Will there be a decision on the XL Pipeline in President Obama’s State-of-the-Union Address tomorrow?

The Antique Rock n’ Roll Road Show starring Neil Young and his backup group Suzuki and the Synics rolled into Canadian towns last week making their noise, their money, but then they saw their shadows and disappeared. I suppose they’ve gone looking for louder amps so people will listen to their rants on the oil sands. Good decision. Good luck.

One person who has also made a decision in the decision-coin-tossing Gold Medal Competition is President Barack Obama.

No, not a decision on the XL – he has established what is cerebrally called, in hushed tones, the Quadrennial Energy Review (QER), which is meant to ensure that “federal energy policies meet national economic, environmental and security goals.”

The White House further enlightened us saying, in part, that the QER will “help strengthen our energy security and the health and resilience of our planet for future generations.” We are now going intergalactic!

If I read the QER correctly, every four years, these policies will be “reviewed” (assuming you have a policy to actually look at), and then somehow there will be a process on how to make a decision, or is that why there is a gap of four years? Is four years the decision time span? Now that’s pressure.

Bulletin to the career bureaucrats on both sides of the 49th parallel: Industry and consumers, each powerful electoral bases do not need more plans to plan the plans. They need action – be the outcome positive or negative – to the concerned parties in any project.

The XL pipeline has been analyzed in more detail and by more “experts” than the Shroud of Turin.

The final, and I use that word optimistically, environmental assessment report is due any day now…. this year. Then it becomes beyond laughable. The report goes to eight federal agencies that have three months to decide if the XL is in the national interest.

Wait, it gets better.

Their report then goes to the State Department for a National Interest Determination. The eight agencies then have 15 days to appeal whatever the State Department has declared.

Then things really slow down, if that’s possible – from the State Department, the XL proposal, (because that is all it is and has been for six years), is then delivered to the desk of President Obama where it will play 3rd fiddle to the executive requisition order for a new teleprompter.

There is no time constraint on a presidential decision at this point in this game of political Trivial Pursuit. With the mid-terms in November, and the Democrats desperate to control Congress by taking the Senate from the Republicans, Obama will not risk a decision on the XL until after November for fear of diluting electoral support depending on which way he goes.

If there’s a ‘yes’ on the XL he loses the environmental activists; if ‘no’, he loses the blue collar vote.

While all of this, “Mirror, Mirror on the Wall,” feather puffing is going on, the oil industry and its infrastructure partners have moved forward not sideways.

The southern leg of the XL is now delivering 700,000 bpd of Canadian and Bakken crude from the Cushing bottleneck to the Gulf refining hub. Another 450,000 bpd will follow the same route this quarter with the twinning of the Enbridge Seaway line. That is good news for crude producers in both countries. However, we are just moving the Cushing congestion to the Gulf as refineries are running at capacity. This is easily solved if Barack Obama approves the export of domestic crude. If no exports are allowed, Bakken production will slow and jobs will be lost.

That needs a decision Mr. Obama. He’s heard this song before; but he didn’t like it the first time and he won’t be changing his tune.
~The Grouch

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Roger McKnight is the Chief Petroleum Analyst with En-Pro International Inc.
Roger has over 25 years experience in the oil industry, and has held senior marketing management positions responsible for national and international accounts. He is the originator of the card lock concept of marketing on-road diesel that is now the predominant purchase method of diesel in Canada. Roger's knowledge of the oil industry in North America, and pricing structures has resulted in his expertise being sought as a commentator by local, national, and international media. Roger is a regular guest on radio and television programs, and he is quoted regularly in newspapers and magazines across Canada.

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