First: A basic lesson in politics. Good politics is the art of the "possible" not of making the good the enemy of the perfect. That's a lesson that DC politicians should learn but that's a matter for another post because Curtis Tate has written of a very interesting "good" that should satisfy both dogs in this fight.
Second: A basic lesson in economics. Leave it to the unfettered free market to come up with something that works. It's not "either/or" or a "bad/best" scenario but what's possible. Namely, a "good" solution that works.
According to a McClatchy News article, what was once thought to be an overly expensive solution to transport oil--rail transportation--has been found to possess certain advantages that negate those costs. Those advantages:
- Railroad transports oil faster and can reach more destinations than does a pipeline.
- Tar sands oil is so thick, it must be diluted. Shipping tar sands oil in a rail car requires little or no dilution. Transporting tar sands oil in a pipeline requires diluting it to the extent that the pipeline loses 33% of its capacity.
- Trains move in two directions, meaning that they can transport the diluent back to the producer after it is extracted from the oil because the thinner is removed at destination.
While President Obama continues to be smitten with those who worship at the altar of environmentalism, Canadian tar sands oil--a very thick oil--is being transported via railroad. Previously thought to be too expensive an option for transporting oil, producers are realizing that rail has certain advantages that mitigate those costs.
Canada's two largest railroads--the Canadian Pacific and Canadian National Railway--are capable of transporting between 600k and 800k barrels of Canadian crude oil every day within two years. Compare that to Keystone XL's proposed capacity which is 830k barrels per day. Do the math considering the 33% dilution using the pipeline. (Hint: It's about 660k barrels.)
Then, too, Canadian Pacific and Canadian National Railway both reach the Gulf Coast, which contains 45% of U.S. refinery capacity. But, the trains can also reach the East coast, which Keystone cannot.
Given the fact that tar sands in Alberta and Saskatchewan are estimated by 2035 to be able to produce $3M barrels/day--more than current rail capacity--The Motley Monk thinks investing in US railroads might be a good idea. Guess who's already done so? None other than the Oracle of Omaha, Warren Buffett.
Third: A bit of advice. Don't listen to the dipsticks in DC and those who worship at the altar of environmentalism who seek only the perfect. Don't let the good be the enemy of the perfect. Cash in on what has been demonstrated to work, not on hopium and changium that involves political promises.
Let the discussion begin...
To read the article in McClatchy News click on the following link:
"Rail Carries Canadian Crude While Keystone Pipeline Decision Simmers."