Streetwise Professor

About 19 months ago I wrote about RINsanity, i.e., the United States’ nutty ethanol (and other biofuel) program. RINsanity has long outlived the phenomenon (Lin-sanity) that inspired the neologism. A couple of weeks ago, the EPA announced the ethanol and biodiesel quotas . . . for 2014. Who said time travel is impossible? That Einstein. What an idiot!  (The EPA also announced quotas for 2015 and 2016.)

In a nutshell, despite protestations to the contrary, the EPA largely conceded to the reality of the E10 “blend wall” (the fact that the vast bulk of auto engines are incapable of burning fuel with more than 10 percent ethanol), and announced quotas that were (a) smaller than the market expected, and (b) smaller than the statutory amounts that Congress specified in its farseeing omniscience 10 years ago. At the same time, the EPA decreed larger quotas for biodiesel.

As a result, the market did the splits. The price of ethanol RIN credits that count towards the ethanol quota plunged, while the price of biodiesel RIN credits that count towards the biodiesel quota rose. Scott Irwin and Darrell Good have all the gory details here. (Those are the guys to follow on this issue, folks. I’m just kibitzing.)

As a result, pretty much everyone is upset. The nauseating biofuel lobby is screaming bloody murder because the ethanol quota is too small, and is threatening to go to court. Those holding ethanol credits are fuming due to the forty plus percent price decline.

This all points out the dysfunctional nature of environmental markets in which the supply is set by some opaque politicized bureaucratic process unhinged from economic reality. (The European CO2 credit market is another classic example.) The Congressional mandate set quotas (supplies) years in advance based on forecasts of future fuel demand that turned out to be wildly incorrect. So the EPA played Mr. Fixit, and through some unknown process, divined what Congress meant to do-really!-and announced some surprising numbers that caused prices to plummet.

The EPA’s reaction? It is shocked! Shocked! to find gambling going on at Rick’s (ethanol served here!):

The EPA didn’t intend for the program to create a speculative market, and an agency spokesperson declined to comment on RIN price movement.

“RINs are used to demonstrate compliance under the Renewable Fuel Standard program,” the EPA said. The agency manages an electronic system that tracks the RINs, but not their prices on the open market.

Earth to EPA! Earth to EPA! (And hey-aren’t you supposed to be earth’s stewards? So what are you doing orbiting Pluto?): if you create a scarce resource (ethanol credits) a market-and yes, one with speculation!-will appear. This is inevitable as the sun rising in the east. Another unintended but metaphysically certain event.

Indeed, the kind of speculation that these markets foster is particularly bizarre, because of the necessity of speculating on the feedback between the market and the EPA’s decisions on the amount of the scarce resource it creates. A big part of the RIN prices is market participants’ expectations about what the EPA will decide. If the EPA’s decision takes the market price into account, in some unknown (and almost certainly unarticulated) way, the reasoning chain becomes mind-numbingly complex very quickly. Mr. Market guesses what the EPA will do. That affects prices. The EPA takes the price, and guesses what this says about what the market knows about fundamentals . . . and what the market thinks about what the EPA is going to do. It adjusts its decision accordingly. Market participants have to make judgments about the feedback between the price and the EPA’s decision, which can affect the EPA’s decision, and on and on, ad infinitum. (This is analogous to Keynes’s beauty contest metaphor, and Soros’s theory of market “reflexivity.” Sign of the apocalypse alert: I gave Keynes and Soros a favorable mention in a single blog post.)

That’s no way to run a market, but the alternatives are  likely worse. One alternative would be to set quotas for years far into the future, and then not adjust them based on the evolution of other fundamentals that cannot be foreseen when the quotas are set.

It’s pretty clear that events like have just rocked the biofuel world are an inherent part of the system. Somewhat arbitrary, inherently difficult to predict (in part because they are politicized), and “reflexive” decisions are a major determinant of supply. These decisions are made at discrete times. It is extremely likely that there will be disconnections between the quantity the market thinks the EPA will select and what the EPA actually chooses. Given the inelasticity of demand for energy products, these supply surprises lead to big price impacts.

All of which goes to show that a better use of ethanol is imbibing it to cope with the craziness of a faux market.

Of course it’s not just that the market is crazy: it’s crazy that there is a market. Ethanol is an economic and environmental and humanitarian monstrosity. Yes, ethanol would play a role without subsidies or mandates. But a much smaller role. Forcing and inducing its use is costly, not environmentally beneficial, and raises the price of food, which hits the poorest the hardest. So this crazy market shouldn’t exist in the first place. I think I need another drink.

In one of my periodic Quixotic moments, I tilted at the Cult of Elon Musk. First, I argued that he or someone manipulated the prices of Tesla and Solar City stocks: I stand by that analysis. Second, I argued that the supposed visionary’s true genius was for feeding lustily at the taxpayer teat.

