Rep. Kristi Noem continues to cry that letting TransCanada seize American farmers' land to raise our gas prices is "Right for America."
At least one Texas landowner and one Texas judge disagree. County Judge Bill Harris has blocked construction on a farm where TransCanada seized easement rights through eminent domain for its Keystone XL pipeline. That farm is one of at least 89 instances in Texas where this foreign private company has used eminent domain against American landowners. Is that right for America, Kristi?
TransCanada just reported quarterly revenues rising from $2.06 billion to $2.36 billion at the end of 2011. Their Q4 profit was $375 million. That's $4 million a day. Keep dickering, landowners: TransCanada can afford more than they're offering you.
Our Congresswoman is at least tamping down her job claims about the Keystone XL pipeline. Last month she was Tweeting that Keystone XL would bring 130,000 jobs. She now just says "thousands." Getting warmer... the pipeline may support just 127 permanent jobs.
Oh yeah, and Kristi voted to rush President Obama's decision on the Keystone XL pipeline. She wanted to truncate the regulatory process and require a decision on the State Department permit for the pipeline by the end of this month. TransCanada says they're still working with Nebraska to determine the best alternative route around the ecologically sensitive Sandhills. Effectively, Kristi would have wanted State to make a decision on Keystone XL with less than two weeks to analyze a new alternative route. That's why it's her fault that President Obama had to reject TransCanada's application last month.
Read more! Media Matters summarizes the five big angles of the Keystone XL story to which Kristi Noem and much of the press have not been paying enough attention. (You, dear readers, will not be surprised, since you've read about all of them here):
- TransCanada used aggressive tactics with landowners.
- TransCanada didn't deliver on previously promised tax revenue.
- TransCanada reversed its position on rerouting.
- TransCanada will import much of the steel for the pipeline.
- TransCanada said its pipeline would increase oil prices in the Midwest.
Read, Kristi. You might learn something.
Update 20:01 MST: Watch Congressman Bobby Rush, liberty-loving Demcorat from Illinois, speak up for American property rights. Listen to Congressman Lee Terry, oil-sodden Republican from Nebraska, try to drown out Rep. Rush's words of truth. Rep. Terry and Keystone XL are both out of order.
Turns out that China does not want to process this crappy sludge either and the tree huggers from China are speaking out on this. The tar sands are so toxic to our mother that this must be stopped at all levels. We are at the end of the oil curve and instead of destroying ourselves for the sake of one last drop of this poison, lets work together to find workable solutions. We have one of the best schools in the world for engineers, lets use them and make a profit from them. We have an incredible amount of space to work with here in our state, lets use that for renewables.
Lets put our people to work and stop looking at our belly buttons. We can start by giving Ms. NOem the direction to the door and then gently pushing her out. Me, I see Varilek as the feller who could make the difference for our state. After watching and listening to Ms. NOem's performance, we need to do all we can to make sure the door only goes one way and is closed permanently for her, what a dud.
Just spoke to a friend last night who voted for Noem. (I was surprised that she voted for Noem because she liked SHS) and she said the only thing Kristi Noem has done since being in DC is gotten tanner.
Could be true. Noem is a dud. I think Chris Nelson would have been a better leader.
Besides what's being reported in the press, it seems to me that our own state isn't doing enough to look out for itself in this process.
Other states negoatiated a bond to clean up any spill mess. The GOP in SD is content to let taxpayers pick up that cost if Transcanada chooses not to.
Other states left their tax structures in place and told Transcanada to pay up. SD gave Transcanada huge tax rebates to do what Transcanada was going to do anyway without the rebates. The GOP in SD cut education spending and froze state employee salaries while giving multi-million $$ tax breaks to a Canadian company.
Other states (ND) negotiated to have their oil transported by Keystone II when built. Not clear whether our state has worked out any such deal.
Bottom line for me is, "What does SD get if the Keystone II pipeline is built?" The answer it seems is that our ranchers get their land burdened without adequate environmental protections, SD taxpayers assume a potentially unlimited environmental liability if this foreign corporation or its "limited liability" entities default, and there's really no benefit of any kind to SD.
Please correct me if I'm wrong.
It all makes me wonder if there is someone in Pierre who's going to be making some big bucks on this deal. I want to be clear that I have no info on that, and no one to accuse. But it does seem to me to be the only answer that makes sense.
Well, I suppose it could be that every SD Repub is colossally stupid, but I really doubt that. Not "every" single Repub.
