May 2015, Vol 242, No. 5
Editor's Notebook
Editor's Notebook: Crude Exports More Important Than Keystone
I was driving to work this morning on Kamikaze Highway, officially known as I-10, and switched on the 9 a.m. news when a story so outlandish grabbed my attention, nearly forcing me into another lane of traffic, in which case I could not have written this column. The story, reported by Fox News, cited an increase in President Obama’s popularity that it attributed to lower gasoline prices. Say what? He being responsible for lower gas prices is like saying the API is non-political. It’s just not so, am I right, Jack Gerard?
Shaking my head, I walked into my office and turned on a news website for my second shock of the day: a picture of Bruce Jenner, one of the greatest athletes of the 20th century, wearing a black and white striped dress. Now it’s no secret that Bruce is undergoing a gender transition. I’m OK with that, it’s his business, but seeing it in living color just a couple minutes after my road radio shock made me close my eyes, take a deep breath and hope to get through the rest of this day. I have something personal with Bruce; I’ll get to that later.
But now onto the real news, which is that whether they like him or not, and most really don’t, the fate of the oil industry is in the president’s hands. We’re not talking about the Keystone XL pipeline either. The oil industry and their allies in Congress decided to make Keystone their most important political issue, even to the point of literally inviting Obama to veto a politically motivated bill in February calling for its construction. Why reject Keystone, after and assuming favorable reviews by federal agencies? Then force TransCanada and the producers to decide whether the project is still economically viable. You want to know something else? The public doesn’t care about Keystone one bit, as long as gas is dirt cheap. Obama has all the angles figured out, all in the name of climate change.
What the industry really needs, much more than Keystone, is federal approval to export excess crude. We’re already the third-largest exporter of oil products by volume. Meanwhile, in Texas and other producing states, the downturn is taking a rising toll as service companies vie to see who can lay off the most workers, and producers reconsider their drilling activities. The industry has been banned from exporting crude for 40 years in the aftermath of the Arab oil embargo. Well, guess, what? We’re not running out of oil and won’t anytime soon, which is why the Saudis are helping put the screws to our domestic industry.
Statistics show that the oil and gas industry supports nearly 10 million better-paying jobs and contributes over 8% of the gross domestic product. Unless they can sell their excess crude, production will fall, unemployment will rise and so will fuel prices. Storage capacity is ready to burst.
At CERAWeek, Sen. Lisa Murkowski, (R-AK), who heads the Energy and Natural Resource Committee, pledged to introduce legislation ending the ban. Why, she asks, are we holding our own industry hostage to an archaic law while enabling Iran to rejoin the world market? A reasonable question, but then this is also a president who has so far turned his back on Canada while reaching out to Cuba.
It’s all about the politics. It always has been. This is the conundrum facing the industry. With an election next year, who’s going to vote for legislation they fear might raise gas prices even though the EIA says it would probably lower them? So, action must happen quickly and that means the industry needs the administration’s support in what should be a no-brainer. Obama has already endorsed exports of natural gas which he professes to love. But when it comes to crude exports, he’s got this smug look on his face.
Now back to Bruce Jenner. Back in 1976, while we were all worried about domestic oil supplies, I was a hard-working reporter in upstate New York, hopelessly enamored with a vivacious copy editor named Christy. But alas, Christy only had eyes and an open heart for one man, this quite handsome track and field star who would set a world record winning the decathlon in the 1976 Montreal Olympics. Bruce did have a lovely woman in his life named Chrystie. Sorry Christy, who was soon to leave to another newspaper.
So thanks, Bruce. You couldn’t have made your life-altering decision a little sooner?
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