Obama’s Alternative to the Keystone Pipeline

January/03/2014 5:07AM
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This country is moving to energy independence despite this president. He continues to block the final approval of the Keystone pipeline despite all the environmantal studies. I have written in previous blogs that it’s just a matter of time before we have a terrible accident with railcars carrying crude oil from the fields in North Dakota to refineries around the country.

This is another”If you like your doctor, you can keep your doctor, period” lies from Obama. Warren Buffet did a lot to get Obama re-elected. Warren Buffet owns the railroads that carry the crude oil from the fields in North Dakota to refineries. Buffet’s railroads are making windfall profits from this. If the Keystone were to be built Buffet will lose billions.

So we blow up a few people from railroad explosions like the one in Canada. It’s all part of getting votes, colleteral damage, if you will. It’s just a matter of time folks. Do you really believe Obama is stopping the pipeline for environmental reasons? For safety reasons? If so read this from Reuters.

Train Derailment

North Dakota oil train crash sparks fireball

Scramble to contain fire and spill after incident that will amplify concerns about safety of carrying crude by rail

  •    Reuters in Fargo
  • North Dakota oil train erupts into fireball after crash.

A BNSF train carrying crude oil in North Dakota has collided with another train, setting off a series of explosions that left at least 10 cars ablaze, the latest in a string of incidents that have raised alarms over growing oil-by-rail traffic.

Local residents heard five powerful explosions just a mile outside of the small town of Casselton after a westbound train carrying soybeans derailed and an eastbound 104-car train hauling crude oil ran into it just after 2pm local time on Monday, officials said. There were no reports of any injuries.

City officials said they heard a series of blasts following the collision, including one at 3.40pm. Windows shook at the city auditor’s office.

“Approximately 10 cars are fully engulfed resulting in heavy smoke in the area,” the Cass county sheriff’s office said in a statement, adding that local fire and hazardous material teams were battling the blaze. The sheriff’s office said it was not yet clear how the collision had occurred.

Residents within five miles (8km) to the south and east of Casselton were urged to evacuate to avoid contact with the smoke. Residents within 10 miles were asked to remain indoors.

The Casselton city auditor Sheila Klevgard said crews were pushing snow to contain the oil before it reached a nearby creek. Half of the oil cars had been separated from the train but another 56 remained in danger, said Cecily Fong, the public information officer for North Dakota emergency services. The collision destroyed both engines on the oil train. Both trains were operated by BNSF Railway Co, which is owned by Warren Buffett’s Berkshire Hathaway Inc.

The incident will likely stoke concerns about the safety of shipping increasing volumes of crude oil by rail, a trend that emerged from the unexpected burst of shale oil production out of North Dakota’s Bakken fields. Over two-thirds of the state’s oil production is currently shipped by rail.

Initial reports from the scene of the accident did not point to a malfunction on the oil-carrying train. Still, videos of the exploding railcars are likely to add to the ongoing debate on what fixes are needed as older train cars carry flammable fuels like oil.

The derailment occurred about a mile west of Casselton, a small town just west of Fargo, between an ethanol plant and the Casselton Reservoir, Fong said.

Casselton is state Governor Jack Dalrymple’s hometown.

North Dakota is home to a shale oil boom that produced nearly 950,000 barrels of oil a day in October. It is also a major grain producer and long accustomed to a high volume of rail traffic.

But shipments of oil have surged lately, most of it the light, sweet Bakken variety that experts say is particularly flammable.

Trains carried nearly 700,000 barrels a day of North Dakota oil to market in October, a 67% jump from a year earlier, according to the state Pipeline Authority.

This summer a runaway oil train carrying Bakken crude derailed and exploded in the centre of the Quebec town of Lac-Megantic, killing 47 people. The incident fuelled a drive for tougher standards for such shipments, including potentially costly retrofits to improve the safety of tank cars that regulators have cited as prone to puncture.

In early November two dozen cars on another 90-car oil train derailed in rural Alabama, erupting into flames that took several days to fully extinguish.

The Association of American Railroads recently proposed costly fixes to older tank cars that do not meet its latest standards but continue to carry hazardous fuels such as oil.