Our state will have another chance at Transcanada. I propose a $300 million dollar yearly entrance fee into our state that we will use to supplement our education budget.
Today Noem tweeted that she still believes it's a pine beetle problem when science says it's due to climate change.
What 'it' really is: http://motherjones.com/blue-marble/2012/02/perfect-storm-fire-overdue-west
Btw; KXL will never be built....
Larry, it will be built straight down the American heartland. The Pacific Ocean is too rough on the Western edge of Canada to place a sea port, thus the oil tankers can't get close enough to fill and head back to China.
We are poised to keep the White House, Senate and take back the House in 2012, Thad.
TransCanada announced yesterday that its (or, his/her, since personhood is associated with gender identity) own projections pushed the start date back to at least 2016.
Watch for Powertech to be repelled, too.
I guess I am stupid. this is a great project to rollbackthe second largest Obama tax increase on the poor (gas prices which are up from $1.75 to $3.50 since Obama took office). the biggest tax increase is the effect of prolifigate spending on the economy and high unemployment levels.
Dominus vobiscum, Mr. Jones.
Help South Dakota grow.
Oh Troy, so you're going to drag that gas price thing out of the closet? Thought you were above that...or is that just your little Valentines Day shout out to Sarah Palin?
So let's review. Who was President when gas first hit $4.00?
What was the Dow Jones average when Bush left and when Obama took office?
Where's the Dow at today?
Who was President when the stock market tanked?
How many jobs were lost during the last two years of the previous administration?
How many private sector jobs have been created in the last 2 years?
What President expanded gun rights in the last 4 years?
What President kissed a Saudi ruler on the lips?
What party's President and congress was it that kept two wars off of the books and out of the budget?
Who was the President that signed a bill that gave unfunded Medicare prescription coverage to seniors?
Wait, was that Obama that put through the No Child Left Behind mandate on the states...and then didn't fund it?
Troy, maybe you can tell us what the highest average gas price was in the last decade and who was the President then.
Sheesh Troy, you're better than that last comment!
This is about Keystone. Keystone lessens dependence on oil and increases supply. That drives down prices.
Good questions. Most reflect poorly directly on Bush and the Democrats who controlled Congress during the last years of Bush (except the wars).
But they all pale in comparison to Obama rolling up more almost 50% more debt in four years vs. Bush and the following policy fiasco's:
1) Stimulus that didn't stimulate
2) Heath care that is destroying future job creation environment.
3) HAFA that destroyed housing recovery
4) Dodd-Frank that is diminishing the capacity of banks to lend.
5) Cash for clunkers that clunked.
I suppose I could think of a few others but you get the picture. Obama perfected Bush's incompetance. Not a good comparison.
meant "foreign oil. Big OOPS
And thanks Larry. And you too. On my bucket list is to learn Latin. Maybe never happen but I don't expect to spend an evening with the Pope either.
Troy, since my responses make no impact on you, let's hear what TransCanada says about Keystone XL's impact on oil prices:
Existing markets for Canadian heavy crude, principally PADD II, are currently over supplied resulting in price discounting for Canadian Heavy Crude Oil.
-------------------------------
Access to the USGC [U.S. Gulf Coast] via the Keystone XL Pipeline is expected to strengthen Canadian Crude oil pricing in PADD II by removing the oversupply. This is expected to increase the price of heavy crude to the equivalent cost of imported crude. Similarly, if a surplus of light synthetic crude develops in PADD II, the Keystone XL pipeline would provide an alternative market and therefore help to mitigate a price discount. The resultant increase in the price of heavy crude is estimated to provide an increase in annual revenue to the Canadian producing industry in 2013 of U.S. $2 billion to U.S. $3.9 billion [Keystone XL Pipeline Section 52 Application, Section 3: Supply and Markets, Section 3.4.3, “Crude Pricing Impact,†p. 7; quoted in Verleger 2011].
---------------------------------
One estimate I've cited pegs that increase around $6.55 a barrel, or 15 cents per gallon of gasoline.
Now, someone, please tell me what part of increase means decrease... because if Keystone XL does get built, I better at least get cheaper gas out of it.
It's all good, Troy: i'll try not to think of Republicans, Israel and the Vatican as the excess of evil....
You're right about the expected higher pricing of Canadian crude due to an outlet for the excess crude Corey.
Down here in Texas they are saying, "not so fast Canadians, we will then control your oil and of course it will cost the Americans more to get it back off the docks."
