Watching the Biden administration go hat-in-hand to ask for more oil production from the despotic regime of Nicolas Maduro in Venezuela reminded me of the reason why the Keystone XL Pipeline was such a key system for U.S. energy security. According to the U.S. State Department in 2014, America’s energy system had a need for more heavy crude from Canada to replace declining volumes from Mexico and – you guessed it – Venezuela.
“Gulf Coast refiners’ traditional sources of heavy crudes, particularly Mexico and Venezuela, are declining and are expected to continue to decline. This results in a situation where the refiners have significant incentive to obtain heavy crude from the oil sands. Both the EIA’s 2013 AEO (EIA 2013a) and EnSys WORLD model indicate that this demand for heavy crude in the Gulf Coast refineries is likely to persist.” [emphasis added]
Students of history will remember that the Obama/Biden administration was in office in 2014. That Obama/Biden State Department document went on to discuss the fact that, lacking safe, clean pipeline capacity to increase imports of heavy crude from Canada, the industry had in recent years dramatically increased imports of the crude by truck or rail.
Moving crude by truck or rail is far more polluting and hazardous than moving it by a brand new, environmentally sensitive pipeline – which the Keystone XL system, if completed, would be – and thus was not consistent with the environmental objectives of the Obama/Biden administration. But the heavy crude was needed because most refineries along the Gulf Coast are set up to process that grade of crude.
In a recent exchange with Peter Doocy of Fox News, White House spokesperson Jen Psaki offered this disingenuous statement about Keystone XL: “If we’re trying to bring about more supply that does not address any problem,” Psaki said. “The pipeline is just a delivery mechanism – it’s not an oil field, so it does not provide more supply into the system.”
This is, of course, a lot of stuff and nonsense, as the late James J. Kilpatrick would have said. It is completely fair to note that, had President Biden not cancelled the cross-border permit for Keystone XL on his first day in office, that pipeline system would likely be in service today, and would be bringing as much as 900,000 barrels of crude oil into the U.S. system. That’s more than enough to offset volumes of crude coming into the U.S. from Russia, and to eliminate a need to offset those now-banned Russian volumes by begging for more such heavy crude from Venezuela.
It’s also fair to note that, as the New York Times reminded this week, Venezuela’s struggling oil companies have in recent years entered into myriad partnerships with Russian oil companies, and that the two countries are strong allies. Thus, by sending representatives to Caracas to ask for more oil, the Biden administration essentially offers a financial lifeline to Russia and Vladimir Putin.
It is completely fair to point out that none of this bizarre oil diplomacy would have been necessary had Biden just left Keystone XL operator TC Energy alone and let it complete what would be the safest and most environmentally responsible pipeline system in the country.
So “here’s the deal”: The Keystone XL pipeline was going to be built to offset declining imports from Venezuela, because Canadian oil is the same type as what they produce in Venezuela. The White House canceled the Keystone XL pipeline and they are now asking Venezuela for more oil. The White House is acting like those are completely separate events, but it’s actually a case of cause meeting effect.
And now you know the rest of the story.