It is a testament to my great influence that the Cult of Musk has grown only larger in the two years since I made a run at him. But maybe the spell is breaking. For the LA Times just ran a long article detailing just how much his fortune was picked from our pockets. According to the LAT, Musk companies have raked in $4.9 billion in various subsidies and tax breaks, give or take.

That’s 10 figures, people.

That’s bad enough. What’s worse is Musk’s “defense.” It is a farrago of intellectual dishonesty, logical fallacies, condescension, and arrogance.

Musk only replied to the LAT after repeated inquiries, but it is good that the paper persisted. Musk’s rationalizations have to be seen to be believed.

For one thing, he says he doesn’t really need the subsidies:

“If I cared about subsidies, I would have entered the oil and gas industry,” said Musk.

. . . .

“Tesla could be profitable right now if we went into low-growth mode and we just served premium buyers,” he said. “The reason we are not profitable is because we are making massive investments to create an affordable long-range electric car.”

We are making massive investments? What do you mean by “we”, paleface?

So fine. You don’t care about subsidies. You don’t need them.

Then put your money-excuse me, our money-where your big fat mouth is and don’t cash the checks.

The rest of Musk’s defense consists of various incarnations of N wrongs make a right (or, put differently, other people suck at the government teat, why shouldn’t I?):

Musk said the subsidies for Tesla and SolarCity are “a pittance” compared with government support of the oil and gas industry.

“What is remarkable about my companies is that they have been successful despite having such a tiny incentive from the government relative to our competitors,” Musk told The Times.

. . . .

Tesla, Musk said, competes with a mature auto industry that has seen massive federal bailouts for General Motors and Chrysler.

“Tesla and Ford are the only American auto companies not to have gone bankrupt,” Musk said.

SolarCity, he said, is in a nascent industry that must fight entrenched oil and gas interests that have myriad subsidies.

Throwing good money after bad is not good public policy.

Musk cites numerous junk studies to support his case. Some of these are studies of the alleged economic benefits arising from investments in his battery plants, etc. I guarantee, all such studies are garbage based on mythical multipliers and crypto-Keynesian mumbo jumbo. Others are studies of the alleged subsidies of other industries, notably the energy industry. Even taking the numbers at face value, the subsidies of fossil fuels are a pittance on a per BTU or megawatt basis compared to those for renewables. Further, fossil fuels are also heavily taxed directly and indirectly, including by substantial geopolitical and expropriation risks. The study that cites the environmental costs of fossil fuels is particularly susceptible to abuse. And to quote Sonicharm, of the blog Rhymes With Cars and Girls-also not a Musk fan!-all large calculations are wrong.

Elon Musk is a rent seeker masquerading as a visionary. If he is one-tenth the innovator and genius his fawning fans believe him to be he wouldn’t need any subsidies. We should give him the chance to prove it.

Trolls are characters from Scandinavian folklore who inhabit desolate islands, so it only seems fitting that Rogozin the Ridiculous trolled Nato from a desolate Norwegian island. Rogozin, who is banned from traveling to Norway due to sanctions, showed up on Svalbard (formerly Spitsbergen), which is sovereign Norwegian territory (though Russians have residence and commercial rights there under the Svalbard Treaty). Rogozin obnoxiously (but I repeat myself) tweeted that “the Arctic is Russian Mecca.” The Norwegians are not amused. Nor should the US. But we seem unfazed.

Wouldn’t you know, the United States is assuming the chairmanship of the Arctic Council from Canada. In the face of Russia’s quite in-our-face assertion of control over the Arctic (of which the Ridiculous One’s “Russian Mecca” Tweet is just an example), and its dramatic increase in its military activities and presence in the Arctic, what is John Kerry’s priority for the Council? You guessed it: climate change. You know, for the polar bears.

Back to Rogozin, last seen here performing so marvelously in his role as commissar of the Vostochny Cosmodrome. His intervention into the management of the troubled project (including threats to “rip off the heads” of those holding up construction) has worked wonders. Well, mainly, it has resulted in a spread of strikes protesting lack of pay. And to save costs, the construction of infrastructure to support manned launches is being deferred, resulting in at least a two year delay in the use of the facility for such purposes. Well played, Bozo! The mind boggles at the thought of what you’ll accomplish in your icy Mecca.

Believe it or not, Rogozin has intense competition for the title of most insane Russian official today. His competition is Nikolai Rogozhkin, Putin’s representative in the Siberian Federal District. (Hey. Rogozin, Rogozhkin: pretty similar! Lame attempt at a pseudonym? Or is “Rogoz” a Russian prefix meaning “moron”?) Siberia is beset by wildfires already, and there are fears that this summer will make 2010 look like child’s play. So whom does Rogozin-sorry, I mean Rogozhkin-blame? Saboteurs, of course! Wreckers! Fifth Columnists! Oppositionists! As for his reasoning, check out the most outrageous flouting of Occam’s Razor I have ever seen:

Rogozhkin said he had flown in a helicopter and seen fire sites in “places where a normal person cannot go, even one who is well-prepared.”

