With all of the attention being paid towards the pipeline these days, it seems to me that the pipeline protesters are missing an important part of the story- perhaps intentionally. The big question is, what happens if the Northern Gateway & Keystone XL pipelines don’t get built? Will they shut-down the oil sands? Hardly, because there is another solution already waiting for us- trains.
It’s no big secret that railroads can carry oil. The original robber barons John D. Rockefeller & Henry Flagler spent their careers building, buying and operating both railroads & pipelines. One of the reasons behind their company, Standard Oil, being broken up by the Sherman anti-trust act was because they were manipulating and making covert deals to set the rates for rail freight. The 1% have been manipulating this sector since the oil business began.
In 1874 Rockefeller began purchasing pipelines with a devious plan to buy oil refineries. Once he owned the pipeline he would cut-off their supply of oil and buy the refinery at a deeply discounted price. When alternative companies tried to build pipelines he would buy-up land in their pipeline’s path and block them from completing their projects. As I wrote a couple of days ago in my article on TIDES Canada- Rockefeller is the granddaddy of pipeline politics.
Today we have some new players in the ‘rolling pipeline’ gang. Warren Buffett is a major shareholder in the BNSF railway, Bill Gates is the largest single shareholder in CN Rail, and Bill Ackman is the largest single shareholder in CP Rail. Buffett & Gates are very close friends- all three of these men have an interest in seeing the demise of the pipelines.
When the Keystone XL pipeline was shelved, Buffett was widely seen as the victor. Ever since then BNSF rail has been working on expanding their capacity of carry oil. Keystone would have carried 700,000 barrels per day (B/pD)- currently, BNSF is able to carry 300,000 B/pD. But, Buffett is busy expanding their capacity. According to a letter printed in the National Post, BNSF could be expanded to carry over four million B/pD.
If this number is accurate, the industry would have to build almost six pipelines to match the capacity of the railway. Each pipeline takes an enormous amount of investment, and takes a long time to build. Expanding rail capacity is easy- build some terminals and buy more tanker cars and engines. A single train can carry somewhere around 110 tanker cars. Estimates on expanding rail infrastructure is that it costs costs 1/10th of the capital of expanding pipeline infrastructure.
CP Rail is also in the middle of an oil boom- in their case, they are carrying oil from the Bakken shale reserves in Saskatchewan, Montana and North Dakota. In 2009 they were running 500 tanker cars, in 2011 they ran 13,000- in 2015 they plan to be running 70,000 cars. Bill Ackman is a very happy man.
Standard & Poors estimates that moving oil by a pipeline costs $7 per barrel. What is interesting is their estimate for moving oil by rail- depending on the type of train, volumes of oil, and number of cars on each train they estimate the cost to be $6-$8 per barrel. So, it may actually be cheaper to move oil by train than by pipeline- and, without such a large investment.
There’s been a lot of talk and speculation over whether the anti-pipeline crowd has been bought-out by American billionaires. Most of this discussion is centred around the TIDES Foundation- an organization that is partially funded through the petrodollars from Pew & Rockefeller. TIDES isn’t the only player, but there is a commonality between the people and organizations backing the pipeline fight- most of them are Obama Democrats.
There’s an interesting story about one of these groups. 350.org, led by Bill McKibben, is an organization that was deeply involved in the protests against the Keystone XL. Ralph Nader was at one of their demonstrations and complained that McKibben (who was wearing an Obama pin while he was on-stage) forbade the speakers from making any criticisms about Obama. Nader also mentioned how the movement was backed by the Amalgamated Transit Union (ATU) and the Transport Workers Union (TWU)- both have members who work for BNSF rail.
Warren Buffett & Bill Gates are also Obama Democrats…
One of my first memories as a child, back in 1973, was sitting in my grandparent’s car in New York in a long line waiting to buy gas. Ever since that time one of the most important jobs of any American president has been to assure the supply of oil, and to keep the price as low as possible. Obama faces the same challenges today- if he is unable to show the American people that he is securing their oil, he has a good chance at losing the next election.
Some people claim that it is a wild conspiracy theory to believe that the Americans are interfering with Canadian politics over oil- but, they are either ignorant of, or don’t want to see the facts before them. Curiously, many people in this group are the same people who are complaining about how the US went to war in the Middle East to secure oil supplies.
The reality is that it would be completely shocking if the Americans weren’t interfering with Canada over our oil. History shows us that- and, curiously, the people who are backing the battle against the pipelines are the very same people who support the current US government. Can you see the correlation here?
Regardless of whether one agrees with the Northern Gateway pipeline project or not, all Canadians should be very weary of other countries exercising influence over our government without full disclosure of their intentions. What’s happening right now doesn’t pass the stink test- there are too many parties involved who have ulterior motives. If Canadians are to make an educated decision on the future of our oil reserves we must clear-out foreign influencers and make our own decisions.
Otherwise, we’re on the fast-track to becoming another bananna republic ruled by a foreign elite…
My next story on this subject will cover the hypocrisy of the environmental movement in the pipeline battle in ignoring these foreign interests. With their intense focus on stopping the pipeline, they are missing many important environmental & social issues that will come as unintended consequences.