The fixes include protective steel jackets, thermal protection and pressure relief valves, which could cost billions of dollars. Oil shippers, likely to be saddled with the costs of retrofits, oppose some of the changes proposed by the association.

Following the Canadian rail disaster, the US department of transportation began an operation it dubbed Bakken Blitz, which includes spot inspection of oil shipments aboard trains in North Dakota.


This was my June 9, 2013 blog entry predicting this mess:

President Obama will not approve the Keystone Pipeline. He says it’s not safe because Canadian Sand Crude oil is corrosive and could create pipeline leaks to environmentally sensitive areas in Nebraska. That’s possible in a hundred years or so. The aging pipeline system seldom leaks despite some being in the ground over a hundred years. Some of which have been carrying that Canadian crude to US refineries for years.

The real reason is not pipeline leaks, it’s  environmental groups who  don’t approve of tar sand extraction. No matter that it’s in Canada. In one of her first missions as Secretary of State, Hillary Clinton traveled to Canada to tell them to stop the process. That went well, since Canada was enjoying a healthy economy while Obama was busy blaming Bush for sinking our economy. Canada was smart enough to understand how important their oil was to their economic growth. Obama never will, even though fracking is saving his bacon here at home.

So, whether you believe Obama cut a deal with Warren Buffet, or not, Buffet’s Railroad, Burlington, carries crude oil to US refineries that would be carried by a Keystone Pipelines. Oil industry experts have warned that it’s far safer to move crude by pipe than by rail. Common sense is all that’s needed for that judgment.

It happened. Several  rail cars carrying crude from Canada to Maine derailed on the Canadian side of the border. The explosion wiped out most of the town. As I’m writing this casualties are yet unknown. At least one is dead with 60 missing.

Will the media connect these dots for you? Probably not. Media in the US, with few exceptions, does not like pipelines.They will dwell on the plane crash in San Francisco and put the crude oil explosion on the back page.

Environmentalists contribute to Obama. Buffet helps Obama with the “tax the rich” election campaign. Obama halts the pipeline. Canada is upset with us, and begins planning a pipeline to their west coast to ship the oil to China.  Buffet makes more money by hauling the oil to the US by rail.

It’s a matter of time before Buffet’s rail cars cause a disaster in some town in the United States. But, it’s all worth it. It’s about politics, not safety,  jobs, common sense, working with our Canadian neighbor, or reducing U.S.  dependence on Middle East crude. It’s campaign money in Obama’s pocket, votes, and money in Buffet’s pocket for his support.

That’s how our president set’s his priorities.

Here are some statistics from 24/7 Wall Street to show I’m not blowing smoke.


In its weekly report issued yesterday, the Association of American Railroads  (AAR) noted that rail carloads of petroleum rose 50.8% in the week, compared to  the same week a year ago. For the year to date, U.S. railroads have hauled 54.1%  more petroleum than they did a year ago.

The numbers are truly impressive. The AAR counted 259,141 petroleum carloads  last week. Just over a year ago, the count was just shy of 120,000 carloads for  the comparable week. And that represented a rise of nearly 30% from the same  week in 2011. Rail transportation of crude oil and petroleum  products has nearly tripled in three years.

Coal shipments by rail still outnumber petroleum shipments by about eight to  one, but coal carloads are down 5.6% year-to-date, compared with last year. And  the number of carloads of grain has fallen 16% in the same period.

Among the railroads, the big winner is the Burlington Northern Santa Fe  (BNSF), which is owned by Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK-A) and plies the rails along the northern tier,  including the oil-producing states of North Dakota and Montana. Railroads that  depend more heavily on coal shipments, like CSX Corp. (NYSE: CSX), Norfolk Southern Corp. (NYSE: NSC) and Union Pacific Corp. (NYSE: UNP), have all experienced double-digit percentage  drops in coal ships, weighing on revenues and profits.

Paul Ausick

Read more:  Rail Cars Fill Up with Crude Oil, While Grain and Coal Shipments Remain Soft – 24/7 Wall St. http://247wallst.com/commodities-metals/2013/05/17/rail-cars-fill-up-with-crude-oil-while-grain-and-coal-shipments-remain-soft/#ixzz2YY06QTIS

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