Skip to main content

A typical Washington ploy -- release late on Friday afternoon material that you hope disappears into the dustbin of weekend inattention to serious matters. The State Department's release, earlier today, of a flawed look at the Keystone XL pipeline's climate impact derived from a highly questionable (highly questioned with Inspector General investigations ongoing) process is a classic example. The world, however, is changed.  The movement of information has changed. And, this is not something watched solely by people locked to their M-F, 9-5 jobs.

To start with, based on a quick initial read, here are a few examples of how this looks to be a flawed report?

  • It essentially assumes away the possibility that not building the Keystone XL pipeline would lead to reduce production of Tar Sands dilbit.
    • This is highly questionable.
      • The reason for the pipeline: to get the oil to Gulf Coast refineries so that it can be sold into Chinese and European markets at world prices, rather than depressed Midwest US prices. Taking the oil out of the US market and sending to China would create roughly $20 per barrel greater profit for the producers. (This is, of course, the absolute core reason for building the pipeline -- to maximize profits for those devastating Alberta digging up tar sands.) Hmmm ... according to the State Department, against the logic of basically every single economic textbook ever written, more or less profit is irrelevant for (dis)incentivizing more or less aggressive efforts to expand production.  Harvard MBAs watch out -- everything you learned is, evidently, wrong.
      • Even with rapid growth in rail transport capacity, the issue is not just price but capacity for moving dilbit out of Alberta.  Keystone XL would be like opening a valve to release pressure, giving confidence to those considering Tar Sands extraction investments that they would be able to send their product to market for higher prices.
        • The oil industry knows and even, when honest, admits this. As per one oil industry executive: “If there were no more pipeline expansions, I would have to slow down."
    • If you assume that the Dilbit will get produced and burnt no matter what you decide to do, of course the pipeline construction will not "significantly" impact climate change. The carbon will be pumped, according to this assumption, no matter what.
  • The report is at odds, in essence, with stated US policy on climate change.
    • It, in essence, uses a "business as usual" case for examining the KXL impact rather than "business as necessary".  This choice is a policy one and was not, as far as I can tell, ordained by law.
  • For additional flaws, see, for example, 7 Facts Not in State Department KXL EIS.

These examples of flawed (if not biased, skewed, questionable, ....) analysis are not, however, perfectly relevant for this posts' title.

In Washington DC, information is currency. On Wall Street, information translates into massive currency.

For the past few days, key oil interests and players with, evidently, insider knowledge -- such as the American Petroleum Institute's Jack Gerard -- created a buzz, telling reporters and who knows who else, that the State Department review of Keystone XL would come out Friday and that it would be favorable to the project.  Hmmmm ... their creation of buzz seems to have, clearly, been based on some real information.

Who in the Department of State (or elsewhere) provided this information to Gerard?

Let's be clear -- the Keystone XL pipeline is a multi-billion dollar project with tens of billions of dollars of impacts for the Tar Sands industry and other business interests.  Many -- probably most -- of these are publicly traded firms whose business prospects and, more specifically, stock prices can be impacted (if not driven) by major government reports and decisions.  Those with  insider knowledge of Government decisions -- able to place trades minutes, hours, or days before anyone else with that information in hand -- have an unfair (hmmm, might one say illegal) advantage on Wall Street.

Consider, for a moment, some other scenarios:

  • Someone gained information from a source that a government report was going to recommend  FDA approval of a drug with $10s of billions of potential revenue.  Would they be in an advantageous -- illegally advantageous -- position for trading that stock?
  • Company executives began telling reporters, days beforehand and accurately it turns out, that the Pentagon was going to announce that their company won a major project that would double their revenue.  Would it make sense for the SEC to take a look at seeing whether there was any unusual trading in the stock in the week(s) before the announcement and to look into how the company executives knew (and were stupid enough to tell people what they knew) that they had won the project prior to the announcement?

Again, in Washington, DC, information is currency.  On Wall Street, information is massive currency.

Doesn't it seem reasonable to wonder how petroleum interests had an inside track on this currency this week?

NOTE: There are a wide range of reasons why Keystone XL is not in US interest.

Environmentalists Activate Nationwide Protest Plan To Greet Keystone Report

Oil Change International had a strong reaction

"The State Department’s review, written by Big Oil’s cronies, presents a fatalistic view of a future devastated by extreme and catastrophic climate change. But we, and millions of Americans, know there is a different way.