“A specially trained person would be needed for this, and it would take at least 24 hours,” he said.

So rather than reason: “It is nearly impossible for a normal person to set these fires, so they must have a natural cause”, Rogozhkin the Almost as Ridiculous concludes that it isn’t a normal person after all. It is a specially trained person.

You literally cannot make up this stuff.

I haven’t written about “climate change” for quite a while, mainly because the debate has become as flat as the global temperature trend. But two recent articles have stirred me to respond, in part because they ignore (or should I say deny?) that inconvenient truth. And in that tale there is the suggestion that the climate change paradigm is entering a crisis stage.

The most egregious is a study that purports to link the horrific Syrian civil war to climate change. Specifically it alleges that CO2->higher temperature->drought in Syria->civil war. This work is unscientific and manipulative, to the point of being mendacious, because every link in that causal chain is in dispute.

Even if one stipulates the first link, the second link is tenuous in the extreme. Like temperatures pretty much everywhere, temperatures in Syria experienced a jump around 1998, and have exhibited no real trend since. Climate models do predict that anthropogenic global warming should lead to drying in the eastern Mediterranean, but the mechanisms associated with this, namely a rise in air pressure and a change in sea surface temperature patterns, are not observed in the data. Yes, there has been an anomalous drop in precipitation in Syria, but this drop is substantially greater than CO2-driven climate models predict. Thus, the models upon which the CO2-drought causal link is based do not explain the observed data. Finally, as the study itself acknowledges, the water crisis in Syria has also been driven by bad water use policy as much or more as it has been by the decline in precipitation.

Then we get to the last link. Attributing any complex social phenomenon like a civil war to a single factor like a change in climate is a dubious exercise. Dubious in the extreme. Moreover, taken seriously, this hypothesis would predict that civil unrest/revolution in the Middle East would be associated with drought, and hence other countries in the region experiencing drought would be susceptible to revolution, and those not experiencing drought conditions would be less susceptible.

This prediction fails on both counts. Note that the Syrian revolution was a part of the “Arab Spring,” which resulted in a near simultaneous outbreak of civil strife in Libya, Egypt, Yemen, and Bahrain, as well as Syria. None of the first four countries experienced drought in the years leading up to 2011. Further, one country that did experience a decline in precipitation similar to that in Syria-Jordan-did not experience unrest. In other words, the theory has false positives and false negatives. Indeed, Syria is the only data point that matches. Cherry pick much?

Further, there are numerous other factors unique to Syria that help explain the outbreak of unrest and the subsequent horrific civil war. These include most notably the existence of a long-ruling dictatorship of a religious minority regime locked in a decades-long death struggle with the Muslim Brotherhood, and the dramatic growth in Islamism in the region generally. Perhaps the socioeconomic dislocations resulting from the drought exacerbated the potential for conflict, but to promote that to the center of the narrative is dubious at best.

No, this seems another example of cynical opportunism, whereby the climate change establishment hijacks human misery to advance its cause. The recipe is familiar. Find some tragic event, and then construct some story-usually quite tenuous-linking that tragedy to AGW in order to push the agenda. This is not science. This is propaganda.

The other example is a study that uses an ensemble of climate models to make the frightening prediction that the rate of global temperature increase is almost certain to accelerate in the coming decade.  The Guardian article states that this is based on “data from more than two dozen climate models.” Well, that’s exactly the problem. Models don’t produce data. They produce predictions, and the predictions of these models fail to match the real data in crucial ways. Most importantly, the lack of warming in the last 17 years is a black swan event that the models have uniformly failed to predict. But unabashed by the failure of their models to reproduce the recent past, and in particular to the failure of the real world data to live up to the models’ apocalyptic predictions over that period, the modelers confidently predict the near future: “Pay no attention to the last decade. Just wait! Apocalypse is around the corner!” This is Heaven’s Gate, not science.

The increasingly frantic efforts of the AGW alarmists is most likely a symptom of the failure of previous predictions to come true, combined with the failure of the previous alarmism to generate popular support for costly policies to mitigate CO2 emissions. It is a doubling down on belief, rather than a sober application of the scientific method. It is right out of Kuhn-the crisis stage of a paradigm. And that’s what AGW is: a paradigm, not “settled science” (which is an oxymoron).

Sadly, in an age where science has become politicized, this is accompanied by political witch hunts, such as the one waged by a watermelon Arizona congressman, that has led at least one scientist (Roger Pielke, Jr.) to “shift . . . academic work away from climate issues.”

Ironically, no doubt many of those who cheer such efforts also think Galileo was a hero. Square that circle for me.