Keystone will still have the greatest profits of anyone Canadian.
Cory,
Let me give you exactly the same analogy.
Corn is grown in central SD. No train to get the corn out. Price of corn is cheap in Pierre relative to market. Corn prices artificially high n Iowa because they are short corn since it is in Pierre.
Trains start running. Price of corn goes up in Pierre to market levels (ala Canadian crude pricing) and goes does in Iowa (impact of getting corn from Pierre to market.
This is basic economics Cory about market dislocations. Good thing you teach French. Keep your day job and forego the math bonus.
Thanks for giving me real information to prove my point.
Hey what the heck... I thought Cash for Clunkers was a big success, no?
Troy, I don't need an analogy or theory. I give you TransCanada's own explanation of their business case. TransCanada tells its government and its investors that Keystone XL makes oil prices go up and increases revenue for them. Is TransCanada as clueless about economics as I am?
Bill, it was a fiasco.
http://www.washingtonpost.com/blogs/ezra-klein/post/was-cash-for-clunkers-a-clunker/2011/11/04/gIQA42EhpM_blog.html
Even Obama's economic adviser panned clunkers and HAFA (both of which I argued against here on MT)
http://www.politico.com/news/stories/1011/66447.html
Cory,
I will talk slower then. The price of the oil in Canada will go up because it is so expensive to transport it to refineries. But that oil will increase supply of oil at the refineries and DROP the price of gas to consumers.
This is really the simplest I can make it. It might not be addition but it is simple multiplication.
What the Canadians are saying is exactly the same thing a corn farmer in Pierre says: give me efficient transportation of my corn to the user, I will get more money for my corn.
And the user of the corn and Canadian oil will experience Cheaper corn/oil because it will be transported efficiently and reliably to market.
But, again thank you for proving my point.
O.K., Troy, so you're telling me that TransCanada is either (a) lying or (b) ignorant of economics. Why would TransCanada say that their pipeline will increase oil prices when your brilliant analogy clearly shows otherwise? Let me remind you, you're not arguing against me now; you're arguing against TransCanada.
New data released. South Dakota and other red states pork out again:
Federal spending received for every tax dollar paid: $1.58
Rank: 15
Rank in 2005: 8
Federal spending received for every tax dollar paid per capita: $2.21
http://motherjones.com/politics/2011/11/states-federal-taxes-spending-charts-maps
*scratching head* I dunno, Troy, those articles don't really say "fiasco" to me.
Troy, Corey and all, this is probably the best read on XL I've come across in the last 4 years. It will give you an idea of why pricing can move against supply side econ. http://stopbigoilripoffs.com/documents/tar-sands-road-to-china/at_download/file
Eff you, Les.
They are not ignorant of economics and they are not lying. They are saying exactly what I am saying. Let me put more meat on my explanation. The numbers used are illustrative.
Price paid for corn delivered to the Duluth port is $5 a bushel (analgous to Houston). For the sake of the discussion, Duluth is the world outlet and its price is the benchmark.
Pierre elevator pays farmer $4 for corn. The difference is $.50 to transport the corn to Duluth via trucks, $.20 to arrange the trucks and other detailed logistics, $.20 to cover elevator operating costs and $.10 for profit.
Railroad (analogous to pipeline) from Duluth to Pierre is built and train transportation is available for corn transport. The economics change.
Price paid for corn is still $5 (would drop in the case of the pipeline because they now have new sources of oil whereas for simplicity I am presenting the corn from Pierre goes to Duluth in both cases).
Elevator now has to pay the railroad $.20 to transport the corn because rail is cheaper and more efficient for transportation (just as a pipeline is more efficient to transport oil. Why do you think Poet wanted to build a pipeline to transport ethanol?). Plus the logistics cost is only $.15 because it is easier to arrange a unit train vs. thousands of trucks.
Net result: The elevator now can pay the farmer in Pierre more for the grain: $5 Price in Duluth minus $.20 transport cost minus $.15 logistics minus $.10 profit: Price paid for corn in Pierre is $4.55 ($.55 more than before).
This is exactly what your source said as it applies to the price of a barrel in Canada. The introduction of a more efficient transportation means will increase the price paid for the oil in Canada.
The reason this will drop the price of gas to us is as because Canada oil producers will not get all the efficiency from the pipeline.
