Predicts energy prices will stop terminal


Good news - the Keystone XL pipeline is dead in the water. How can I make such a bold prediction? Consider why it needed to be built. Crude oil that goes to midwestern refineries is priced at the West Texas Intermediate benchmark. Crude that goes to Houston is priced at the worldwide Brent benchmark. Since last November's elections, the spread between those prices has shrunk from $23 dollars higher for Brent to only 2 cents higher. With virtually no differential between the two benchmarks, Canadian producers don't need to send their oil to Houston. This will enable President Obama to quash the Keystone XL pipeline and earn points from mainstream liberals. By the way, the increase is due wholly to West Texas Intermediate price increases (27 percent since November) as the Brent price hovered around $108 a barrel in November, same as now.

For a similar reason, the Gateway Pacific Terminal coal terminal is likely kaput. China no longer needs exponential economic growth and are happy to buy cheap Australian coal until they get the infrastructure built to maximize their own coal reserves. Without massive U.S. subsidies for the Gateway Pacific Terminal, U.S. coal cannot compete. However, it is unlikely new coal subsidies will pass the GOP-controlled house. Ergo, no subsidies - no Gateway Pacific Terminal.

Walter Haugen


Bellingham Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service