Learn why this latest oil disaster could actually help give America’s next big pipeline project the green light…
The scenes were startling.
You can almost hear the environmentalists chanting in unison: “We told you so.”
A couple weeks ago, 12,000 barrels of Canadian crude and water spilled into a quiet neighborhood of rural Mayflower, Arkansas – a population of 2,300.
The Pegasus pipeline belonging to oil giant ExxonMobil ruptured, causing side streets and front yards to be flooded with huge quantities of black slick.
22 homes were evacuated as the cleanup efforts continue.
It’s been a total nightmare to say the least – and activists are quick to mark this as another flashpoint to their cause.
But if you look beyond the headlines, you’ll see that what happened at Mayflower could actually help make the Keystone XL pipeline a reality.
Let me explain…
While environmentalists believe that this latest oil spill will be the final curtain call for the controversial new pipeline, proponents of the plan believe such a disaster is just the wakeup call the POTUS needs to fast track it.
Not to take anything away from the hardship that the Mayflower folks are currently enduring… but Keystone supporters have a very valid point.
You see, the Pegasus was built in the 1940’s. That’s over 70 years ago.
Most structures with that type of life span – be it bridges or buildings – are either in the advanced stages of deterioration, or are in dire need of demolition due to growing safety concerns.
What’s more, we have seen significant technological improvements and safety standards over the years which would make replacing old structures all the more obvious.
The same can certainly be said of America’s aging pipeline network.
With 119,000 miles of pipe pumping 12 billion barrels of fuel across the US each year, it would be absurd to think that the system is immune to wear and tear.
But to be fair, this doesn’t imply that the oil industry should receive a “Get out of Jail” card either.
Mitigating oil spills should always be a top priority for energy companies.
However, denying the industry’s desire to replace an antiquated yet vital energy system is not only shortsighted…but potentially more environmentally threatening than installing no pipeline at all.
41% of US oil pipe was built in the 1950s and 1960s; another 15% was built before then.
The infamous Enbridge pipeline that spewed thousands of barrels of oil into the Kalamazoo River in 2010 is itself over half a century old.
One can only imagine how many more spills such as Mayflower and Kalamazoo are likely to happen in the years ahead as the pipes continue to get older.
Despite heavy investments by line operators to monitor, inspect and repair their aging pipes, these are merely band-aid solutions.
Without the installation of new infrastructure like Keystone, companies will continue to be challenged with ensuring the safety of their existing pipes at all times.
Meanwhile, the supposed “next best” means of transporting crude is by rail.
But even this method of moving oil is fraught with danger.
In fact, the Manhattan Institute, a conservative think tank, estimates that transporting oil by train is 34 times more likely to result in a spill compared to the same distance by pipeline.
Earlier in March, a train carrying 96 carloads of heavy crude from the Bakken derailed into the Penobscot River in eastern Maine.
Even the Bureau of Transportation Statistics agrees that not only does rail have a much higher likelihood of accidents, but it also has a higher greenhouse gas footprint.
Keystone: The Environmental Scapegoat
So if you were to ask environmentalists why they want to shoot down the Keystone XL… most would admit that it represents all the things that are wrong with living in a carbon economy.
The back story is certainly emotional enough: they need to stop the development of oil sands as well as prevent a foreign company (Transcanada Corp.) from slicing a 1,200 mile scar through America’s heartland to export Canadian oil to foreign nations.
But if you ask the growing number of scientists and academics who see the benefits of a new pipeline system, the war against climate change may in fact be backfiring.
That’s because denying the pipeline won’t stop oil from being extracted.
With global and domestic demand for oil as high as it’s ever been, the crude will reach the markets one way or another.
As one journalist describes it, trying to cut off oil supply in the face of strong demand will be about as effective as the war against drugs.
If activists truly want to end climate change, the answer lies on the demand side of the equation, not lashing out against Keystone.
Preventing Keystone will only force the oil industry to continue moving oil through old, dilapidated pipelines or via other dangerous options.
Surely the President must realize the consequences of that.
If Obama so wishes for a greener future… he should start by giving Keystone the green light.
It would be a more environmentally responsible decision than the alternative.
Yours in profits,
for Top Stock Millionaire