A few weeks ago I ridiculed one of the arguments raised against Keystone XL: Namely, that oil transported on the pipeline will be exported. I pointed out that this is idiocy. The very purpose of the pipeline is to transport it to the very complex refineries at the Gulf of Mexico. These refineries are clearly able to outbid anyone for oil sands crude transported on Keystone XL, and they will. Moreover, export through the Gulf to Asia, is far more costly than export to Asia via Canada’s west coast.

The main targets of my ridicule in that post were various Internet and Twitter economic geniuses. Hardly an august group. But their voices have been heard! For now the Democrats in Congress are making this argument the centerpiece of their opposition to pro-Keystone legislation:

As Republicans revive the Keystone debate in Congress, opponents are trying to shift the focus to where the Canadian pipeline’s oil will end up once it reaches Texas: China or U.S. gas tanks?

Massachusetts Democrat Edward Markey stood on the floor of the Senate this week next to a giant sign reading “Keystone Export Pipeline” as he argued against a bill to approve the project.

Ed Markey. I should have known.

You can just see TransCanada CEO Russ Girling’s frustration at having to deal with such economic inanity:

Russ Girling, head of pipeline builder TransCanada Corp. (TRP) issued a lengthy statement saying it doesn’t make any sense to export the oil once it reaches the U.S. coast of the Gulf of Mexico, home to the world’s biggest concentration of refineries.

But TransCanada has concluded that this argument, inane as it is, is politically effective:

Girling said the company’s internal polling shows the export issue raises the most concern for Americans. In an interview last month with Bloomberg News, Girling acknowledged that critics found a “nerve that resonates” in that argument.

So much for the influence of economic reasoning on political debate.

I mentioned the Twidiots earlier. There’s something interesting here, and clearly illustrates a pattern. Specifically, that there are no coincidences, comrade. Especially in social media. Or to put it differently, there are too many coincidences for them to be coincidences.

The Twitter storm of the Keystone export meme coincided closely in time with Obama making the same point, and led into the Democratic leadership making this argument the center of their anti-Keystone campaign. In combination with other such “coincidences” strongly suggests manipulation of social media to support political strategies, and in particular administration political strategies. The Twitter storm that broke out in support of the (equally inane) administration free community college initiative over the last few days is another example.

Meaning that pushing back on Twitter stupidity may not be a waste of time. For such stupidity is often merely the handmaiden of some asinine political agenda.

Hard on the heels of Putin’s press conference, Obama held one of his own. Blessedly, it was shorter. That’s the only good thing I can say about it.

At least Putin’s pressers offer some entertainment, some of it intentional, some of it accidental. Obama’s appearances are as entertaining as a root canal performed to the accompaniment of fingernails on a blackboard.

I will limit myself to comments on two issues.

First, yet again Obama slagged on Keystone XL. And yet again, he delivered a disingenuous, economically ignorant attack on the pipeline:

“There is very little impact – nominal impact – on U.S. gas prices, what the average American consumer cares about,” Obama told reporters during an end-of-year press conference.

. . . .

“It’s good for the Canadian oil industry, but its not going to be a huge benefit to us consumers,” he said.

Obama stressed that the issue at hand for Keystone is “not American oil, it is Canadian oil.”

“That oil currently is being shipped out through rail or trucks and it would save Canadian oil companies, and the Canadian oil industry enormous amounts of money if they could simply pipe it all the way down to the Gulf,” Obama said during his final press conference of 2014.

“It’s very good for Canadian oil companies, and it’s good for the Canadian oil industry but it’s not going to be a huge benefit to U.S. consumers, it’s not even going to be a nominal benefit to U.S. consumers,” Obama said.

Where to begin?

1. What the hell did the Canadians ever do to him? Does he hate them because they are members of the British Commonwealth? (And we know he loathes Britain.) It is truly astounding to see a president who is so solicitous of many thuggish regimes be so dismissive of a longtime friend and ally. Speaking about Keystone, Obama turns into an American Firster nativist, rather than his usual pose as Citoyen du Monde.
2. Last time I checked, the oil would be refined-and value added to it-in American refineries.  That would benefit American oil companies, American workers, and the owners and employees of companies that supply the refineries. The money savings would be split between American and Canadian companies. But maybe because the refineries are located in Texas and Louisiana, which have repudiated Obama massively, that’s a bug not a feature. Or maybe Obama doesn’t understand that oil doesn’t magically transform itself into gasoline, diesel, etc.
3. Or maybe Obama persists in the delusion that the oil will be exported, disregarding basic economics, common sense, and the analysis of his own State Department.
4. There would be no impact on gas prices only if the supply of Canadian crude is completely inelastic: in this case, the quantity of oil produced and refined would be the same, regardless of how costly it is to transport it to market. If supply is somewhat elastic, lowering transportation costs increases output, which lowers product prices; moreover, holding output fixed, reducing transportation costs reduces the final product price. And perhaps most importantly, the alleged justification for stopping Keystone is the environmental damage Canadian heavy crude inflicts. But if supply is perfectly inelastic, there is no environmental benefit of raising transportation cost, because this will not affect the amount of oil produced, and hence will not affect the amount of CO2 it produces. (Not to mention that pipelines are a safer, more environmentally sound way of transporting this oil.) So if Obama is right about gas prices he is wrong about environmental benefits, and vice versa.

