Back in January Congressional Republicans ensured the rejection of the Keystone XL pipeline by imposing a review deadline that the Obama administration had said was not feasible. At the time, a GOP aide admitted to TPM that "It's a question of whether we'd rather have the pipeline or the issue." Ultimately, they chose to force the issue even though they knew it would likely delay or kill the pipeline. Fox News is displaying that same mindset now as Obama again announces support for the southern portion of the pipeline.
The message from Fox, as articulated by a Fox Nation headline, is that the Cushing pipeline from Oklahoma to Texas is "worthless" without the northern half of Keystone XL:
- Bill O'Reilly: "How is the stuff supposed to get from the top to the bottom if you don't have the top half?"
- Eric Bolling: "If you're only starting it halfway, there is no straw between Oklahoma and Canada ... So what's that going to do? You have a pipeline that's gonna be -- remain empty."
- Dana Perino: "It's like the bridge to nowhere."
- Steve Doocy: "They're going to open the southern leg of the Keystone pipeline, just not the northern part that we really need."
- Brian Kilmeade: "He's expected to announce plans to fast track the southern portion of the controversial pipeline ... Of course, it's not going to connect to anything."
- Michelle Malkin: "This really is a pipeline to nowhere that he's standing in front of trying to appropriate a piece of it when, of course, he had his boot on the necks of the people who wanted to extend it and finish it and make it worth something."
- Megyn Kelly: "This is like creating a no-fly zone around the North Pole and then telling Santa he can have carte blanche access to Florida."
Either these Fox hosts are deliberately misleading their viewers or revealing just how shallow their understanding is of the oil pipeline they've been pushing for months. Fox has it backwards. As the State Department has explained, it's the southern portion, not the northern part of the pipeline, that oil producers really want right now:
There is currently excess cross-border pipeline capacity, but limited connections to the U.S. Gulf Coast refineries.
A Department of Energy analysis came to the same conclusion:
There is now surplus capacity for moving WCSB [Canadian] crudes cross-border into the USA. However, capacity to move WCSB crudes via pipeline to the U.S. Gulf Coast remains limited to less than 100,000 bpd [barrels per day] ... In every scenario studied, with or without KXL, the excess cross-border pipeline capacity persists until after 2020.
So even without the northern portion of Keystone XL, there will still be more than enough room in existing pipelines running across the border with Canada for at least 8 years.
The Cushing pipeline will boost the profits of oil producers in the U.S. and Canada by allowing them to raise their prices and export their product to consumers overseas. TransCanada said as much in a filing with Canada's National Energy Board:
Existing markets for Canadian heavy crude, principally PADD II [U.S. Midwest], are currently oversupplied, 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 this oversupply. This is expected to increase the price of heavy crude to the equivalent cost of imported crude. 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 US $2 billion to US $3.9 billion.
Shauna Theel contributed to this post.