Gas prices are going up again. How much hotter can this pot get before the frog is boiled? Our economy literally runs on affordable gas and diesel. Inflation signals are flashing, and consumer confidence has taken another hit. And the election is right around the corner.
Seeking to deflect political fallout from rising gas prices, President Obama has proposed releasing oil from the Strategic Petroleum Reserve. Obama has also been lobbying European Union countries to release their reserve oil to increase supply and bring down prices and, by depriving Iran of oil revenues at the higher prices, increase the effectiveness of the sanctions against Iran.
At the same time, the New York Times reports that oil imports from Saudi Arabia have increased this year by 20 percent. That's the Obama plan. Increase oil supply from the reserve and from a country vulnerable to Iranian interference. This Obama plan makes no sense.
The president apparently believes that more oil supply from the reserve and greater dependence on Saudi oil will bring down prices but more oil supply from Canada will not.
In a well-known story, TransCanada proposed to build the Keystone XL Pipeline to increase oil exports from Canada to the U.S. by more than 800,000 barrels a day. This new oil from Canada was planned to go to gasoline refineries in Illinois, Oklahoma and Texas, increasing the supply of gasoline for American motorists and truckers.
The Keystone project would have created more than 20,000 well-paying jobs and lessened our dependence on Venezuelan oil, which is currently used in Texas refineries.
A coalition of 11 labor unions, a dozen state governments and many business organizations lobbied for federal approval, which was required because the new pipeline would have crossed the Canada/U.S. international border. The State Department had recommended approval.
President Obama vetoed the project, putting environmental ideology ahead of jobs and ahead of energy dependence on a reliable ally.
Since Obama's action, Chinese government-owned oil companies have been only too happy to begin buying Canadian oil companies in a blatant move to lock up the oil that would have gone to the U.S. The Canadian government has opened negotiations with the Chinese and is preparing to build a new pipeline from Alberta to the Canadian west coast to export the oil to China.
So far, it's a lose-lose for America.
But all may not be lost yet. TransCanada rival pipeline owner, Enbridge, Inc., has proposed another way to bring more Canadian oil to the U.S. that does not require federal approval.
Enbridge has an existing pipeline from Canada into the U.S. under an existing permit which allows for expansion of the volume of oil in that pipe. By investing $8.8 billion in new pipe capacity in its pipe network in the U.S., Enbridge plans to add up to one million barrels a day of that Alberta, Canada, oil to supply the same refineries in Oklahoma and Texas that were the target of the Keystone XL.
No further federal approval is required. Environmentalists are livid.
So while proposing to release oil from the Petroleum Reserve (oil which will have to be replaced by open market purchase after the election) to increase oil supply and bring down oil price, Obama is now searching for a way to stop the Enbridge pipe expansion.
Saturday's edition of the Los Angeles Times (a reliable mouthpiece for Obama) featured a front-page article in the business section exposing the Enbridge plan, detailing the few spills Enbridge had in its 60-year corporate history and calling on the federal agencies to do something to stop the import of Canadian oil.
The Times article lamented, "The task of determining the safety or wisdom of Enbridge pipeline routes falls on a patchwork of local, county, and state jurisdictions throughout the Midwest and East most of which lack intensive pipeline experience."
Translation: These locals want the jobs and the revenues from the pipeline and can't be trusted to stop it.
Only Obama can stop this nefarious scheme. The Times article ups the pressure on Obama, noting that, as of yet, the EPA and the National Transportation Safety Board have "declined to comment on Enbridge's new plans."
Will Obama once again step in to stop an increase in Canadian oil, preferring instead to plunder our Strategic Reserve and go deeper into oil dependence on Venezuela and Saudi Arabia?