Unbelievable.

Come to think of it, I think that Obama’s real reason for opposing Keystone XL is that the Venezuelans would be the biggest losers. I am pretty sure he has much more of an affinity with Chavistas than Canucks.

Which brings me to the other issue: Cuba.

I am ambivalent about the embargo, or the lack of diplomatic recognition. I can argue either side. But there are many things about this initiative that make me uneasy.

For one thing, Cuba is in dire straits. This is where Venezuela comes in. The Bolivarian paradise has been carrying the Castros’ shambolic regime for years, but is now itself on the verge of economic collapse. Default is imminent, and at the current level of oil prices economic collapse is a real possibility. Venezuela is already cutting back support to the Cuban regime, and will cut it back further. Given that, the Castros are desperate, and Obama could have extracted a much better deal. A deal that would have given some benefit to the Cuban people, rather than bailing out the regime and allowing to continue its repression and depredations.

Obama’s rhetoric was also offensive, and at times historically ignorant. He characterized the embargo as a “failed policy.” Pretty rich for a serial failure to insult 9 previous presidents and 26 Congresses. He could have made an affirmative case for a new policy, and recognized the reasons for the previous policy, without such condescension.

Moreover, he made mention of the need to move beyond “the legacy of colonialism and communism.” Communism isn’t a legacy in Cuba: it is a daily reality. Insofar as colonialism is concerned, is Obama referring to Spain? Because he sure as hell can’t be referring to the US: Cuba was never an American colony. The Teller Amendment to the declaration of war against Spain in 1898 forbade the US from annexing Cuba. It was under US administration for four years, but achieved full independence in 1902. (Obama made the colonialism/communism remark in a discussion of Latin America generally, but this doesn’t really save him. Cuba is the only longstanding Communist country in Latin America; colonialism ended in Latin America in the 1820s; the US-via the Monroe Doctrine-kept out colonial powers in the 19th century; and colonialism is the least of Latin America’s problems, which tend to be very much home grown. In mentioning colonialism, Obama was just regurgitating a standard prog trope.)

Obama also engaged in his self-indulgent habit of making history all about him. He noted that Fidel Castro assumed power two years before Obama’s birth, and the Bay of Pigs invasion occurred soon before he was born. (Interesting that he uses the “I” word to refer to Bay of Pigs, but not Ukraine.) Who cares? What does this have to do with anything?  Does he have to bring himself into everything?

I’ve therefore decided that I will hereafter designate all dates by BO and AO: Before Obama and After Obama. Castro assumed power in 2BO. Bay of Pigs occurred in Year Zero. Obama elected in 47 AO.

The means by which Obama pursued this policy was also typically high handed, and failed to include or consult with anyone in Congress. And no, I don’t include corrupt tax scofflaw Charlie Rangel, who was photographed lounging like a beached whale in the Cuban sun after helping in the negotiations.

The means and the outcome of the Cuban opening also make me uneasy about deals with Iran.

I could go on, but I’ll close with one point. People have compared this to Nixon’s opening of China. Superficially, this is plausible. But there is a major difference.

Nixon could go to China because his stalwart anti-Communist credentials (which had won him the intense enmity of the left) made it credible that Nixon was acting in the interests of the US, rather than indulging his ideological preferences: if a McGovern or a Henry Wallace had attempted the same there would have been justifiable suspicions of their motives and the benefits to the US. In contrast, Che is worshipped has a hero rather than condemned as a psychopathic murderer in Obama’s political circles. His administration has taken a very benign approach to leftist Latin American regimes, including Venezuela and Nicaragua. This raises doubts about what his Cuba initiative will entail, and whether it will advance American interests or benefit the long-suffering and repressed Cuban people.

So to summarize Obama’s last press conference: he slammed a long-time ally and sucked up to a long-time enemy. Which pretty much summarizes his foreign policy, generally.

When he said that oil shipped from Canada to the Gulf Coast would be “sent everywhere”, Obama was regurgitating a mantra of the enviro left and mainstream media outlets (but I repeat myself). Remarkably, his own government disagrees.

The State Department’s very detailed analysis of KXL addressed this specific issue in the market analysis chapter of the Environment Impact Statement. The relevant section, on  page 1.4-140 specifically notes that it had received comments throughout the review process claiming that KXL-shipped oil would be exported, and that it felt obliged to respond to these claims. It did so, and delivered a smackdown:

However, such an option appears unlikely to be economically justified for any significant durable trade given transport costs and market conditions.

