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Hightower writes: "The dirty little secret that those pushing so urgently for building Keystone XL don't want you to know is that the tar sands oil producers are in cahoots with Texas refineries to move the product onto the lucrative global export market, selling it to buyers in Europe, Latin America and China - not to you and me."

Texas' progressive political curmudgeon, Jim Hightower. (photo:
Texas' progressive political curmudgeon, Jim Hightower. (photo:

The Keystone XL Flim-Flam

By Jim Hightower, Creators Syndicate

02 March 12


or Rep. Allen West, the skyrocketing price of gasoline is not just a policy matter, it's a personal pocketbook issue. The Florida tea-party Republican (who, of course, blames President Obama for the increase) recently posted a message on Facebook wailing that it's now costing him $70 to fill his Hummer H3.

It's hard to feel the pain of a whining, $174,000-a-year congress-critter, but millions of regular Americans really are feeling pain at the pump - especially truck drivers, cabbies, farmer, commuters and others whose livelihoods are tethered to the whims of Big Oil. It's an especially cynical political stunt, then, for congressional Republicans, GOP presidential wannabes and a chorus of right-wing mouthpieces to use gas price pain as a whip for lashing out at Obama's January decision to reject the infamous Keystone XL pipeline.

This friendly Canadian corporation, they cried, would send 700,000 barrels of "tar sands crude" oil per day through the 2,000-mile-long pipeline that it would build from Alberta, Canada, to Texas refineries on the Gulf Coast. "Less dependence on OPEC," they chant like a mantra, "more gasoline for America, lower prices for consumers." What's not to like?

Well, aside from inevitable environmental damage from pipeline leaks, and the fact that this foreign-owned corporation would use the autocratic power of eminent domain to take land from unwilling sellers along the 2,000 mile route, here's something not to like: The gasoline and diesel that would be made from this Canadian crude would not go to American gas pumps, but to foreign markets.

The dirty little secret that those pushing so urgently for building Keystone XL don't want you to know is that the tar sands oil producers are in cahoots with Texas refineries to move the product onto the lucrative global export market, selling it to buyers in Europe, Latin America and China - not to you and me.

The pipeline and the toxic crude it'll carry across six states would do absolutely nothing to shave even a penny off of the price we pay at the pump.

Already, U.S. refineries are exporting records amounts of the gasoline they make. For the first time in 62 years, America is now a net petroleum exporter. Valero Energy Corp., the largest U.S. exporter of refined petroleum products, is a major lobbyist for Keystone XL. Along with Motiva (an oil refiner jointly owned by Shell and Saudi Aramco) and Total (a French refinery), Valero has signed secret, long-term contracts with Keystone's owner (TransCanada Corp.) and several tar sands oil producers to bring this crude to Port Arthur, Texas. All three have upgraded their refineries there to process diesel for export.

Adding to Big Oil's enjoyment is the fact that the Port Arthur refineries of Valero, Motiva and Total are within a Foreign Trade Zone, giving them special tax breaks for shipping gasoline and diesel out of our country. And adding to the dismay of some U.S. consumers, TransCanada has quietly boasted that Keystone XL would cut gasoline supplies in our Midwestern states, thus raising prices at the pump and siphoning more billions of dollars a year from consumers pockets into the vaults of multinational oil interests.

So, lets tally the score in this Keystone pipeline deal: The American people's environment would be put at risk, foreign nations would get the fuel, pipeline and oil investors would get the tax-subsidized profits, and we'd all stay hooked on deadly polluting oil. Meanwhile, the financial speculators and supply manipulators who are artificially causing our gasoline prices to rise escape scrutiny, while self-serving politicians (tanked up on Big Oil's and Wall Street's campaign cash) divert attention to the bugaboo of Obama's pipeline decision.

And, yet again, our nation has an excuse to postpone the necessary investments in conservation, alternative fuels and mass transit that will actually solve the gas-gouging problem.

