I have read no less than five letters to the editors in various newspapers with a simple solution to the Keystone Pipeline issue. The recommendations are all the same: build a refinery or refineries in Montana. Wow, that was sure easy. Spare the country the scary prospect of adding a big pipeline from Canada to Texas. Despite millions of pipelines for hundreds of years, suddenly pipelines are like nuclear waste. The fact that so many people would find this a solution is a fine example of the ignorance of the America public when it comes to the oil industry. Since the Jimmy Carter era, the media in this country has done nothing but demonize the oil industry.
Every price run up has been the greed of the industry not the stupidity of our government. The solution for every one has been another government hearing with no results. No wonder the average person has no clue how energy works here in America.
Addressing the Montana refinery solution, no new refineries have been built here for forty years. The oil industry has been able to close refineries and still maintain production from obsolete facilities. Billions in capital investment have made that possible. Plus, technology breakthroughs that get more from less. When investors tried to build a new refinery anywhere it was denied by the same intellectuals who are stopping the Keystone pipeline. Intellectual imbeciles who make suggestions like the refinery in Montana.
Let’s assume a refinery was permitted for Montana, which might take 10 years to get all those permits. A refinery was proposed for Arizona and ten years elapsed with no permits issued. When the Kinder Morgan pipeline that brings gasoline into Arizona from California had a problem, guess who was blamed? Not the people who denied the refinery in Arizona that would have solved the problem, Kinder Morgan.
But, let’s put a nice new modern refinery in Montana. Now, how does all that refined product get to market? By pipeline, of course. You can ship gasoline from Texas refineries to Chicago and New York markets for 3 cents a gallon. But, you can’t ship gasoline from Montana anywhere. The crude from Canada is going to Texas so the finished product can use the pipelines from Texas refineries to ship the finished product all over the East Coast and Midwest. So, there’s a little problem. You would have to build a finished product pipeline along the same route the Keystone was to take to get the finished product to other pipelines that move it to where the population and markets exist. You could, of course, move everyone from Chicago and New York to Montana.
The crude oil and finished pipeline distribution system in this country is the most efficient in the world. The oil industry has led the way in logistics for years. It saves the consumer a nickel a gallon on average. Oil companies make what they call exchanges. If company X has a refinery in Chicago and customers in Texas where company Y has a refinery, they may exchange products. Company X gives company Y product in Chicago and Y gives them a like amount in Texas and there is no transportation cost.
Government has stopped all refinery construction in America. The oil industry has fixed the problem for government and gotten nothing but grief for their work. Now, Obama wants to stop pipeline construction in America, the very process that saves you money every time you pull up to the pump.
Stupid is as stupid does, and when it comes to energy here in America it doesn’t get any dumber than our government. Can you say ethanol?
