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Donald Trump signed useful executive orders in his first days of office. Consider this to be a companion piece to my Economics in One Lesson series.

https://www.washingtonpost.com/news/energy-environment/wp/2017/01/24/trump-gives-green-light-to-dakota-access-keystone-xl-oil-pipelines/?utm_term=.0ae9e8057de9

President Trump signed executive orders Tuesday clearing the way for the controversial Dakota Access and Keystone XL oil pipelines to move forward. He also signed an executive order to expedite environmental reviews of other infrastructure projects, lamenting the existing “incredibly cumbersome, long, horrible permitting process.”

“The regulatory process in this country has become a tangled up mess,” he said.

This does not mean the Keystone XL project will be restarted as it was mothballed sometime ago, but it does bode well for the Dakota Access project. It remains unclear how Trump’s order will expedite environmental reviews. Many of those reviews are statutory and the legislation that created them cannot be swept aside by an executive order.

Trump said that both pipeline projects would be subject to renegotiation. In an Oval Office signing before reporters, the president said he would want any new projects to make use of American steel.

“I am very insistent that if we’re going to build pipelines in the United States, the pipe should be made in the United States,” he said.

The orders will have an immediate impact in North Dakota, where the pipeline company Energy Transfer Partners wants to complete the final 1,100-foot piece of the 1,172-mile pipeline route that runs under Lake Oahe. The pipeline would carry oil from the booming shale oil reserves in North Dakota to refineries and pipeline networks in Illinois.

The Standing Rock Sioux tribe and other Native American groups have been protesting the project, which they claim say would imperil their water supplies and disturb sacred burial and archaeological sites. The tribe had hundreds of opportunities over the last five years to bring up their concerns and instead chose to wait to hold a violent protest against a lawfully permitted project. The Army Corp of Engineers called a halt to the project in December to consider alternative routes, which would require the pipe that already been laid to be torn up and relocated.

The executive order from Trump on the Keystone XL pipeline threatens to undo a major decision by President Obama, who said that the project would contribute to climate change because it would carry tar sands crude which is especially greenhouse gas intensive because of the energy it takes to extract the thick crude.

TransCanada, the Calgary-based project owner, has said it would be interested in reviving the pipeline. But it was unclear what Trump’s caution about renegotiation would mean for TransCanada’s plans. Originally, TransCanada had planned to get about 65 percent of the steel pipe from U.S. manufacturers but other supplies from Canada.

On Tuesday, Trump said: “From now on we’re going to be making pipeline in the United States. We build the pipelines, we want to build the pipe. We’re going to put a lot of workers, a lot of skilled workers, back to work. We will build our own pipeline, we will build our own pipes, like we used to in the old days.”

Referring to comments Trump has made during the campaign and after the election, “He was talking about that being a big priority. That’s one of those ones where I think that the energy sector and our natural resources are an area where I think the president is very, very keen on making sure that we maximize our use of natural resources to America’s benefit.”

“It’s good for economic growth, it’s good for jobs, and it’s good for American energy,” Spicer added.

As news of the move surfaced Tuesday morning, oil industry officials hailed it as overdue.

“Making American energy great again starts with infrastructure projects like these that move resources safely and efficiently,” said Stephen Brown, vice president of federal government affairs at Tesoro Companies.

“We are pleased to see the new direction being taken by this administration to recognize the importance of our nation’s energy infrastructure by restoring the rule of law in the permitting process that’s critical to pipelines and other infrastructure projects,” Jack Gerard, president of the American Petroleum Institute, said.

Environmentalists, by contrast, vowed to continue to fight the two pipelines.

Greenpeace Executive Director Annie Leonard noted in a statement that a broad coalition of opponents-“Indigenous communities, ranchers, farmers, and climate activists” –managed to block the projects in the past and would not give up now.

“We all saw the incredible strength and courage of the water protectors at Standing Rock, and the people around the world who stood with them in solidarity,” she said. “We’ll stand with them again if Trump tries to bring the Dakota Access Pipeline, or any other fossil fuel infrastructure project, back to life.”

