Keystone XL

Post image for Will Markey’s Keystone Export Ban Come Back to Bite Him?

File this one under “be careful what you wish for.” Rep. Ed Markey (D-Mass.) must have thought he was being very clever. At a recent House Energy and Commerce Committee meeting on legislation to authorize construction of the Keystone XL Pipeline, Markey introduced an amendment banning U.S. exports of petroleum products made from Keystone crude.

For Markey, the amendment was never a serious legislative proposal. For one thing, as explained on this site and MasterResource.Org, an export ban would violate U.S. treaty obligations under both the General Agreement on Tariffs and Trade (GATT) and the North American Free Trade Agreement (NAFTA). In addition, Markey knew Republicans could not support the ban without jeopardizing the long-term supply contracts that pipeline builder-operator TransCanada Corp. had negotiated with Gulf Coast refiners — contracts on which the project’s commercial viability depends.

In fact, Markey was counting on Republicans to vote against the ban, as that allegedly would expose them as duplicitous shills who care only about oil industry profits, not about reducing dependence on OPEC or alleviating pain at the pump. As also explained in the previous columns, Markey’s exposé is itself bogus, because (1) Keystone crude would displace OPEC crude whether the associated refined products were sold domestically or overseas, and (2) much of the refined product would likely be sold in the USA.

This just in: What Markey introduced as a rhetorical prop may be sprouting legislative wings in the Democrat-controlled Senate, where it could win votes to overturn President Obama’s rejection of Keystone XL. [click to continue…]

Post image for Markey’s Ban on Petroleum Exports Not Legal under Trade Treaties (Updated Feb. 15, 2012)

Earlier this week, the House Energy and Commerce Committee marked up and approved the North America Energy Access Act (H.R. 3548), sponsored by Rep. Lee Terry (R-Neb.). The bill authorizes construction of the Keystone XL pipeline, the $7 billion shovel-ready project to deliver up to 830,000 barrels per day of Canadian crude oil to Midwest and Gulf Coast refineries.

Democrats offered five amendments to ‘improve’ (that is, sabotage) the bill. The GOP majority easily defeated the killer amendments, including Rep. Ed Markey’s (D-Mass.) amendment to ban exports of petroleum products made from Canadian oil shipped via the pipeline. Markey claims consumers would benefit because refiners would be forced to sell more gasoline in U.S. domestic markets, lowering prices.

Earlier on this site, National Journal’s energy blog, and MasterResource.Org, I opined that Markey’s proposal would violate U.S. treaty obligations under the General Agreement on Tariffs and Trade (GATT) and the North American Free Trade Agreement (NAFTA). I also argued that an export ban could backfire. It could drive refining-related investment, production, and jobs out of the USA, increasing pain at the pump by curbing production at home while making higher-priced foreign imports more competitive.

In “Proposed Keystone Export Ban Fraught With Pitfalls,” National Journal reporter Amy Harder quotes two independent experts who offer similar assessments of Markey’s proposal. [click to continue…]

Post image for Keystone XL Pipeline: What Is the President Thinking?

Last night over dinner with a knowledgeable source, I heard the skinny on the $7 billion Keystone XL pipeline extension that would double U.S. imports of tar sands oil from western Canada…if the Obama administration allows it.

The 1,700 mile pipeline would link expanding Canadian crude production with America’s first-class refining hub in the Midwest and along the Gulf. It was one of three diplomatic priorities articulated by Canadian Prime Minister Stephen Harper during his February sit-down with President Barack Obama (the other two were Afghanistan and trade policy). That’s why the State Department is behind it.

However, oil production from tar sands is more carbon-intensive than traditional production, so environmentalist groups are staunchly opposed to the Keystone XL pipeline. As a result of the greens’ organized opposition, the Environmental Protection Agency in July, 2010, rebuked the State Department’s draft Environmental Impact Assessment* of the pipeline, stating that it contained “inadequate information.”

[click to continue…]