On the Presidents Day holiday, at the National Mall in Washington, D.C., there was a massive demonstration to bring attention to the attempt of oil interests (embodied by Trans-Canada) to get licensing for the XL Keystone pipeline, which is to traverse the entire breadbasket region of the U.S., from Canada to the Gulf Coast.
Sitting United States senators and members of the House, along with investment bankers, energy and brokerage firm executives and others from all over the nation, have been espousing the potential Shangri-La of the Keystone pipeline crossing America in regards to jobs and the drop in the price of home heating oil and gasoline at the pump. That drop is actually a fiction; in fact, an undiscovered lie. The truth is, we already have an overabundance of crude and finished petrol products, coal and natural gas. The price isn’t dictated by this overabundance, it’s dictated by the fact that 70 percent of energy transactions are in the paper-generated market (Comex), not in the real end-users, such as power plants, airlines, etc. This speculation shouldn’t even be allowed, because of its devastating impact on the economy in the form of affecting anything that uses energy products for transportation, which is anything and everything, particularly food.
We have 50 million people in America with hunger issues. Two out of six grade-school children are affected, all of which is directly related to issues concerning energy products, because of speculation. This is just one of the many reasons why such speculation in the energy markets should be forbidden.
To continue with the Keystone “nirvana potential,” which we are urged to believe exists, let’s first look at the jobs supposedly generated. The full-time job number for the Keystone pipeline project is 6,500, but these full-time jobs will only exist until the pipeline is finished. Then, the number of jobs dwindles down to a mere 50.
Also, the area the pipeline will be impinging on already contains 250,000 existing jobs on multigenerational family farms and ranches. Needless to say, any kind of technical breakdown of the pipeline project in this region would be more than seriously devastating. Why all this risk for fossil fuel, every drop of which is going to end up being exported out of the country anyway?
The breakdown of exactly how the Canadian oil is to be handled is: A small portion will be refined to diesel and exported to South America. The remaining, unrefined crude will be tankered to China. Because of the tax structure for both petrol products for export, there will be zero tax revenue for the United States.
One of the climatic impacts of the summer of 2012 was that the United States harvested 50 percent less corn and lost 60 percent of its previous pastureland. The main traversal of most of the keystone pipeline is right across America’s heartland, the major source of America’s wheat, soy and corn. One of the major reasons for the fertility of this region is the High Plains aquifer system, a virtual underground ocean of fresh water consisting of four gigantic aquifers. The largest, called the Ogallala, spans 174,000 square miles beneath eight states. Petrol product pollution of this water table on a grand level would spell Armageddon for U.S. agriculture. The potential for damage to the pipeline is not that far-fetched; a good percentage of this region is a meteorological area known to locals as Tornado Alley, where weather conditions have become more and more violently severe and unpredictable.
On Feb. 2, in the Wall Street Journal, Chevron and Exxon announced quarterly profits in the multiple billions of dollars from their refineries. On Feb. 19, the front page of The Boston Globe declared there was an overabundance of crude oil and natural gas at this time, in the United States. There has been a 46 percent jump in the availability of petroleum products here. Refineries that were about to close are now humming right along and generating huge profits. The Bakken energy fields in North Dakota and the shale oil fracking around the northern parts of the country and Texas are the reason we’re awash in multiple energy products.
Yet, with all this abundance, the supply-and-demand cornerstone of the capitalist model doesn’t seem to be working correctly. A 1-cent increase in the price of a gallon of gasoline represents an $800 million revenue stream for the purveyor. In the past month, the price of a gallon of gas at the station has gone up 50 cents, and we’re told by the media that there’s no end in sight.
The economies in Europe and Asia are still contracting, and demand for crude is low there. The United States economy is still extremely fragile, and people are using less energy. It’s not even remotely a mystery that the U.S. public is being gouged for the price of a commodity that severely impacts the health and well-being of the American economy and way of life.
What is going on down in Washington, D.C.?
Joseph F. Doyle is a freelance writer living in Salem.