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+27 # Tippitc 2012-03-02 23:07
A "boondoggle" of epic proportions!! The only ones to gain from this mess are the oil companies behind it and the taxpayer will pay the bill.
+23 # Debra Hope 2012-03-03 01:29
Hard to believe people aren't aware of these facts. When I run into someone who doesn't believe the facts, I ask if it's such a good deal, why doesn't Canada refine the oil itself? Why doesn't Canada ship it from their beaches? What else aren't we being told? All I can say is thank God for that old Nebraska farmer who stood up and said, "Hell no you're not running that thing across my farm!"
+12 # Regina 2012-03-03 11:17
About Canada refining the oil itself: The Canadian indigenous peoples -- who are listened to by their government while our "Indians" are ignored here -- blocked the proposal to run the pipeline straight west to the Canadian coast. But the U.S. is always a patsy for the oil barons. One help against rising gas prices: Dump the Hummers!
+15 # walt 2012-03-03 07:28
Great job by Jim Hightower in exposing the realities involved in this scheme.

Meanwhile, the oil company gougers will continue to jack up gas prices to make everyone think that allowing the pipeline would lower prices. Sadly, Americans are so addicted that they will believe the liars yet again.

Some games just seem endless. These guys ought to be known as "The Oil Slick."
0 # MidwestTom 2012-03-03 08:00
Standby; I just read that Trams Canada is reapplying for the construction permit to build the pipeline. I am wiling to bet that this time it will fly. Why, Obama needs the c ash donations for his reelection campaign.
+1 # Texas Aggie 2012-03-03 22:06
Since Big Oil is most assuredly NOT an Obama donor, your comment doesn't pass the logic test. In the last election, McCain got essentially every dollar that Big Oil donated. The republicans are continuing the tradition.
+3 # MidwestTom 2012-03-03 08:07
Both gasoline and diesel are world wide products, and refiners take them to the markets with the highest prices. Diesel is much easier to refine than today's gasoline, but is cost more because the European market price for diesel is much higher than here. As the Federal Reserve prints more money trying to save our economy, the valve of each dollar drops; as the dollar drops the price of any products sold worldwide rises in terms of dollars. As the dollar falls expect ever increasing fuel prices. It is simply basic economics.
+15 # John Locke 2012-03-03 09:32
The average consumer is now seeing price increases at the pump, which will only continue. These prices will further destabilize what is left of the US Economy.

What they don’t see is the Oil companies shutting down 5 percent of their production facilities in order to create an artificial shortage, which is what they did over the past three months.

Consumers are being told instead the problem is the Mid East uncertainty

This "oil Shortage" occurs every time Big Oil wants to force an issue e.g. to raise prices (1970’s) or in this case the XL pipeline. Who are the real terrorists working against the interests of the American People? Oil and Wall Street and our own government officials from both parties that have been bought by their money!

It’s time to stop playing Russian roulette with our fragile democracy. If we want to restore it before it is unsalvageable, get out of the mind set “Never Vote Republican” or “Vote Democratic” Support and Vote for a third party candidate who is not on Wall Streets Payroll. If you don’t wake up soon, the game will be over and America will be another third world nation with a strong military and a real 100 years of a religious war.
+2 # MidwestTom 2012-03-03 11:14
There has not been a shortage of oil for several years. Cushing OK is the largest oil storage facility in this country and it has been full for over two ears. Also, no company is shutting down production, not at these prices. Mores than 80% of oil Futures trading is done by the NYC banks, bot the oil companies. Warren Buffet owns several large oil pipelines and the RR that hauls the most crude, and he is a big backer of Obama and the Democratic Party.
+4 # John Locke 2012-03-03 15:55
MidwestTom: You are incorrect, according to an article in the Guardian, which I am trying to locate for you...over the past 3 months 5% of the oil refineries have been shut down as out dated facilities.
+1 # John Locke 2012-03-03 15:59
MidwestTom: This will give you an idea whats happening and more recently 5% of refineries have been closed as "outdated"
+2 # MidwestTom 2012-03-03 21:02
Production is generally considered production of crude oil from wells. Refineries are processors. The world keeps building larger and larger refineries, but gasoline and diesel consumption in the U.S. is down due to the economy. As the EPA continues to tighten specifications smaller refineries cannot afford to keep up. Two new very large refineries are just coming on stream in India aimed completely as India's export market. Oil production is actually rising in the U.S. thanks to new fracing techniques being used in our abundant shale formations. Between the Utica shale in Ohio, the Eagle Ford in Texas, and the Bakkan in the Dakotas we have increased domestic production by over one million barrels per day. We will that when the Middle east explodes.
+1 # jimyoung 2012-03-04 09:46
It isn't so much how much there is as how much it takes to recover it. The Bakken tout sheets try to sell people on 4 or 5 times what is economically recoverable. Production there can almost always increase as you throw more money at it, but the time is past when we should be keeping it more affordable by much greater conservation and efficiency improvements.