. . . .

In short, while it is possible that some cargos of heavy WSCB crude could be exported, it is unlikely for a range of economic factors that any such trade flows would be significant or durable in the long run

The supporting analysis basically repeats and supports the arguments I made in my Keystone posts. This analysis is based on an exhaustive review of available data and a firm grasp of refining and transportation economics. Unlike Obama’s, in other words. The analysis states that two alternative models, including one from the EIA (another part of the government) predict no appreciable exports of Canadian heavy crude piped to the US via Keystone, and that this conclusion is robust to various assumptions about available transportation options.

To summarize, President Science!© did not perform, or rely on, any systematic economic analysis when he delivered his verdict on the economics of KXL. He just parroted claims from NRDC, Earth First! and the like that had been thoroughly debunked by a careful analysis of US government economists.

Why does anyone pay the slightest attention to anything he says? He speaks authoritatively about things of which he knows nothing. He is not just ignorant, he is willfully ignorant. His own government did the work that definitely demonstrates the falsity of his arrogantly-delivered claims. Yet he and his acolytes presume to lecture the hoi polloi about Science!©

As an aside, a bill to authorize KXL went down in the Senate yesterday, delivering a likely final blow to the dead parrot candidacy of Louisiana’s Mary Landrieu. Her soon to be erstwhile colleagues preferred to kick her to the curb, rather than force Obama to veto KXL. Now, anyways, because the Republicans will almost surely pass the bill in January, after Mary has moved back to Louisiana, that is if she can bear to leave her DC mansion.

The best part of the day was that a group of Rosebud Sioux (you read about them here first!) interrupted the session with protest chants while Elizabeth Warren was presiding. Senator Warren was not amused. Perhaps if they’d chanted in Cherokee she would have been more sympathetic.

Tweeting my post about Obama’s Keystone mendacity unleashed a vortex of leftist idiocy that was stunning even by Twitter standards. Between a visceral and unthinking hatred of Keystone, and the need to rally to the defense of their cult leader (who also has a visceral and unthinking hatred of Keystone), the lunatics felt compelled to swarm from the hive.

One idée fixe was that Obama was right, and the oil is just going to travel down Keystone (spilling huge quantities all the way!), be put on tankers, and sail on its merry way to furriners abroad, especially the Chinese. The fact that the terminus to KXL is located at the heart of the largest concentration of refineries in the US, and refineries tailored to refine heavy crude to boot, could not shake them from their conviction. Apparently refiners in Texas are just going to stand by the Houston Ship Channel and wave as tanker after tanker of oil that they could be refining passes them by on its way to distant markets with much less efficient refineries. It’s rather amusing that some people believe (I won’t say think) that 830kbd is somehow supposed to sneak past the world’s largest concentration of sophisticated refineries tailor-made to process it, and end up in China.

Nor could they be budged by the fact that large quantities of Canadian crude, including oil sands, are already being shipped (via rail, barge, and rail then pipeline) to PADD 3 refineries and refined here. (Canadian oil sands already represent the largest single source of crude imported to, and refined in, the US.) Nor could geography sway them: if you want to ship oil from northwestern Canada to China, going via the Gulf would be a pretty stupid way to do it. Far better to pipe it to Canada’s Pacific coast: indeed, Canada has suggested that’s what it will do if KXL is blocked, which indicates that even that is the 2d best alternative, the best being to refine it in the US. If heavy oil is to go to China, it’s cheaper to substitute Canadian oil for Venezuelan, and have the Bolivarians ship it to the Maoists. (One Einstein said that the expansion of the Panama Canal proves that the oil is destined for China. Er, no. Even after expansion, the Canal can handle only  ships with about 1/2 to 1/3 of the capacity of a VLCC that is the most efficient way to ship crude long distances.)

A few grudgingly conceded that it would be refined in the US, but that wouldn’t benefit Americans, because then the refined products would be snapped up by the voracious Chinese. That there is EIA data showing that 80 percent of US refinery output is consumed domestically, and that less than 4 percent of US refinery exports (and hence less than 1 percent of refinery output) goes to China (and most of that from PADD 5 on the West Coast) made not a dent. And irony is apparently lost on some people: Canada is the 2d largest importer of US refined products. Meaning that a gallon of Keystone crude is far more likely to wind up in a Canuck gas tank than a Chinese one.

One genius Tweeted a Guardian article saying that most of Keystone oil would be exported. Obama is right! QED! Except that the article clearly meant that it would be exported from Canada. Or would that be Cana-duh?

Nor did the fact that transport of oil by rail  is much more dangerous, and poses far greater environmental hazards have the slightest impact on those who are allegedly so sensitive to the fraught state of the planet.

