President Donald Trump isn’t lollygagging, is he? Among other things, the president signed executive orders regarding two unjustly stalled petroleum pipelines, Keystone XL (KXL) and Dakota Access Pipeline (DAPL).
Now KXL will have another chance at its environmental review, while the Army Corps of Engineers has been ordered to issue an easement allowing DAPL to cross the Missouri south of Bismarck, North Dakota.
About darn time, right? Yep. TransCanada formally announced its plans for Keystone XL in the summer of 2008 and applied with the State Department for a border-crossing permit in September that year.
First planned for a 2012-2013 completion, the 36-inch, 1,179-mile, $7 billion pipeline would move 700,000 barrels per day (BPD) of heavy Canadian oil sands crude from Hardisty, Alberta, across the border to Steele City, Nebraska, where it would join the existing Oklahoma/Gulf pipeline-refinery network.
Consider that in June 2008, the price of crude oil had reached an all-time record (over $150 a barrel for West Texas Intermediate), nearly 10 times 1998’s rock-bottom of $18. Gasoline was running north of four bucks a gallon – of course, Canadians wanted in on that action.
However, millions of Americans (who’d bought SUVs when oil was “cheap”) suddenly couldn’t pay their mortgages. The economy crashed, dumping oil to $51 per barrel by December of 2008. Best of all, Barack Obama was elected.
The Keystone XL then became Big Green’s pet tar baby, the raison d’etre for untold protest rallies and eco angst nationwide. Congress even got in the game, passing bills to approve KXL only to get President Obama’s veto.
Did that matter? Well, let’s think about why DAPL was proposed. Why build a $3.78 billion, 30-inchs, 470,000 BPD line 1,172 miles, from Stanley, North Dakota to Patoka, Illinois, given the radioactive politics killing KXL?
Well, why not? Bakken producers crave and deserve better access to market – tank trains aren’t the only or best means for getting that golden Dakota sweetness to refiners. With KXL (and its so-called Bakken “on-ramp”) in political purgatory, why the heck not?
So, in June 2014, DAPL announced its plans, gathered its government permits by March 2016, and started laying pipe. The eco-circus really got going then, culminating in the Army Corps denying one (of 22) river crossing, south of Bismarck, on December 4, 2016.
Thing is, by Thanksgiving last year, DAPL was 87 percent done, and is finished today with the exception of the Missouri River crossing. By the way, the Mississippi River crossing north of Keokuk, Iowa, was completed in August – under protest, but it’s done.
As for the pristine, threatened Missouri crossing, guess what? A power line and the 1983-built 42-inch Northern Border gas pipeline (operated by TransCanada) already cross, just yards away from DAPL’s route. Northern Border’s construction raised no tribal objections, just “concerns” near a couple of pumping station sites. So, we’ve enjoyed oodles of Canadian gas delivered safely for over 30 years across this spot. Greens aren’t screaming to shut down and dig up Northern Border – or even acknowledging it exists.
So what’s the real objective of all this eco-kabuki? Simple. Forget water, the environment, indigenous rights: It’s money.
Money has “time value” – the longer one waits for a return, the less an investment is worth. And what if there’s a chance of losing it all? Invest elsewhere, right? Like overseas, and people wonder why there are no real jobs in America?
Right now, DAPL financing includes $2.5 billion in loans. If a decent rate of return is 6 percent, the interest charges alone on DAPL’s debt equal about $411,000 every single day, or $624,000 for the total investment.
Keystone XL’s $7 billon is racking up unrecoverable losses of $1.15 million a day – on a project that should have been running in 2012. No wonder TransCanada is pursuing a claim under the North American Free Trade Agreement, $15 billion for “costs and damages” related to its attempts for approval. They have a heck of a case. DAPL might have an even better cause for redress.
Who might pay? Not environmentalists – but you, through your government and your taxes, still might. Put that in your pipe and smoke it.