Diamond Fairy Tales

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It would be so nice if something made sense for a change. Lewis Carroll, Alice in Wonderland

The Diamond petition is based on fairy tales. “Without pipelines like Diamond, many American refineries would rely upon foreign sources of oil. Safe and reliable access to domestically produced crude oil is a critical component of our country’s Energy Security. I support fueling American Energy Independence with the Diamond Pipeline.”

Here is my petition: Please stop the first drop of oil in the Diamond Pipeline. Let’s end the Fossil Fuel Era, wars, and violence. Embrace and enjoy emission-free wind and solar energy, and create safe, healthy, and resilient communities. I support care for Mother Earth, clean air, clean water, public health, and environmental justice.

The devastations in Houston, Florida, and Puerto Rico can’t be dismissed. This is a unique moment, a time to act. With hope, courage, and strength we must prepare for the challenges ahead.

Domestic oil is not for American refineries

In 2017, U.S. oil production was 9.5 million barrels per day (b/d). Most of the U.S. production, 9 million b/d, was exported to China. So much for Diamond’s false claim of Energy Security and Independence.

Today, we import 40 percent of the oil we use, 11 million b/d, mostly from Canada, followed by Saudi Arabia, Venezuela, Mexico and Colombia.

There are many grades of oil, some refineries like light crude, others prefer heavy oil. Crude oil is traded at commodity exchange for delivery in the future or on the spot. London and New York trading centers, where trading takes place, and delivery locations determine oil prices and flows. The tale of the crude oil flow, shows Diamond would benefit PAA and Valero.

Domestic oil is highly subsidized

The 1916 tax break allows oil companies to write-off dry holes and all intangible drilling costs in their first year of exploration. The 1926 Congress approved the oil depletion allowance, which lets producers deduct 27.5 percent of their gross revenues. “We were not only hogs but the odd figure made it appear as though it was scientifically arrived at,” said U.S. Senator Tom Connally. It is nice to find an honest senator. The 27.5 percent was compelling, and is still alive today! Lenient environmental regulations, tax-free distributions, and many other subsidies must end. Diamond will not pay for leaks or spills, and is not required to carry liability insurance to cover public health claims.

Fossil fuel profits paid by American taxpayers

U.S crude is subsidized by American taxpayers surrendering irreplaceable land and offshore locations. Fracking, storing crude in tank farms, constructing pipelines, and building export ports on the Gulf, will destroy our society, economy and environment.

Commodity trading controls where the oil goes

Cushing, Okla., is the delivery point for West Texas Intermediate (WTI), the light sweet crude oil used as a benchmark for the price of domestic oil. Trading is done with “electronic barrels.” The New York Mercantile Exchange is the WTI commodity futures exchange center. For the last 10 years, the price of WTI has fluctuated between $40 and $140 per barrel. On Monday, the price of WTI was $56 per barrel. Another important benchmark for overseas oil, Brent crude, is traded in London at a higher price. The price gap between Brent and WTI is driving U.S. exports and construction of shipping ports, only to benefit U.S. fossil fuels. Crude stored in oil tankers in tankers off the coasts of Asia with trading companies controlling the flow explains the wasteful overproduction of U.S. domestic crude oil and the nefarious consequences.

A plea for reason

The Diamond project is an example of national abuse of power. Taking down environmental regulations, promoting coal mining, attempting to stop the production and use of electric vehicles, distributed wind, and solar power generation, will increase greenhouse gas emissions. The October 24, 2017, General Accounting Office, Climate Report, found the billions of dollars in damages will likely rise in the future. The Fossil Fuel Era must end.

The Diamond project, 100-years of dirty energy, does not make sense.

Dr. Luis Contreras

 

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