Keystone XL runs afoul of economics law
The company building the controversial Keystone XL pipeline no doubt wishes Energy Secretary Rick Perry had been right last week when he attempted to explain the law of supply and demand.
At a coal-fired power plant in West Virginia, Perry recently dismissed worries about the future of coal by saying, “Here’s a little economics lesson: supply and demand. You put the supply out there and the demand will follow.”
As any first-year economics student learns, supply follows demand. Perry could call TransCanada Corp. of Calgary, Alberta, for verification. The company has spent $3 billion on what’s planned to be an 875-mile, $8 billion pipeline from Alberta’s oil sands to Steele City, Neb. There it would link up with existing pipelines that would carry the thick, high-sulfur, tar-sands oil to refineries on the Gulf Coast.
Since its inception in 2008, the project has been dogged by environmental concerns that brought opposition from the Obama administration. President Donald Trump greenlighted it in March. But now, The Wall Street Journal reports the law of supply and demand has raised its ugly head. There’s an oversupply of oil. The benchmark price is about 38 percent of the $130-a-barrel price in 2008, when the Keystone project was proposed.
TransCanada is having trouble getting commitments from oil companies to use the pipeline, and has said it wants commitments for 90 percent of the pipeline’s capacity before it continues building. Keystone XL will be capable of moving 835,000 barrels a day, with an average transportation toll of $8 a barrel. A transportation toll of $8 for a $35 barrel of oil doesn’t make economic sense.
American shale oil, plus falling prices for solar and wind energy, have caused analysts to predict that oil prices won’t recover anytime soon.
If Secretary Perry wants to outline a “little economics lesson,” he could point to a company that bought 875 miles of pipe for oil nobody wants, still facing opposition from farmers in Nebraska and an accounting problem. and that it is illegal for officers to interfere with those doing so. The ruling, by the 3rd U.S. Circuit of Appeals in Philadelphia, is a welcome development and police departments should make sure their officers understand it.
This is the sixth time a federal appeals court has upheld the public’s right to photograph and film officers in public. Even without the ruling, it would be virtually impossible, given the proliferation of smartphones, for officers to halt the videotaping of major incidents unfolding in crowded public settings.
The ruling is more likely to afford protection to the lone bystander who pulls out a phone and starts filming. At the center of the ruling were the cases of a college student cited for filming police as they broke up a party outside of a Philadelphia house and an activist who recorded officers arresting a fracking demonstrator.
Police sometimes discourage filming. As the 3rd Circuit ruled, however, smartphone video cuts both ways. It has sometimes discredited officers’ conduct and other times helped to clear them of wrongdoing.