Crony Capitalism Deluxe: Buffett To Profit Greatly From Keystone XL Demise

Investors’ Business Daily had this latest outrageous report on the angles being played behind the scenes as the Obama administration sells the American economy down the river…

Killing the Keystone XL pipeline may help one of the world’s richest men get richer. North Dakota’s booming oil fields will now grow more dependent on a railroad the president’s economic guru just bought.

After noting the killing George Soros made on his Petrobras investment thanks to the Import-Export Bank’s $2 billion loan for deepwater offshore drilling capital after his decision to become the largest private shareholder in that Brazilian company in 2009, an investment that became even more valuable after Obama’s offshore moratorium in the Gulf last year lowered the day rate for offshore drilling rigs after some 10 of them left the United States for the world market, IBD gives us more details…

Apparently, oil tankers coming from Brazil are better and safer than a pipeline from Canada, whose best customer we will not be if they ship their tar sands oil to China instead.

Interestingly, another billionaire, Obama economic inspiration Warren Buffett, stands to benefit from the Keystone XL pipeline delay.

As oil production ramps up in the Bakken fields of North Dakota, plans to use the pipeline to transport it have been dashed.

As a result, North Dakota’s booming oil producers will have to rely even more on the Burlington Northern Santa Fe (BNSF) railroad, which Buffett just bought, to ship it to refineries.

Buffett’s Berkshire Hathaway has agreed to buy Burlington Northern Santa Fe in a deal valuing the railroad at $34 billion. Berkshire Hathaway already owns about 22% of Burlington Northern, and will pay $100 a share in cash and stock for the rest of the company.

In December, 65,000 of the 343,000 daily barrels of oil coming out of the Bakken field in North Dakota went by rail, and BNSF says they can ship up to 730,000 barrels a day – which is pretty much what Bakken is expected to produce over the next seven years as the field fully comes on line – if the facilities are built to load it.

And with no Keystone XL pipeline to handle the Bakken crude, the rails will be the only real shipping option. They’re already the only real shipping option for materials going into the Bakken field to build oilfield facilities; each new well drilled in Bakken requires a couple of rail cars’ worth of equipment and so forth, and it’s BNSF’s tracks being used.

Meanwhile, the estimated 20,000 direct jobs and 250,000 ancillary jobs to be created as a result of Keystone XL will be stillborn by the president’s decision to effectively kill the project through inaction.

If you think Obama actually cares about the environment – or that his soft spot for the flowers and the trees is what drives his policies – then you’re not paying attention.

This is corruption. Pure corruption. It’s Chicago graft writ large. And there ought to be hell to pay.

Interested in more national news? We've got you covered! See More National News
Previous Article
Next Article
Join the Conversation - Download the Speakeasy App.

Trending on The Hayride