This report assumes business as usual, which is not surprising for an industry-written report.  Despite that, the report concedes that the emissions impact could be “1.3 to 27.4 MMTCO2e annually,”[1] equivalent to as many as 5.7 million new cars.

5.7 million new cars is clearly a significant increase in carbon emissions.

There’s a new scenario we’re seeing grow stronger every day, one of concerned citizens rising up and saying no to Big Oil wrecking our communities and our climate.  As recently as two years ago no one in Washington thought this pipeline could be stopped.  Importantly, this report also concedes that other pipelines, such as the Northern Gateway, are looking less likely because of strong opposition.

The President says he understands climate and is committed to acting in the interests of posterity and not big donors.  That means rejecting Keystone XL, plain and simple.  The President and Secretary of State Kerry have all the information they need to reject this pipeline.

As a new phase of public comments begins, we know the President will be hearing loud and clear that this report is an artifact of a corrupt process, and the pipeline is a disaster for our climate, our communities, and our future.”

[1] Final Supplemental Environmental Impact Statement for the Keystone XL Project Executive Summary, January 2014, page 15 http://keystonepipeline-xl.state.gov/...

For comments made on the basis of the fossil-fuel industry driven buzz about the report's eminent release.
“Why in the world does Big Oil seem to know the findings of the State Departments report before Congress and the American people do? Because this process has been corrupted by the money and power of Big Oil since the beginning,” said John Sellers

Originally posted to DK GreenRoots on Fri Jan 31, 2014 at 02:28 PM PST.

Also republished by Climate Change SOS and EcoJustice.

EMAIL TO A FRIEND X
Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags

?

More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

Meteor Blades, skybluewater, Mary, Alumbrados, DeminNewJ, vicki, Chi, Odysseus, hester, grollen, teacherken, Trendar, Christin, badger, mimi, RunawayRose, bread, karlpk, Shockwave, wu ming, CupaJoe, liz, hyperstation, OLinda, LEP, eeff, willyr, RFK Lives, expatjourno, Doctor Who, TheMomCat, TracieLynn, whenwego, cosmic debris, ornerydad, mollyd, ctsteve, antirove, wader, scorpiorising, psnyder, MrSandman, pat bunny, HeyMikey, wordwraith, zerelda, ybruti, Gowrie Gal, rapala, nailbender, Bluesee, marina, 3goldens, Tinfoil Hat, NoMoreLies, tle, UncleCharlie, caul, chimene, sap, JohnB47, run around, citizenx, basquebob, Laurence Lewis, Kevskos, oregonj, Dem Beans, ladybug53, Burned, lotlizard, Sandino, rb608, LieparDestin, Ozzie, WisePiper, peacestpete, mightymouse, martini, Knucklehead, esquimaux, Patriot Daily News Clearinghouse, Magnifico, slampros, play jurist, SherriG, praenomen, twigg, Ashaman, gooderservice, JVolvo, SingerInTheChoir, profh, Tom Anderson, bstotts, Aaa T Tudeattack, One Pissed Off Liberal, psychodrew, FishOutofWater, la urracca, tbirchard, suejazz, bnasley, Back In Blue, bobswern, millwood, rovertheoctopus, Got a Grip, Don midwest, Assaf, on the cusp, Mike Williams, Involuntary Exile, elwior, jamess, Calamity Jean, pickandshovel, temptxan, petulans, BYw, maggiejean, divineorder, LinSea, maryabein, Methinks They Lie, socal altvibe, dRefractor, petral, MKSinSA, sfarkash, jpmassar, citisven, nocynicism, LookingUp, Railfan, flitedocnm, LaughingPlanet, Lost and Found, sunny skies, I Lurked For Years, Lady Libertine, Puddytat, Jaimas, orlbucfan, slice, no way lack of brain, Pakalolo, Possiamo, thomask, akmk, wintergreen8694, whoknu, chira2, PhilJD, dradams, DRo, SouthernLiberalinMD, veritas curat, OldDragon, anodnhajo, cwsmoke, Siri, Jakkalbessie, turn blue, Eric Nelson, 2thanks, FiredUpInCA, peachcreek, MartyM, burnt out, New Minas, arizonablue, MusicFarmer, Glen The Plumber, James Wells, Chaddiwicker, John Crapper, Panacea Paola, remembrance, goodpractice, HedwigKos, unfangus, ORswede, northerntier, helpImdrowning, bob152, ET3117, Another Grizzle, Kombema, eagleray, Liberty Equality Fraternity and Trees, socialismorbarbarism, ypochris

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site