This is a special report done in conjunction with GBTV. The issue was explored in detail on The Glenn Beck Program Tuesday, April 17.
As the nation’s gas prices skyrocket, critics argue that President Obama’s recent rejection of the $7 billion, “shovel-ready” Keystone XL oil pipeline, followed by his continued vow to “double down” on green energy, is a clear sign the administration plans to do little of substance in terms of American oil exploration. The move has also stirred controversy about the president’s real intentions concerning job creation and reducing pain at the pump for everyday Americans. But could there be a more sinister reason behind denying the pipeline’s requisite permits — namely, to benefit billionaire Obama-supporter Warren Buffett?
The evidence does seem to be mounting.
Background on TransCanada’s Keystone XL oil pipeline
By now, most are likely familiar with the controversy surrounding the Keystone XL oil pipeline intended to transport crude oil from Alberta, Canada all the way to Texas’ Gulf Coast. The administration rejected permits to construct the northern portion of the pipeline, allegedly on the basis of “environmental concerns,” along with a purported lack of time to investigate said issues.
Adding salt to the wound, in March, Obama visited Cushing, Oklahoma, site of the world’s largest oil storage complex, to take credit for “approving” the stretch of pipeline construction that was already underway there. While Obama used the tour to prop up his administrations’ energy policy, TransCanada actually gained approvals to build the southern stretch of its pipeline months prior to Obama’s arrival in Oklahoma, and did so through no help of the president. As Forbes pointed out, pipelines that stay within U.S. borders are not subject to presidential approval like ones running from Canada into the U.S.
<a href="http://ad.doubleclick.net/jump/prnd/prn-theblaze;prntype=web;prngenre=conservative_talk;prnpage=interior;pos=bottom;sz=300x250;u=prntype*web!prngenre*conservative_talk!prnpage*interior!pos*bottom!sz*300x250;ord=123456789?" target="_blank" ><img src="http://ad.doubleclick.net/ad/prnd/prn-theblaze;prntype=web;prngenre=conservative_talk;prnpage=interior;pos=bottom;sz=300x250;u=prntype*web!prngenre*conservative_talk!prnpage*interior!pos*bottom!sz*300x250;ord=123456789?" border="0" alt="" /></a>Regarding the northern portion, TransCanada filed an initial application to build the 1,179-mile underground pipeline in 2008, passing two State Department reviews and in February 2010, South Dakota Public Utilities Commission (PUC) granted a permit based on a thorough work up of the project.
“There has been a great deal of work and due diligence leading up to this decision,” said South Dakota Public Utilities Commissioner Dustin Johnson in an interview with DownStreamToday. “The record compiled in this case is pretty impressive. In the end, I feel the conditions we have placed upon this project ensure that it will be constructed in a manner that is sensitive to South Dakota and her people.”
Another Public Utilities official said he believed “the process by which this application was considered was open, thorough and fair” and Keystone openly pledged to station full-time personnel in South Dakota to respond to any emergency situations that may have arisen, according to the report.
That was apparently not enough for the White House, however, which sent TransCanada and others back to the drawing board in January 2012, citing environmental concerns.
To bypass obstacles created by special interest groups and the Environmental Protection Agency, a March 2012 amendment was introduced in the Senate that would have eliminated the need for a federal permit, while addressing environmentalists’ worries by placing more autonomy in Nebraska’s hands. After a vote, however, Democrats squashed the measure 56 to 42.
But it appears TransCanada may not be giving up just yet. According to its website, the company plans to re-apply for a Presidential Permit to be processed in an “expedited manner” by making use of ”the exhaustive record compiled over the past three plus years of regulatory review to allow for an in-service date of 2015.”
The statement continues:
TransCanada anticipates approval of the Presidential Permit application – which is required as the pipeline will cross the Canada/U.S. border – in the first quarter of 2013, after which construction will quickly begin. [...] TransCanada continues to believe in the value of Keystone XL due to the overwhelming support the project has received from American and Canadian producers and U.S. refiners who signed 17 to 18 year contracts to ship over hundreds of thousands of barrels of oil per day to meet the needs of American consumers.
Given the obstacles faced to now, TransCanada still may have a long road to hoe.
The job factor
If allowed, Keystone would have brought a reported 830,000 barrels of crude oil per day from Alberta, Canada, to U.S. outposts and refineries on the Gulf Coast. According to TransCanada, the $7 billion project would have also created some 20,000 jobs in the United States.
“These are new, real U.S. jobs,” Russ Girling, TransCanada’s president and chief executive officer, said in a statement back in January.
Girling clarified that 13,000 construction jobs would be created immediately while another 7,000 would be generated in the manufacturing sector.
TransCanada also maintained that among those positions on offer would be one for an “environmental coordinator.” While the job description was not readily available, it seems based on the title, to be the kind of “green job” engineered to oversee that the pipeline’s production was in accordance with environmental standards.
A growing rift with Canada?
TransCanada and its supporters, including Canadian Prime Minister Stephen Harper, have maintained that Keystone XL is vital to American livelihood. Yet, as The Blaze reported, in the wake of Obama’s political maneuvering, Harper deemed the U.S. an unreliable energy partner and now plans to expand his country’s crude export. The move will result in Canada eliminating the discount it once afforded the U.S. on its oil products, thus hitting drivers at the gas pump even harder.