1) Houston will now have more oil to run through its refineries. More supply drops the price they have to pay for raw material. In the corn analogy, Duluth might now only pay $4.90 for corn to everyone.
2) The "elevator" might now be able to push their profit to $.10.
But bottom line: cheaper and more reliable oil from Canada will increase efficiency and production from refineries in the U.S. and stimulate through competition lower cost of gas.
Two additional things to keep in mind:
1) There are literally millions of miles of pipelines transporting gas around the country and thousands of miles in South Dakota. No gas leaves the refineries (except for local delivery) from Houston. What you buy in Spearfish came in a pipeline somewhere near Rapid and it is then distributed by truck to the gas stations. For instance, there are so many depots for getting gas out of the pipelines in SD there is one near Woonsocket to serve that area, another in Raymond near Huron, and I seem to recall one near Howard.
2) There is actually less environmental exposure from Keystone per mile of pipe because depots (tank farms and just having outlets) creates the greatest risk of spill/problems. The only spill I require in South Dakota over the last 20 years ago happened right here in Sioux Falls at the tank farm. I don't recall a single problem (probably has had minor problems but not newsworthy) with the pipeline between depots. When I look at the map of Keystone, I would guess Keystone will cross at least three pipelines carrying gas.
Good article Les. (Larry, WTF?)
Troy, I don't think the oil market works the same way as the corn market, because the OPEC guys artificially fix the price of crude and regulate supply to match demand. Maybe if we Nationalize our share of the oil market. Hey that's what Canada and Mexico did. Whaddya think bud?
(...waits while Troy goes and takes an AlkaSeltzer...)
You said it yourself Troy, we don't get any gasoline out of Houston. How are we going to continue to fuel our midwest refineries if that Canadian crude bypasses us?
A component you are not taking into consideration is the offshore pricing. When it hits the Gulf it is sitting at the door to the world with the cheapest transportation in the world.
In effect the pipe raises our cost(midwest) of the Canadian crude to the international market price, much higher than our local crude costs for the very reasons you state in your analogy.
We are just breathing life into the earth haters' last gasp in Campaign 2012. KXL is Canada's problem.
I'm still waiting for someone to explain what benefit there would be to South Dakota for Keystone II.
What benefit is there to South Dakota from the legislature's refusal to ask TransCanada and its limited liability partners to post a bond for environmental liability?
What benefit is there to give TransCanada tax breaks to do what they were planning to do anyway without the tax breaks? Why must SD give tax breaks when other states didn't?
Why does the GOP always sell SD and its people short while shoveling windfalls to corporations?
Bill:
I disagree the fundamentals of corn and oil are different regarding economic pressures and realities except the Middle East and their allies (Venzuela) control too much production. Canada/Keystone lessens their control.
Les:
I didn't say we didn't get gasoline from Houston. I don't know where we get it. Looking at a list of refineries, the closest are Colorado, Kansas. Minnesota, and Indiana. There alot of economic factors which determine whether it would behoove us to get gas from a new place (ala where does our existing pipelines for gasoline currently originate).
Regarding your bigger point (getting Canadian crude to Houston will result in it going overseas), two points:
1) If we don't build Keystone, the raw crude will go to China where it will be made into gas with less environmentally friendly plants hurting Mother Earth.
2) It does not raise the cost of crude that goes into our gasoline. It lowers it because of the more efficient transportation (not to mention how much better it is for the environment to ship via pipeline and not on trucks). Even if it is as you assert, our refineries (if they aren't Houston) will have to pay more for crude from Canada, I am very confident on a micro level the more efficient source of North American oil will drive down prices for all of us.
South Dakota could build a pipeline to Alberta for floodwater where the Canucks could refine this crap themselves.
Troy, I read a book about that pricing thing once. Oil prices have been artificially high for decades. And the world goes by prices fixed by OPEC. Nothing "free market" about it. It's monopolistic. Pretty sure I'm right about that. We've never really had a shortager of crude.... ever.
Aha! Just spotted the book on my shelf. It's titled "Energy Victory" by Robert Zubrin. At least I think that's the one. I read a couple on the subject once.
Here's a link to more of Zubrin's thinking:
http://www.thenewatlantis.com/publications/achieving-energy-victory
So, how does the Keystone project fit in here again? (I'm rusty on this topic, so bear with me... I don't have a solid position. Trying to learn.)
I agree Bill. OPEC controls too much of the market. To break them (and all oligarchies) is competition (Canada, ND, offshore oil), nuclear, coal, and cost effective alternatives.
