Tuesday, February 24, 2015

President Veto Pipeline Bill

President Obama has done something that again does not quite make sense in my mind. Why in the blue sam hill would he veto the pipeline when our economy is as weak as it is? The main thing I keep seeing is the issue of climate change. As discussed yesterday I am still wondering why I should be worried about climate change and not population. I am by no means arguing for the more extreme measure of sustainability. But given the information that makes the most sense to me, I wonder what advantage does this move offer me?  From what I understand about the WCS or Western Canadian Select is that is is more aligned with export to Europe. While the benchmark right now is the WTI or the Western Texas Intermediate out of Cushing, Oklahoma.

1. Instead of the environmentalist getting upset at the damage from transportation over road or rail this has turned into a position of parties. Even reviewing the information at the Washington Post posits that moving oil by rail as a riskier position environmentally.

2. Cows emit significantly more carbon into the atmosphere than the keystone pipeline Cows emission 6.5 Billion tons per year vs 18.7 million tons according to Onegreenplanet.com.  My argument here might seem a bit extreme but if you are consuming beef you should worry more about your purchase of beef than an opening of the keystone pipeline. This is like saving .0029 I don't know about you but I would imagine that as insignificant.

3.  I imagine ExxonMobile which holds a 69% stake in Imperial Oil would stand to remove barriers to getting the oil to US ports. Again I don't gain much here but for those who are for a free market situation the veto seems to be a bad idea.

4. I would like to make the argument based off of population energy is a shell game of sorts. Just because one avenue of energy is blocked an alternative is brought in from somewhere else. Environmentalist might win a deal but instead of heavy crude oil we will shift to the fracking of natural gas.  If we stop fracking natural gas then we will shift to coal. If not coal the other alternative is nuclear power. In any case you come up with a scenario in which a hard decision needs to be made. In effect I believe it is a zero sum game.

What this means to me is that when the prices of energy go up the prices of CPI and more importantly the price of food goes up for you data wonks out there here is another link with data by the Bureau of Labor and Statistics for the non data wonks my understanding this means that you can thank Obama for the high cost of beef or other associated food products because this is not environmentally sound.

However, unlike Hobijn’s account, the analysis presented here finds that oil and gas commodity price movements had a substantial impact on the all-items CPI, as well as on lower level indexes both in the longer term and in specific years. Rising oil and gas prices contributed substantially to both all-items and core CPI price changes from 2003 through 2008, accounting for approximately 26 percent of both indexes combined. During years of large price increases in oil and gas, higher prices accounted for an even greater share of the all-items and core CPIs; in 2008,higher prices accounted for nearly 40 percent of each. (BLS)