“We will resist this with all of our power and we will continue to build the future the world wants to see,” she added.

Bill McKibben, founder of the activist group 350.org, which has fought both the Keystone XL and Dakota Access pipelines, said the decision to allow the projects to move forward ignores the massive opposition expressed both through public protests and in comments to government agencies.

“The world’s climate scientists and its Nobel laureates explained over and over why it was unwise and immoral,” McKibben said in a statement. “In one of his first actions as president, Donald Trump ignores all that in his eagerness to serve the oil industry. It’s a dark day for a reason, but we will continue to fight.”

A key to renewing any economy is use of natural resources. There are already several pipelines that run within a mile or two of the Dakota Access Pipeline. Many of these have been in place for years and have not caused any degradation of water quality. There is a lot of silly ideas about pipelines — that they are inherently unsafe is one of them. The other is the idea that if we just stop using oil, we’ll be able to make the switch to renewables … easy-peasy.

Image result for images of trans-alaska pipelineThat’s a lie from the pit of hell!

There is a reason that until the massive subsidies of the Obama administration came into play that renewable energy had not exceeded 7% of the energy sector. It’s called economics.

Solar panels use so much oil in their manufacturing process (they’re made of plastic carbide after all) that it takes 20 years of use to offset the carbon fuel that would have been used to make electricity instead. What’s more, solar panels are so inefficient in converting solar energy into usable electricity that, if you paid full price for them (what they’re actually worth not what the Obama subsidies provide) that you would not break even on your electric bill even in the sunny Southwest for a decade or more. In Alaska, where I live, solar panels aren’t especially useful for most of the winter (because of reduced daylight), so solar panels here don’t pay back their actual cost within their serviceable lifetime.

In keeping with my series on Economics in One Lessonit seems like a good idea to look at the seen and unseen costs of denying the pipelines. Environmentalists are the special interest groups described in Hazlitt’s book. They see the money that was saved … the environmental protection … the “salvation” of the tribal life style … but they don’t see the secondary costs … or if they do, they don’t care.

Dakota Access will bring Bakkan oil to refineries without using trucks and rail. Pipelines are a manifestly safer way of transporting volatile fluids than are rail and truck. The risks of crashes far outweigh the risks of spills. While spills do happen, they happen far less often and they can be mitigated much more easily. What if a truck or rail car were to spill going through a big city? It’s safer for the public and it’s safer for the environment to transport oil and natural gas via pipeline.

And oil will still be necessary whether or not these pipelines are built. The modern world runs on energy. Try to envision every bit of unused land in the United States filled with solar panels and wind mills and it still not being enough. Unless we get over our fear of nuclear energy, that is our future – not vista without the wink of solar panels or the strobe of turbine blades … and still unable to power our current population, much less any future growth.

More, the curtailment of oil drilling and transportation drives up electric and home and motor fuel costs. We don’t see what families don’t do or buy because they are paying exorbitant energy costs. It’s easy to see they’re driving less, but much harder to see the ballet school that closed because the students’ parents couldn’t afford to transport their kids to lessons.

Refusing to pump oil in the United States leaves us at the mercy of the Middle East. OPEC can wreck our economy by severely curtailing its production or, conversely, pumping like crazy. There’s something to be said about using the resources we have on hand.

“B-b-but the US only has a limited supply of oil” someone will protest.

Thanks to fracking, that limited supply of oil is a 300-year supply at current usage. That’s a long time to develop an alternative that works better than solar or wind — or that uses those sources much better than the current technology does.

In the meantime, a working economy requires energy that is cost-affordable and easily available and Trump’s executive orders begin to roll back the foolish Obama administration rules that were slowing the economy down.

I don’t like executive orders, by the way. I don’t think the president ought to have that power. However, so far Trump has used the power of the pen to loosen the bonds that have been holding industry back. You might notice that he doesn’t appear to have spent any government money. He’s made it possible for business to spend its own money for our economic benefit.

 

 

 

 

 

 

 

 

 

 

 

 

 

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Posted January 24, 2017 by aurorawatcherak in economics

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