Even longtime oilman T. Boone Pickens observed the alienation occurring between the two neighbors when he said that ”we work with the Canadians like they’re the enemy sometimes.” He added, “we tell them they can’t bring a Keystone pipeline to the United States…That’s 250 billion barrels of oil that the United States would capture for our use!”
The administration’s alleged reason for rejecting the application for the pipeline submitted by Calgary-based TransCanada was said to be based on a lack of time to study the proposal by a February 21 Congressional deadline. Yet, as we have pointed out, the pipeline was under review for no less than three years and was approved earlier. In addition, if environmental concerns were truly the catalyst for rejecting the pipeline, why then would the president seem comfortable with operating pollutant-emitting freight trains along thousands of miles of railroad through the United States?
Warren Buffett’s Burlington Northern Railroad
What prompted the president to turn the lights out on what critics argue would have been an environmentally-sound, job-boosting, oil-producing project that would benefit the nation and preserve the financially beneficial Canadian-U.S. oil relationship? What does President Obama have to gain by rejecting Keystone XL and who else stands to benefit from his decision?
It was previously reported on The Blaze that Warren Buffett’s Burlington Northern Santa Fe LLC railroad — a unit of Buffett’s Omaha, Nebraska based Berkshire Hathaway — would be among those poised to reap sizable gains by the administration’s decision to reject TransCanada’s oil pipeline permit. Berkshire Hathaway purchased a 22% (or, $34 billion share) of the 32,000 mile line in 2009, shortly after Obama was elected.
“Whatever people bring to us, we’re ready to haul,” Krista York-Wooley, a spokeswoman for Burlington Northern told Bloomberg. If Keystone XL “doesn’t happen, we’re here to haul.”
According to the analysis, the rail option, while more expensive, would minimize environmental impact. At the same time, however, it would also worsen greenhouse gas emissions.
Nebraska Senator Ben Nelson
When it comes to the Keystone oil pipeline and Buffett’s Burlington Northern, all roads seem to lead to Nebraska.
GBTV uncovered a startling connection between Berkshire Hathaway’s home-state and that state’s Senator Ben Nelson, who voted against the Keystone XL and lobbied that it be re-routed to avoid Nebraska. Ironically, the Senator’s attempts to thwart the pipeline were done while he himself maintained his state would heartily welcome the jobs created from the Keystone project. While Nelson’s position then seems counterintuitive, add to it the fact that he is heavily invested in Buffett’s Berkshire Hathaway. From 2007 to 2012 Nelson contributed $27,000 to the company itself and according to a recent financial disclosure statement from 2008, he owned between $1.5 and $6 million of the company’s stock – his largest investment in any one company to date.
The pendulum seems to swing both ways, however. Buffett’s Burlington Northern Santa Fe PAC in turn contributed $5,000 to Senator Nelson’s Nebraska Leadership PAC and Berkshire Hathaway employees have reportedly long supported the senator, contributing at least $75,550 to the Nebraska Democrat over the course of his political career according to the Center for Responsive Politics.
Not coincidentally, Senator Nelson penned an op-ed column on March 5, 2012 entitled “Behind Those High Gas Prices.” As you can imagine, the senator was quick to tell Nebraskans that the spike “has nothing to do with the Keystone Pipeline” and also “isn’t a result of domestic oil production.” Below is an excerpt from Nelson’s column:
First, the rapid rise isn’t a result of domestic oil production. We’re producing more oil in the U.S. now than we have since 2003. As a matter of fact, under the previous Administration domestic production of crude declined every year, whereas since 2009 domestic production has increased every year.
Second, this has nothing to do with the Keystone Pipeline. The price of oil is set on the World Market and is impacted by a host of factors – including unrest in oil producing nations. It isn’t a simple supply and demand pricing issue.
He went on to write the U.S. has in fact demonstrated “the lowest demand for gasoline in 15 years” but the price of oil “has still gone up.”
Helping to squash the Keystone pipeline clearly won’t help matters either.
Overhauling financial regulation
Another area explored by GBTV was in Nelson’s involvement in overhauling financial regulation. Among the considerations during a tentative deal to set restrictions on trading derivatives, was a substantial provision being lobbied for by Buffett that would have buffered his company from financial blows. The WSJ adds:
The provision, sought by Berkshire and pushed by Nebraska Sen. Ben Nelson in the Senate Agriculture Committee, would largely exempt existing derivatives contracts from the proposed rules. Previously, the legislation could have allowed regulators to require that companies such as Nebraska-based Berkshire put aside large sums to cover potential losses.
The article adds that the change “thus would aid Berkshire, which has a $63 billion derivatives portfolio, according to Barclays Capital.”
As GBTV discovered, Nelson has also engaged in a series of votes, including in favor of TARP funds, that have benefited Buffett in some way.
A lucrative proposition
By removing the possibility of transporting oil via the Keystone pipeline, the Burlington Northern railroad has, some might argue, “conveniently” been able to fill the void, thus Senator Nelson and Berkshire Hathaway stand to reap substantial dividends. Likewise, Buffett ensured financial security and prosperity for his new railroad and will likely pay his Democratic benefactors in kind.
Please check back as clips from GBTV’s special on Warren Buffett and the Keystone Pipeline will be uploaded shortly.
Tags: Buffett, Helped, Obama, Kill, Keystone, Pipeline, to, Reap, Financia, l Gain
Location: New York, New York, United States (load item map)
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