Then it got really nuts. It became all about the Indians. Apparently the ogichidaag* of the Rosebud Lakota Sioux tribe have stated that the House’s approval of Keystone was an act of war:

“The House has now signed our death warrants and the death warrants of our children and grandchildren. The Rosebud Sioux Tribe will not allow this pipeline through our lands,” said President Scott of the Rosebud Sioux Tribe. “We are outraged at the lack of intergovernmental cooperation. We are a sovereign nation and we are not being treated as such. We will close our reservation borders to Keystone XL. Authorizing Keystone XL is an act of war against our people.”

In February of this year, the Rosebud Sioux Tribe and other members of the Great Sioux Nation adopted Tribal resolutions opposing the Keystone XL project.

“The Lakota people have always been stewards of this land,” added President Scott. “We feel it is imperative that we provide safe and responsible alternative energy resources not only to Tribal members but to non-Tribal members as well. We need to stop focusing and investing in risky fossil fuel projects like TransCanada’s Keystone XL pipeline. We need to start remembering that the earth is our mother and stop polluting her and start taking steps to preserve the land, water, and our grandchildren’s future.”

Yes. The Indians hate oil as a despoiler of land. They are all about sustainability and alternative energy. They would never have anything to do with the stuff. Never mind the 30mm bbl of oil produced on reservations, an amount that has spiked up in recent years, primarily because of the fact that the Three Affiliated Tribes on the Fort Berthold Reservation have been major beneficiaries of the Bakken boom.

Keystone’s alleged oppression of Indians brought forth a torrent of race-based idiocy, culminating in this gem.

And I thought Custer died for my sins.

It is also bizarre that Keystone turns prog Citizens of the World into ranting America Firster nationalists. Keystone just helps the Canadians! The Chinese! Apparently, the Chinese get the oil, the Canadians get the money, and ‘Mericans get the pollution. When @libertylynx pointed out that some good ol’ made in the USA Bakken oil would be shipped on Keystone (a true fact, as there will be a Bakken MarketLink on-ramp that will pump US oil into KXL), someone responded, YOU LIE!!! (yes, complete with caps and exclamation marks). Some people just can’t handle the truth.

And yes, of course I was accused of being a Fox News watching (not), Tea Party (not), Koch Brothers shill (not). And a racist by implication.

I was almost tempted to see if I could make things truly nuts by figuring out some way to bring gold bugs into the conversation. I decided against it, figuring that it would risk creating a singularity of stupidity that could destroy the universe. (I will tempt fate, probably tomorrow, by writing a post on recent Russian gold purchases, which will  bring out the gold bugs and the Russian trolls.)

I have very low expectations on the level of debate on Twitter. Subterranean expectations, in fact. But even given that, I was stunned at the level of insanity, stupidity, ignorance, and venom that the topic of Keystone unleashed. I guess it represents a convergence of prog bugbears (oil, capitalism, “climate change”, criticism of Obama), compounded by the trauma of a rout at the polls.

This may seem like a small thing, but I regretfully conclude that it is a harbinger of something bigger. Obama will spend the next two years dog whistling and throwing red meat to his rabid progressive pack as a part of his post-election, lame duck (or would that be lame loon?) guerrilla campaign. Since he can no longer play Moses, he will become Sampson. Keystone is just one of the columns that he will use to pull down the temple around our ears.

It is going to be ugly, ugly, ugly. And Elizabeth Warren is waiting in the wings.

*This is weird, since this is apparently an Ojibwe (Chippewa for you old timers) word for warrior, and not a Lakota word. The Ojibwe are/were a helluva long way from the Great Plains generally, and Nebraska or the Dakotas specifically. Indeed, it gets better! The Ojibwe and the Lakotas were inveterate enemies. (I am always amused at the romanticization of Indians by prog peaceniks: just who the hell were those warriors and braves fighting before the arrival of Europeans? Other tribes, of course.) The Ojibwe got firearms before the Lakota, and drove the Sioux into the Dakotas.

The Gruber Gone Wild video collection (with a release a day!) demonstrates graphically that Obamacare is a 900+ ply tissue of lies. And Obama himself was the lead retailer of those lies.

Today gives another example of Obama’s mendacity. He came out against Keystone, again, but this time on the grounds that it just helps Canada, and doesn’t benefit the US one whit:

“Understand what this project is: It is providing the ability of Canada to pump their oil, send it through our land, down to the Gulf, where it will be sold everywhere else. It doesn’t have an impact on U.S. gas prices,” Mr. Obama said, evidently frustrated with questions about the Canadian-backed project while he was standing alongside Myanmarese opposition leader Aung San Suu Kyi.

(Using a human rights champion-whom he is going to toss aside-as a prop is a great touch.)

Like a good leftist, Obama apparently aspires to become Lillian Hellman, for every word in that statement is a lie, including “and” and “the”.

Where would Canadian heavy crude pumped through Keystone go? The US Gulf.

