“GOP oil titan: Keystone’s irrelevant” – Politico, 14 November 2014

Though the Keystone XL pipeline has been a hot-button issue with environmentalists, it seems that it has become an irrelevant discussion. The pipeline was introduced in 2005, and still no decision has been made about its construction. In October, the House approved a bill that would authorize the pipeline; however, a few days later, the bill failed to pass through the Senate. If it had passed, the bill would have gone directly to President Obama, though it’s likely he would have vetoed it.

But all that might change when the new Republican-majority Congress reconvenes in January. In fact, it has become the mission of Republican Senator Mitch McConnell (KY) to have the bill pass. It’s probable that the bill will pass both Congress legislatures, but the bill will need 67 votes in favor in order to quash a presidential veto.

Regardless of the pipeline’s importance, proponents firmly contend that the $8 billion pipeline will allow for a flood of new jobs and bolster North American energy independence; but opponents believe that it will increase fossil fuels and further incite the effects of climate change.

It seems like the oil industry has moved on from Keystone; oil companies are employing other pipelines to carry their oil. Furthermore, the US now has an abundance of oil, which has reduced prices. Bringing more oil in from Canada doesn’t seem like the best plan.

What some suggest — like Harold Hamm, the CEO of Oklahoma’s Continental Resources — is that the US should end its crude oil export ban, which would make the oil market fairer for US oil companies. Congress imposed the ban in the 1970s due to the worry that we were becoming too reliant on foreign oil. Now that US oil prices have dropped, Saudi Arabia is attempting to undercut our prices so that it can recover what it has lost in the market. Further, a lift on the ban could help Ukraine and European countries that are under the thumb of Russian President Vladimir Putin.

Conversely, if the ban is lifted, we could see gas prices soar; lawmakers would become our scapegoat.

(From Politico)

Developed and Written by Dr. Subodh Das and Tara Mahadevan

November 29, 2014

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“Turkey’s Crisis Dents American Steel” – Wall Street Journal, 5 February 2014

Turkey is the world’s biggest scrap steel importer and a key consumer in the $20 billion US steel scrap industry. But Turkey’s current economic crisis is taking its toll on the US scrap steel industry, the country’s weak demand and declining currency making imports very costly.

The US is the number one exporter of iron and steel scrap, selling $10 billion per year, more than two times the amount Japan sells, second to the US. Turkey has been the number one importer of US scrap since 2008; the country’s steelmaking companies mainly use electric-arc furnaces to melt down the scrap imports. Turkey, in turn, sells to Iraq, Saudi Arabia and the United Arab Emirates, becoming the largest exporter to these countries.

In the first 11 months of 2013, Turkey’s imports dropped 18% to 4.9 million tons, a huge hit to the US scrap steel industry. Turkey is now importing more steel from Europe, and manufacturing steel products from semi-finished steel items purchased from Russia, instead of manufacturing steel from scrap.

East Coast scrap traders are more widely affected by Turkey’s decline, whereas West Coast traders chiefly export to Asia. While demand from Asian countries, such as China, is predicted to continue growing, there is a worry that the demand could dwindle as China has its first “scrap cycle,” a phrase applied to a young, industrialized country that begins producing its own scrap with recycled steel goods. China will remain an importer for now, but the question remains whether China, like the US, will also become a global exporter of steel scrap. The US steel scrap industry has a lot to lose.

Developed and Written by Dr. Subodh Das and Tara Mahadevan

February 24, 2014

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Copyright 2013. All rights Reserved by Phinix, LLC.

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