A Keystone Hack

Well, we have reached another milestone in our permission-based economy with the Administration's rejection of the Keystone Pipeline.  We have zillions of miles of pipelines and are actually wasting energy and creating environmental messes moving the same oil by the inferior option of rail, but somehow this one pipeline had to be opposed.

Actually, the only reason this project is in front of the administration at all is because it crosses the Canadian border, which requires  State Department sign-off.  Which leads me to wonder if there is a hack.  Why not take the pipeline right up to the border from both sides and create a rail line across the border using a continuous loop of tank cars.  Its kludgy and inefficient, but probably less so than moving the oil long distance by rail.

I am reminded of this from a story long ago off Santa Barbara.  Exxon had gotten permission to drill in Federal waters, but local state/county folks wanted to find a way to stop the oil development.  Plans were (as is typical for any offshore oil) for a separation facility on shore that would separate oil, gas, and water from the mix that usually comes up out of the ground.    The state or local folks (can't remember which) refused to permit the separation facility, thinking that would kill the project.  But Exxon built what I believe was a unique separation facility on a boat and anchored the boat offshore.  No land permits necessary.

This is very similar, in my mind, to the pipeline decision.  California's attempt to block oil development altogether proved futile, just as Obama's decision will have little effect on long-term Canadian oil development.  But it did, in both cases, force a workaround (rail and the separator ship) that were almost certainly environmentally worse solutions than those that were halted.


  1. mlhouse:

    But Warren Buffett probably would not own the railway in your hypothetical scenario. So the liberals will block it.

  2. DirtyJobsGuy:

    I think the big picture is the ability to send crude to a range of Midwest and Gulf Coast Refineries via keystone. Cheaper and safer. If you needed to transship to rails you would just send it by rail (higher cost and risk). However, the Canadians could refine in Canada, the ship refined product in existing pipelines. The greens gambit is to hobble the tar sands production.

  3. Craig Loehle:

    How about an oil "lake" right at the border. Pipe up to the lake dumps it in, pipe across the border sucks it up. Of course, cover it.

  4. JLawson:

    Get a geodetic survey team in. Find the precise location of the border.

    Run the pipeline up to the border. Put a tank car STRADDLING the border line.

    On the Canadian side - empty the pipeline into the tank car.

    On the US side, have the tank car serve as a pickup for the receiving pipeline.

    Problem solved - except Buffet's gonna be unhappy.

  5. Craig Loehle:

    A direct analogy is the law preventing the export of oil.
    Imagine if the building of ports was banned because we don't "need" shoes from China....