs more airing is how eminent domain has been wielded by Big Oil here against the American ppl. We the People need to be forceful in saying "NO" to them for once. And have it stick.
oilfield
small manufacturing business owner
10:22 PM on 01/16/2012
the supreme court says a higher tax base is enough grounds.
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ClimateHawk
Think before posting.
07:37 PM on 01/16/2012
Do not rely on Patrick Michaels to give accurate information about the climate ...

... the following article shows how he downplays global warming by leaving out data ...

http://thinkprogress.org/romm/2012/01/16/404832/cato-patrick-michaels-serial-deleter-of-inconvenient-data/
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killarneytim
Just common sense;not L or R
07:28 PM on 01/16/2012
"Big oil's bloated profits" Really? In fact AT&T is more profitable than big oil.

"Raise mid west oil prices " How? The oil is to go to the gulf coast and be refined and exported. How does this mean fuel prices go up in the mid west?

Yes big oil has a powerful lobby. So do many other groups Look at sugar. The industry benefits less than 100 taxpayers, yet we all pay more for their favors and protections.
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lisakaz2
Da ministero dell'interno di Snark.
08:22 PM on 01/16/2012
Big Oil makes billions -- and continues to take taxpayer subsidies.
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killarneytim
Just common sense;not L or R
08:45 PM on 01/16/2012
Yes they make billions simply because they are so big. But they are not near as profitable as many other corporations.
Yes they do get subsidies and that is wrong. Those subsidies were put in place years ago to encourage exploration and to increase competition , allowing smaller oil companies to compete with the big ones. It was in our interests then but not now. Just like so many gov. programs , once it starts, it never seems to stop as conditions change.
The entire corporate and personal tax codes need to be changed to reflect the current conditions and this means most subsidies and special treatment need to stop.
oilfield
small manufacturing business owner
10:23 PM on 01/16/2012
tax writeoffs are different from subsidies.
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Josh Crawford
Just the facts, man!
09:11 PM on 01/16/2012
Prices go up in the Midwest because the XL extension would alleviate the current glut of oil in that region. Right now the pipeline ends in the Midwest, so that is where most of the oil is refined and consumed. Once/if the XL project ins completed, most of that oil will go to Texas where it will be refined and most of it shipped abroad. According to Reuters (link below):

"...a 2009 market analysis conducted by TransCanada, builder of the pipeline... projected that prices would increase about $3 per barrel as a result of the pipeline."

So there you go. Straight from the “horse’s mouth” (i.e. TransCanada). In addition to this “bonus”, the project will greatly benefit the dastardly Koch Bros who own businesses that "already import and refine 25 percent of oil sands crude reaching the U.S." according to the same story in Reuters. Please do yourself a favor and read the article:
http://www.reuters.com/article/2011/02/10/idUS292515702420110210
06:40 PM on 01/16/2012
If the big man upstairs comes down to earth, He's gonna take his belt off and whip us all real good. Society is on a bridge to nowhere......