The CIA World Factbook is a better source for cost effectively recoverable resources than the oil speculators tout sheets, by the way. I always run the other way when the big oil interests start advertising oil stocks (if they were that good they'd be quietly buying them).

I'm a bit appalled to read engineering journals that show Japan uses about half the energy we do for similar production, and even India adopting better production techniques some 8 years earlier than we have.

Herbert Hoover, as Secretary of Commerce, sparked many improvements in our economy by using government research and and development to spark better private industry practices. We should be doing the same for Solar and other technologies that the rest of the world is getting the jump on.
+1 # John Locke 2012-03-04 09:46
Midwest Tom: If you will look at this field production chart of US oil Production you will see we are producing less oil currently then we did in 1950 and this is not counting the closed refineries. Not only have the refineries been shut but production is also being reduced. That is the reason for the price increase; The Oil Companies control production as well as the refinery to produce the gas for the pump. They were producing more Oil during the 1970's when we had the alleged shortage, than they are producing now.
+15 # Kootenay Coyote 2012-03-03 09:40
There's plenty of us up here in Canada, where Tar Sands development is poisoning then land over a huge area, who know the stuff is better left in the ground. unfortunately, we're presently saddled with an utterly unreliable right-wing Federal government whose only God is Business.
0 # Dave_s Not Here 2012-03-03 14:36
Quoting Kootenay Coyote:
There's plenty of us up here in Canada, where Tar Sands development is poisoning then land over a huge area, who know the stuff is better left in the ground. unfortunately, we're presently saddled with an utterly unreliable right-wing Federal government whose only God is Business.

Wrong! Just ask our "Pastor Harper" who's God he worships (in public, at least).
+6 # reiverpacific 2012-03-03 11:53
Face it folks, we have no say and precious little real knowledge of anything that goes on in the constant manipulation of oil futures and trading, compounded by the wantonly obscure lingo of the head-in-the-san ds economists. We just catch the consequences right where it hurts.
And as "Kootenay Coyote" points out, a conservative Canadian government + an easily manipulated and bought US same is Not what the planet, nor both economies needs.
I really have no solutions as an economic ignoramus but the planet's good, followed in rapid succession by it's inhabitants, are always the entities to bear the burden whilst the traders reap the profits (of course you all know this).
I mean, even I understand and as Hightower points out, jobs are hard enough to come by but the (mostly self-employed) oil dependent demographic as listed in his article, are suffering more than anybody and by default, the food supply.
Another reason to trade and buy locally whenever possible.
+1 # Buddha 2012-03-05 16:51
People with half a brain (unfortunately, not many Americans) could figure this out, when they call this the Keystone XL EXTENSION. The pipeline already goes to existing refineries in the MidWest, so we are already getting any "energy independance" we would get from the tar sands. This is like people believing Obama is a Muslim and while being angry about his association with REVEREND Wright. But there is no convincing the American sheep, they will keep driving their 10MPG SUV's solo commuting to work, and whine about paying 1/2 to 1/3 of what the rest of the developed world pays for gasoline.
+1 # Hank 2012-03-07 17:02
To make it even worse, Keystone trucks trespassed onto Lakota tribal lands yesterday. Several Lakotas who tried to stop this were arrested and jailed.
It seems nobody is safe from Keystone.

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