03-04-2014, 05:30 PM
A nice article by Garvin (http://www.miamiherald.com/2014/03/03/39...re-it.html), explaining how oil and gas have allowed Putin to have his way in the Crimea. I did have a couple of nits, which I posted on the board that the author doesn't read:
Keystone is less of an issue than two alternative measures that don't get as much publicity (mind you I support construction of Keystone XL, but not because it is going to drive down the price of oil very much):
1) The US ban on oil exports (http://www.washingtonpost.com/blogs/wonk...change/). Keystone, of course, gets oil from Canada to refineries in the Gulf Coast, but as many outlets defending Keystone have mentioned, approval of Keystone isn't going to really affect whether oil from the tar sands reaches markets. If not Keystone, it will head west through Canada and be exported to China and elsewhere, or it will travel to the Gulf via rail cars, which are probably a greater environmental hazard than pipelines. Keystone XL should be approved, but not because it is going to make a difference on Russian foreign policy. On the other hand, the ban on US exports will affect global oil supply. As the article link notes, "Analysts at Citigroup have argued that lifting the export ban would cut the price of Brent crude." It won't be much (world oil consumption is about 89 million barrels a day, and we are talking about 500,000 bbl/day), but oil prices are highly sensitive to marginal capacity.
2) Building of CNG (compressed natural gas) terminals in the Gulf coast. Once upon a time, we were going to build CNG terminals to receive natural gas from exporting countries, but now we are at the point where we produce enough CNG as to be able to export it. If we build export terminals here and the Europeans build terminals to receive it there, they will be able to get a portion of their natural gas from us and be less dependent on Russian gas.
The two other measures have to be undertaken by the Europeans, and hopefully Russian intervention in the Ukraine will help scare them into becoming less complacent about their energy security. The first is the Euros (especially the French) have to become less averse to fracking in their own back yard. The second is to convince the Germans not to give up on nuclear power.
BC
Keystone is less of an issue than two alternative measures that don't get as much publicity (mind you I support construction of Keystone XL, but not because it is going to drive down the price of oil very much):
1) The US ban on oil exports (http://www.washingtonpost.com/blogs/wonk...change/). Keystone, of course, gets oil from Canada to refineries in the Gulf Coast, but as many outlets defending Keystone have mentioned, approval of Keystone isn't going to really affect whether oil from the tar sands reaches markets. If not Keystone, it will head west through Canada and be exported to China and elsewhere, or it will travel to the Gulf via rail cars, which are probably a greater environmental hazard than pipelines. Keystone XL should be approved, but not because it is going to make a difference on Russian foreign policy. On the other hand, the ban on US exports will affect global oil supply. As the article link notes, "Analysts at Citigroup have argued that lifting the export ban would cut the price of Brent crude." It won't be much (world oil consumption is about 89 million barrels a day, and we are talking about 500,000 bbl/day), but oil prices are highly sensitive to marginal capacity.
2) Building of CNG (compressed natural gas) terminals in the Gulf coast. Once upon a time, we were going to build CNG terminals to receive natural gas from exporting countries, but now we are at the point where we produce enough CNG as to be able to export it. If we build export terminals here and the Europeans build terminals to receive it there, they will be able to get a portion of their natural gas from us and be less dependent on Russian gas.
The two other measures have to be undertaken by the Europeans, and hopefully Russian intervention in the Ukraine will help scare them into becoming less complacent about their energy security. The first is the Euros (especially the French) have to become less averse to fracking in their own back yard. The second is to convince the Germans not to give up on nuclear power.
BC