Now think hard, people. What is located on the Gulf Coast? Think, think, think.

Got it yet? Of course you do: Refineries! You know, those things that turn crude gunk into stuff we can actually use. I know that even idiot leftists know that there are refineries in Texas, because each of the 4 times a Bush ran for president, they told us ad nauseum about the pollution in Houston/Texas from the eeeeeevvvvillll refineries.

US refineries are optimized to handle heavy crude like that produced from oil sands in Canada. At present, we get most of that from Venezuela and Mexico. Canadian crude would displace most, and perhaps all, of that. (Maybe that’s what frosts Obama: boring, pasty white, Anglo Saxon Canadians benefit, and Bolivarians/Chavistas lose out!) Meaning that US refineries would benefit from cheaper crude which would, inevitably, reduce gasoline prices in the US. (It will also alleviate some of the excess supply of condensate and  light crudes produced in the US-particularly the Bakken-as these can be used as diluents. And I know Obama has totally mastered all of the intricacies of pipeline transportation.)

Indeed, Gulf refineries are already processing Canadian heavy crude. More than 100kbd is reaching the Gulf, via rail or barge, and via rail to Cushing and then pipeline to the Gulf. Keystone would just make those flows cheaper-and safer.

So the “it goes everywhere else” line is a total crock. It comes here, is refined, and fuels our cars, and airliners and homes, and is sold overseas so that we can buy other things foreigners produce that we like to consume.

The only question is: What is worse? That Obama actually believes this crock, or he doesn’t but is willing to say anything to defend an indefensible position?

Obama poses as a great environmentalist. Pray tell, how does relying on riskier forms of transport (tankers from Venezuela and Mexico, barges down the US inland waterways, and rail) rather than pipelines help the environment?

And I am sure it is a total coincidence that Obama booster Warren Buffett, he of the BNSF and Union Tank Car Company, is  a major beneficiary of the  stonewalling of Keystone.

The mendacity is not all that’s appalling about this statement. One of Obama’s worst habits has been giving allies the back of his hand, while he sucks up to sworn enemies. Canada is a close ally, and has been for decades. Indeed, even now Canada is actually contributing military force to Obama’s otherwise farcical anti-ISIS coalition.

Fat lot of good that it does them. Who needs friends like Canada when you have Iran? Can Canada help Obama build a legacy? No! So what good are they? (Please ignore the fact that the legacy will really be a nuclear arms race in the other Gulf: the Arab/Persian one.)

The sad thing is that we are in for two years of this mendacity. It will be all Alinsky, all the time. Non-stop demagoguery in the service of progressive causes. He lost, but we’ll pay.

So we will have to update Twain. No longer should you say “lies, damn lies, and statistics.” The version that will describe the next two years is: “lies, damn lies, and Obamaisms.”

I avoid the immigration issue like the plague-or Ebola, to update the meme-because (a) I can’t say that I can bring any special knowledge to the subject, and (b) it’s one that inevitably generates more fury than thought, reaction rather than reflection. I make an exception now because of an article that speaks to the Science! debate.

Neil Munro in the Daily Caller has a long article that claims that the currently ongoing EV-D68 enterovirus epidemic was created by, or at least exacerbated by, the influx of children from Mexico and Central America this summer. The evidence is not definitive, but Munro presents enough to show at least that it’s a reasonable hypothesis. And what is science about? Testing hypotheses. And what should scientists do? Test hypotheses.

But if you read Munro’s piece, you will find a shocking lack of interest among scientists to test this particular hypothesis. Indeed, the scientists interviewed recoil in fear at the very thought. What’s more, he shows pretty convincingly that this unscientific lack of curiosity is due to the fact that this subject is politically radioactive, and if the hypothesis were not rejected, it would be very, very politically damaging to Señor Obama. So scientists, who exist in a state of abject dependency on Federal funding, would probably rather inject EV-D68 into their eyeballs with a square needle than investigate seriously such a politically explosive hypothesis.

The correlation between Science! and politics demonstrates that the invocation of Science! by politicians and the politically active is inherently untrustworthy. And of course, this is not limited to Ebola and EV-D68. Global warming or climate change or whatever the label de jour is a particularly prominent example.

I find it sickly ironic that the administration and its defenders invoke Science! as a magic incantation to ward off rational debate. The translation of Science!, when used by an administration hack or flack is “Shut up, you bloody peasant! Defer to your betters, regardless of how asinine they are. Do not question the Great and Powerful Oz.” It has come to the point that an invocation of Science! immediately discredits the sincerity of the invoker. It is especially ironic when the bearer of this message is a liberal arts or J-school grad (or both!) who probably exerted considerable effort to avoid taking a serious science class during their entire education.

Another institution corroded by the acid of politics, especially in recent years.  (Another is civilian-military relations: I will address that dreary story in a future post.)