Tag Archives: political economy

Some Empirically Determined Pipeline Benefits

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A study prepared by the SMU/Cox’ Maguire Energy Institute for the Consumer Energy Alliance has some interesting data from the Keystone XL leg that connects Cushing, OK, with Nederland, TX (built because it’s a purely domestic leg and so did not require President Barack Obama’s personal approval). The figure below presents a map of the pipeline and some proposed adjuncts to it. The Gulf Coast Project is the section of the Keystone XL pipeline project that connects the two towns, and it was open for business last January, so the empirical data are current.Keystone-System-Map

Here are some of the short-term benefits of the project’s work and a couple of longer term benefits:

  • $2.3 billion in private-sector investment
  • 11 million+ hours of labor completed by 4,844 American workers
  • 50+ contracts with US manufacturers and companies that built the pipeline and associated equipment, spread across the country: Arkansas, California, Georgia, Indiana, Kansas, Louisiana, Maryland, Michigan, Minnesota, Missouri, New York, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, and Texas
  • manufacture of 485+ miles of high-strength, advanced oil pipeline (36-inch diameter) and associated equipment: thousands of pieces of equipment used to build transformers, meters, electric motors, cabling and electrical equipment; piping assembling and structural steel for supports; etc
  • 2.25 million barrels of new oil storage capacity at Cushing
  • 6 modern pump stations

Some broader results of the pipeline:

  • pumped $3.6 billion into the Texas economy, $2.1 billion into the Oklahoma economy
  • boosted local tax revenues by millions of dollars
  • Prague, OK: “doubled our city sales tax receipts”
  • full RV parks from the construction effort contributed as much as $8,000 a month in electricity fees alone to the municipal utility
  • tax revenue available—and used—to improve education, local infrastructure, and public services
  • Local restaurants, hotels, and businesses experience a significant boos

This table summarizes the overall economic impact of the project:

  Oklahoma Pipeline Impacts Texas Pipeline Impacts
Total Economic Activity $2,143,364,856 $3,638,561,905
Labor Income $1,041,174,418 $1,696,054,834
Employment (person years) 15,852 26,924
Total Taxes $72,384,852 $144,992,343
Indirect Business Taxes $50,339,639 $112,533,584
Direct Business Taxes $22,045,213 $32,458,759

Many will argue that most of these effects will disappear in a few years, even as soon as the pipeline builders leave. Since the results are temporary, why bother, especially given the risks of an oil pipeline? Leaving aside the fact that pipelines are safer than trains for transporting oil and natural gas, ask the folks who’ve gotten these “temporary” fiscal results whether they think any of it was “worth it.”

The Obama Recovery is in Full Swing

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We’re booming now, in our post-Panic of 2008 recovery, so much so that the Fed lowered its expectation for the US’ 2014 GDP growth to 2.2%—a sharp reduction of their 2014 estimate of just three months ago of 3%.

Oh, wait—did I say “booming?” Hmm….

As a beer ad once said, with a different slant, it doesn’t get any better than this. Not with Democratic policies.

Seattle’s Minimum Wage

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Here‘s a part (certainly not all) of the Left’s rationale for the $15/hour minimum wage just passed in Seattle. It’s from FoxNews‘ cite of David Goldstein, of whom they refer as a “Seattle blogger.”

If some jobs are lost, but we lift tens of thousands of low-wage workers out of poverty, that’s a net plus in the long run[.]

Which it would be, were this accurate. During the creative destruction that goes on all the time in a free market economy, jobs are lost and many more created—not only for low-wage workers, but for all workers. But the jobs that are lost due to government mandated minimum wage laws are exactly those of low-wage workers, who are priced out of the job market. There won’t be tens of thousands of low-wage workers lifted out of poverty by this law, these low-wage workers now will be trapped in no-wage poverty because they can no longer get jobs.

The simple fact is, the jobs are low-wage (notice that: the jobs are low-wage, not the workers in those jobs) because the value of the work—not of the worker—is so low.

And the Left adds this bit of rank cynicism:

It may very well be unfair, but unfair regulations are not illegal. The government distinguishes between different types of businesses and different types of industries all the time.

Because, you know, shut up.

Pipelines

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The Canadian government has approved a proposed pipeline to the Pacific Coast that would allow Canada’s oil to be shipped to Asia.

This is oil that would be flowing to American refineries through a pipeline that would be up and running today, if the Obama administration hadn’t stonewalled the Keystone XL pipeline proposal all these years.

Remember this in the fall and in 2016.

In Which Russia Creates an Opportunity

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Russia on Monday cut gas supplies to Ukraine as a payment deadline passed and negotiators failed to reach a deal on gas prices and unpaid bills amid continued fighting in eastern Ukraine.

Ukraine’s Naftogaz company head Andriy Kobolev said Russia had cut the supply of gas to Ukraine, but that Ukraine can manage without Russian gas until December.

There’s no reason at all we can’t fill this newly created market with American natural gas, even if it will take longer than next December to get the delivery chain up and running.

By extension and demonstration, this also creates a market opportunity to sell American natural gas throughout Europe. Even with a seaborne “pipeline,” we can deliver at a lower price than Russia can.

All we need is an administration willing to take advantage of the opportunity.