Thursday, December 4, 2014

How Is This Better?

The Keystone pipeline has been in the news for the last several years.  You've probably heard all the arguments.  It essentially comes down to the fear over damage done to the environment due to an oil pipeline that traverses the country versus the economic and strategic benefits (jobs, access to reasonably priced oil, collaboration with an important ally, reduce dependence on oil from the Middle East, etc).  Of course, Obama has been no help.  He's the ultimate bureaucrat and has waffled, delayed, and let the whole thing languish with the expectation that he can avoid making a decision.  With the recent election in which the Republicans trounced the Democrats, it is generally thought that the Keystone pipeline may actually have a chance of succeeding.   This would be a great step!

But one interesting unintended consequence of not allowing the pipeline is emerging.  One thing is for certain is that oil will continue to be produced.  And that oil has to go somewhere.  Companies are not in the business of charity.  So they are moving the oil.  There is a great article on the front page of today's Wall Street Journal called "Shale Oil's Secret Routes to Market".  I would provide a link but the article is locked on the WSJ website.  But I encourage you to pick up a paper and read the article. The bottom line is that the oil, and I mean a lot of oil, is being moved by a virtual pipeline.  And that would be by rail.  There are now trains over a mile long all over the country moving massive amounts of oil.  These trains are extremely vulnerable to mishap or, worse yet, attack.  And since there is little federal regulation, there are not remotely the procedures and responses in place that there would be for a pipeline.  So there you have it.  Unintended consequences.  And...how is this better?


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