"Molybdenum sulfide proves to be robust in catalyzing hydrogen generation from water:" @sciencemagazine.
In short Troy, the energy companies own the sum total of what we know as green or competitive due to the tax breaks given them for these technologies. Won't be competition there.
I wish I could agree with you on the oil prices, but it doesn't compare to the ag commodities, at least not quite yet. Given more power to the Monsanto, food and fuel will be controlled equally.
That's the point, I think Troy. It doesn't do us any good to just dump more supply into a market we don't control and sell it to other contries for the same artificially inflated prices, does it?
Don't we have to use it ourselves to realize the lower prices or at least stop putting money into the pockets of our enemies? I suppose there is an argument for our selling more to China than the OPEC nations do, but not a very good one, I don't think.
We'll still be putting money into their pockets unless we can really hammer them on price.
And then, of course there is the pollution of the atmosphere, the depletion of a non-renewable resource, the retardation of newer, better, cheaper, cleaner energy alternatives (...not to mention my personal desire to give Big Oil the same kind of corn-holing they have been giving the American people for the last 100 years or so ;^)
Hey, Les: now go back over to the War Toilet and beat up on Angie Buhl some more.
Bill,
There is ONE and only one way to lessen the impact on monopolies. Give them competition. We absolutely have to get more supply on the market.
Like money is green (spends the same), oil is black regardless of its source (essentially burns the same, yes I know there are grades). The only variable is price.
And the only thing that affects price is supply and demand. We need more supply and less demand to drive down prices. Instead of manipulating the market to get what we want, the cheaper and more efficient way is to beat them (OPEC/oil companies) is increase supply and decrease demand.
No matter what we desire, the most efficient way to power cars is oil. The most efficient way to get electricity is nuclear (coal is second).
Our goals are the same but I believe my way is more efficient (better for all, especially the poor) and effective (quicker results). Executive/government fiat only creates roadblocks that ultimately only benefit the rich and powerful because they have the resources to survive and upstarts never get to enter the market.
"No matter what we desire, the most efficient way to power cars is oil. The most efficient way to get electricity is nuclear (coal is second)." Your opinion only, Mr. Jones.
Dutch kid-powered school bus: http://grist.org/list/kid-powered-school-bus/
Larry, not an opinion it is an economic fact. The most efficient (defining most miles per total cost of energy and capital cost of the car) way to power a car is with gas under current technologies. Electric cars would be close if we got our electricity from nuclear. Hybrids are not "electric" because they recapture previously lost energy generated from gas. Same thing for nuclear.
And here is my rub with the current energy pursuits (by Republicans and Democrats). They don't begin the focus on cost per energy unit. Expensive energy hurts the poor the most. I'll drive my miles and so will you. But for those with limited resources, expensive energy depletes resources from other important and sometimes critical needs.
And not being conscious of energy costs is a huge drain on jobs (makes our manufacturers less competitive). And, all the environmental impacts are looked at too parochially. Jobs created in China do devastating things to Mother Earth because they rely on a preponderance of dirty coal to power their cities and plants.
http://1.bp.blogspot.com/-WA5MzTEwvkQ/TyAbe6XPY2I/AAAAAAAAAxM/dQ8xQ0OuRuA/s400/IMG00011.jpg
http://www.facebook.com/pages/Green-Pedal-Electric-Bikes/106588309379001
So Troy, are you saying that we should only do the Keystone deal if there can be a guarantee of lower gas prices at the pump?
And that the oil companies can't ship any excess oil out until the US/Canada is 100% self reliant?
(Seems like I read somewhere that the US has now become a net exporter of petroleum products. If that's the case, why is ANY of the oil we buy coming from the Middle East? Why not embargo shipments from there until they learn to play nice? Just askin'.)
The scientific word now is that Canada will not even be hospitable in 2050 if this rape continues. So I guess you are saying that unlike the corn train to Duluth, this oil drain will have a very limited shelf life because there will be no one to put the sludge in, brilliant. I would also ask that you would think about what we shall do after that pit can no longer be mined, then what? It is plain that 30 years or so, is not such a long time and that seems to me not worth the gamble. Lets also remember that the corn train does not run over our major water system that grows the corn in the first place. China does not want to process it either, it is too dirty for them. Go with the wind for energy and bring jobs to our state, that would be more productive in the long run and we could still grow the corn.
