Last week the State Department released a report indicating the Keystone XL pipeline would have little impact on the environment and would create more than forty thousand jobs during construction. With this news (confirming what we already knew), why isn't the Obama administration moving forward on developing this pipeline? Because regardless of whether or not the pipeline is built, his cronies stand to benefit.
It is already widely known that Obama crony Warren Buffett has gained from the lack of construction on the pipeline. Without the presence of pipeline, much of the oil developed in the Canadian oil sands are transported by train. Per Bloomberg:
Warren Buffett’s Burlington Northern Santa Fe LLC is among U.S. and Canadian railroads that stand to benefit from the Obama administration’s decision to reject TransCanada Corp. (TRP)’s Keystone XL oil pipeline permit.
With modest expansion, railroads can handle all new oil produced in western Canada through 2030, according to an analysis of the Keystone proposal by the U.S. State Department.
“Whatever people bring to us, we’re ready to haul,” Krista York-Wooley, a spokeswoman for Burlington Northern, a unit of Buffett’s Omaha, Nebraska-based Berkshire Hathaway Inc. (BRK/A), said in an interview. If Keystone XL “doesn’t happen, we’re here to haul.”Interestingly, Buffett did not buy this railroad until a year after President Obama was elected. Per the American Thinker:
A year after the election of Obama, Warren Buffett bought a giant railroad, the Burlington Northern Santa Fe. The BNSF has more than 32,000 miles of track and right-of-way in this nation, running from the west coast and through the agricultural heartland of America. It is also hauls coal from the mines in Montana and Wyoming and is the railroad with the best existing north-south infrastructure. In fact, it's quite well-situated to perform precisely the task for which TransCanada has proposed to build a pipeline.
Should the pipeline fail, the oil will still be extracted, but it will then be transported by rail, and Mr. Buffett, thanks to the efforts of his friend Mr. Holland, will be uniquely situated to derive a fortune from that business, as well as enhance the value of his holdings in Conoco-Phillips petroleum. Is it possible that Warren Buffett's assistance to Obama in both policy and public relations lately may be his way of trying to tip the regulatory scales in his favor? After all, nothing says "I love you" to a Democrat better than a public plea for more taxes.Additionally, Buffett's Union Tank Car Co is raking in loads of cash from transporting oil from the Bakken formation in the northern plains states. If built, the pipeline would transport 100,000 barrels of oil a day from the North Dakota portion of the Bakken alone.
Fast forward to this year. Just last week, the Washington Free Beacon reported a between China and a Canadian oil company with holdings in the Gulf of Mexico and in Canada's oil sands:
The Chinese National Offshore Oil Corporation (CNOOC) reached a “definitive agreement” with Nexen, Inc., a Canadian energy company, announced on July 23, 2012, to buy all of the company’s outstanding public shares. Nexen has holdings in the Gulf of Mexico and Canada, giving the Chinese government access to millions of barrels of Keystone XL and Gulf reserve oil.
Nexen’s holdings in the Gulf, coupled with the Chinese government’s ownership of CNOOC, meant the Treasury Department’s Committee on Foreign Investment in the United States had to approve the takeover, which it did on Feb. 12.Judicial Watch, an organization focusing on transparency and integrity in government, announced last week that they are suing the Obama administration for documents relating to the approval of this deal to communist China. In their press release, Judicial Watch notes multiple ties between the Obama administration and investors who profited from the deal:
* Taconic Capital, which reported in its third quarter SEC filing that it had acquired six million shares of Nexen between July 1 and September 30, 2012. Taconic’s founder and managing director is Frank Brosens, an Obama bundler who has raised more than $1 million for the President. Brosens was Timothy Geithner’s first choice to run the TARP (Troubled Assets Relief Program).
*Farallon Capital Management LLC, which bought 8.7 million shares of Nexen (1.65 percent of the company) between July 1 and September 30, 2012. The founder of Fallon Capital is Thomas Steyer, is a long-time Democratic fundraiser who ridiculed Romney’s energy plans at the 2012 Democratic National Convention.
*Eton Park Capital Management, which bought 6,737,000 shares (1.28 percent) of Nexen. Eton Park was founded and is directed by Eric Mindich, a bundler who raised more than $71,000 for Obama this cycle and has given more than $500,000 to Democratic candidates since 1990.
*D.E. Shaw & Co., which increased its position by 5.8 million to 6.5 million shares, or 1.22 percent of the company. D.E. Shaw was founded by David E. Shaw, an Obama bundler in the $200,000 to $500,000 range. He also sits on the President’s Council of Advisors on Science and Technology, as he did under the Clinton administration.
*Covington & Burling LLP, in which Eric Holder was formerly a partner, was hired by Nexen to lobby on behalf of the acquisition’s approval.While the Obama administration continues to hem and haw about whether or not they will ever approve the pipeline, his cronies continue to benefit from the lack of a pipeline. Buffet's train company ownership rakes in the dough from the lack of the pipeline. Nexen will benefit regardless of whether or not the pipeline is built as the Washington Times notes:
If not through Keystone, mined oil will be transported by rail, truck, or planned pipelines in Canada. Last month, the China Offshore Oil Corporation (CNOOC) completed the purchase of Nexen, a major producer of oil from Canadian sands, for $15 billion. CNOOC would not have purchased Nexen without assurance by the Canadian government that the oil can be harvested.Last April, White House press secretary Jay Carney said that approval of the pipeline would "preemptively sacrifice American sovereignty". However, in approving this deal with the Chinese government, the Obama administration is allowing the largest foreign holder of our debt greater access to North American energy resources--resources that America should gladly develop in concert with an ally. Where is the protection of American sovereignty in that?
The biggest critics of the pipeline are environmentalists. However, the lack of a pipeline is likely to cause more environmental problems than the pipeline. Transportation of oil by rail or road cause more injuries, death, and environmental damage than pipelines.Additionally,transport of the oil to China will use large amounts of energy (i.e. more carbon emissions). Rejecting the pipeline is not an environmentally noble decision; it's just another example of how President Obama rewards his cronies at the expense of the American people.
Crossposted at Palin4America and The Speech A Time for Choosing.