Warren Buffett cleans up after Keystone XL
When President Obama, who is normally a great proponent of “infrastructure” projects, made his bizarre decision to block the Keystone XL pipeline project, I wondered if he might have been induced to create those thousands of American jobs if the oil could be moved by his beloved high-speed rail.
As it turns out, oil is already moved from northern latitudes, such as the booming oil fields of North Dakota, down to the Gulf of Mexico by rail of the old, low-speed variety. Fortunately, as Newt Gingrich pointed out during the Monday night Republican debate in Florida, the oil is on private land, so Obama can’t shut production down.
Shipping the oil with a pipeline would have significantly reduced costs, as an Associated Press report explains:
Billions of dollars of infrastructure improvements have been made in recent years to allow North Dakota’s oil shipping capacity to keep pace with the skyrocketing production. North Dakota is the nation’s fourth-biggest oil producer and is expected to trail only Texas in crude output within the next year.
Alison Ritter, a spokeswoman for the state Department of Mineral Resources, said the state’s so-called takeaway capacity is adequate, though producers and the state were counting on the on the Keystone XL to move North Dakota crude.
Shipping crude by pipeline in North Dakota adds up to $1.50 to its cost, compared to $2 or more a barrel for rail shipments, producers say.
“Oil that would have moved by the Keystone XL is now going to shift to rail transportation,” Ritter said.
Amusingly, a spokesman for the Sierra Club admitted “there is no question that [transporting] oil by rail or truck is much more dangerous than a pipeline,” but that didn’t stop the zero-growth eco-fanatics from calling in their chips with President Downgrade to kill that pipeline.
Those rail shipments are expected to “increase exponentially with increased oil production and the shortage of pipelines,” according to Justin Kringstad, director of the North Dakota Pipeline Authority. That’s going to be quite a windfall for the railroad companies, isn’t it?
As it happens, 75 percent of the oil currently shipped by rail out of North Dakota is handled by Burlington Northern Santa Fe LLC… which just happens to be a unit of Warren Buffett’s company, Berkshire Hathaway Inc. What a coincidence!
For some reason, nobody from BNSF or Berkshire Hathaway would return the AP’s telephone calls, but oilman Harold Hamm told them he was sure this was just a wonderful “lucky break” for Barack Obama’s favorite billionaire, who is “certainly favored by this decision.” I’ve heard Buffett’s famously overtaxed secretary will be a guest at the State of the Union address tonight. Maybe someone could ask her about it.
The “tax me more” refrain from liberal billionaires is one of the oldest sucker games in the book. For the well-connected, the money that can be made through government power – whether by influencing corrupt politicians, or merely predicting what they’re going to do – dwarfs whatever income they offer to cough up.