Reverse Protectionism: Waxman and Markey’s ‘Fix’ for Keystone XL

by Marlo Lewis on February 6, 2012

in Blog

Today and tomorrow, the House Energy and Commerce Committee will mark up H.R. 3548, the “North American Energy Access Act,” Rep. Lee Terry’s (R-Neb.) bill to nullify President Obama’s rejection of the Keystone XL Pipeline.

Reps. Henry Waxman (D-Calif.) and Ed Markey (D-Mass.) will offer an amendment that would bar U.S. refiners from exporting any petroleum products made from Keystone crude.

Waxman and Markey know full well the GOP majority will reject the amendment. But that’s the point. By forcing Republicans to vote no, they hope to “expose” Keystone as an “export pipeline” and a “scam” that won’t provide any consumer or energy security benefit.

Today at Master Resource.Org (here), I explain why the Waxman-Markey amendment deserves raspberries.

  • The policy it advocates discriminates against foreign commodities that have entered into domestic commerce and thus is illegal under GATT.
  • A significant portion of the oil shipped through the pipeline would likely be turned into products for U.S. consumers.
  • Even if that were not so, Keystone crude would still displace OPEC crude that U.S. refiners would otherwise turn into products for export.
  • The amendment is a form of reverse protectionism, based on the cockamamie idea that banning exports lowers prices by increasing domestic supply.
  • Imagine what a complete ban on petroleum product exports would do. It would drive investment, production, and the associated jobs overseas. Two further consequences would ensue: (1) We would then be more dependent on foreign imports; (2) gasoline prices would increase because we’d have to pay higher shipping costs and because foreign refiners would no longer have to compete with U.S. refiners.
  • Such an absurd policy differs from Waxman and Markey’s proposal only in degree, not in kind.

Why are opponents pushing the ludicrous argument that greater access to Canadian oil won’t increase our self-reliance on North American energy? I suspect it’s because the public isn’t buying their even more over-the-top claims that Keystone XL will ruin the Ogallala aquifer and wreck the global climate system.

Jim Horn February 7, 2012 at 1:10 pm

How about you mentioning the actual generation of GHG’s that is a “byproduct” of Alberta Tar Sands activities? How about mentioning Canada’s hopeless “RAMP” monitoring program that was supposed to monitor the environmental effects of Tar sands activities? How about mentioning the horrible pipeline spill (337,386 gallons) into the Kalamazoo River from an Enbridge pipeline?

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