Bill, I'm saying none of that. Command and control manipulations don't work and won't. Economic laws can not be broken. They always push through no matter how hard you try. The question is whether they will push through efficiently or not.
Keystone will get more oil to Houston. This is more gas production or less Middle East oil will be imported depending on what the economy demands. In and of itself, these are all good things.
It would be wonderful so if iour supply of energy was in excess of demand and led to exports (good for the balance of trade). I don't think this will be the case but it isn't bad necessarily.
However, there is non-economic things to consider. Our current reliance on foreign energy is bad for national security (reliance plus the transfer of wealth to places that are our enemies). Conversely, a case can be made (I don't make it as I'm not versed in these matters) that if we became energy self-sufficient it may be good for us to not export our excess unless it is needed for the balance of trade. Deep and complicated issue I don't have a very good grasp of.
Balance of Trade is another thing we get messed up on. We focus on types of exports and imports instead of the balance. The very best thing would be higher exports and higher imports vs. what we often do is pursue policies that reduce both. The reason more is better is efficiency/division of labor/allocation of capital where each area does what they do best. We export what we do best and import from others what they do best. The efficiency does two things: Increase our standard of living and increases jobs which drives up wages of working people.
http://journalstar.com/business/local/buffett-s-railroad-among-winners-from-keystone-denial/article_e88594a9-cb14-5235-982f-d66c76cf31e5.html
So you're saying let the "free market" break the OPEC pricing juggernaut?
(Troy, I'm tempted to bring up the "animal spirits" thing at this point, but won't because I'm already in way over my head here, bud.)
Breakthrough announced in wood biofuel pyrolysis technology.
If Bakken oil hits the Mandan or Billings refineries, it brings anywhere from 30 to 100 per barrel. If that same oil hits Houston, it sits at the world market price of 100??
Maybe more oil on the market because Canada can produce unlimited so to speak, but with China buying up all the production they can get their hands on, short term this isn't going to do anything for us in the US but cost us at the international rate for any oil that flows through XL which means higher prices short term for darn sure.
I don't think the process of manipulated markets transitioning to honest supply and demand will be much fun for any of us so although I wish for honest markets, I'm not sure I want the blowup.
Elevated mercury emissions destined for downwind states?
http://my.firedoglake.com/wendydavis/2012/01/19/transcanada-may-shorten-xl-pipeline-bypassing-need-for-federal-approval/
Troy, your hypothesis remains supported by noting more than your wishful econ textbook thinking. I guess we're just having a disconnect here. As I understand the prevailing opinion among oil market analysts, the problem for Canada is that the bottleneck at Cushing, Oklahoma, means the U.S. has too much supply of Canadian oil. That glut keeps current prices for "domestic" West Texas Intermediate lower than "foreign" Brent crude. We get cheaper gas for that oil because we're the only buyers available.
Keystone XL clears that glut. It reduces our domestic supply. It allows Canada to "erase the price discount", since it gets connected to the global market right alongside Brent crude.
Now maybe Keystone XL brings about a minor reduction in global prices (indeed, I would think more supply would mean lower prices overall), but our local benefit comes from the Cushing glut discount. And I want to see an outside source, not just our hypothesizing, that says Keystone makes prices anywhere go down... because that is most definitely not what Keystone XL and the market analysts are saying.
"because that is most definitely not what Keystone XL and the market analysts are saying."
Cory, show me where they are saying that. Your previous quote says exactly the opposite. You just don't seem to understand what it says.
Les,
Your comment is nonsense. If China will buy up all the oil, they will increase demand which will mean increased prices. The only temper is to get Canadian oil to market to match the increased demand.
No, Troy. Show me where anyone else confirms your analysis. TransCanada and the news story I link immediately above say that WTI crude goes up in price. We in mid-America thus pay more. It's pretty straightforward.
Troy, I hate copy/paste but it is late and it is not me you are arguing with, I wish you were right.
I see 14-16/barrel discounts below and know of producing wells with much higher discounts than the averages this shows.
I don't argue with Birkshire Hathaway rail plans that put this together.
•
Where does the crude want to go?
–
Currently “supply push†vs. “market pullâ€
•
Average North Dakota wellhead price WTI minus $12.00
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As infrastructure develops, crude will seek the highest value market
•
Gulf Coast –Houston, Beaumont/Port Arthur, Lake Charles, St. James LLS market trades at a premium to WTI (usually between $2.00-$4.00/barrel)