Pipelines, Canals & Trains

New York Sen. Chuck Schmer seems to have donned the mantle of opponent in chief of the Keystone Pipeline.  As such, we think a closer look at his thoughts on the matter is in order.  According to his comments on Face the Nation, Schmer appears to see all projects in terms of the jobs created.  “By most estimates it would create several thousand temporary construction jobs and only 35 permanent jobs,” Schumer said.  It seems the only people valuing this employment are the union members who would fill these jobs.  He didn’t stop there, he added,  “Why create very few jobs with the dirtiest of energy from tar sands when you can create tens of thousands more clean jobs using wind and solar?”  According to Chuck when you do something, you judge it only in terms of a jobs program.  How many people does it employ, rather than it’s actual utility.  This brought to mind an anecdote we read awhile back.  An account from the economics writer Stephen Moore that was printed in the Wall Street Journal in 2009.  Moore stated that he used to visit Milton Friedman and his wife, and together they would dine at a favorite Chinese restaurant:

“At one of our dinners, Milton recalled traveling to an Asian country in the 1960s and visiting a worksite where a new canal was being built. He was shocked to see that, instead of modern tractors and earth movers, the workers had shovels. He asked why there were so few machines. The government bureaucrat explained: “You don’t understand. This is a jobs program.” To which Milton replied: “Oh, I thought you were trying to build a canal. If it’s jobs you want, then you should give these workers spoons, not shovels.”

There are similar anecdotes across the globe but we like this one because it just sounds like Nobel Laureate Friedman and it’s about a canal.

Sen. Schmer furthers defines his position by proposing  nativist amendments to the Keystone bill to be sure that only “Americans can benefit from any jobs created.”  Only American steel can used.  The Canadian oil can only be used in the U.S.  All this got us to thinking of a New Yorker who actually completed a great project and how far New York leaders such as Schmer and Gov. Andrew Cuomo, who banned fracking in the state, have moved from their marvelous heritage.  Gov. DeWitt Clinton ensured the commercial primacy of New York, by championing and building the Eire Canal.  An engineering marvel at the time (it opened in 1825), Clinton persevered in the face of intense opposition to “Clinton’s Ditch”, to build a water link from the Atlantic Ocean to our Midwest, opening the whole area to settlement and commerce.  Nowhere in in his sales pitch to voters and potential domestic and foreign bond investors, was there any reference to the number jobs crated.  In fact the builders used labor saving such as a new technique to remove tree stumps, a labor intensive problem and the use of White’s Hydraulic Cement.  Because new tolls would collected on each completed segment, time not jobs was of the essence.  To this end hundreds of skilled German stone masons were employed.  In any case, the bondholders wouldn’t have it any other way.  How different from Schmer and Cuomo.  One could actually imagine them opposing the canal on not only labor and nativist grounds, but for the potential despoiling of pristine Midwestern forests and displacing native Americans.  Progress isn’t always popular among progressives.

Schmer’s opposition to Keystone and Cuomo’s backing of the New York State fracking ban contribute mightily to this point of view.  Production from the Canadian oil sands and fracking in the United States has added millions of barrels of oil to the world market, generating the price pressure that has drastically dropped the price per barrel.  To our minds, this has had very positive results from saving the average family at least $550 a year on fuel costs to weakening those in the world that would wish us ill.  Russia, Iran.,Venezuela, Cuba and the wealthy in Saudi Arabia and the Gulf States who fiance the Jihadists all will a lot less money to make trouble.  Schmer, however, only sees  “dirty” Canadian Oil being shipped by the pipeline, conveniently overlooking the fracked North Dakota Oil that would also be shipped.  He, obviously,  favors the present use of dangerous and environmentally questionable rail shipments to get this light crude to market.  Schmer would back  continued  use of similar Venezuelan  heavy crude rather Canadian.  Schmer and Cuomo might make the argument that the price drop will cost energy related jobs, but they never acknowledged those in the first place.  Cuomo, in any case made it impossible to have any of them in New York.  This hasn’t stopped progressives from the top down claiming credit.  As President Obama recently boasted to a crowd at Northwestern University:

“Right off the bat, as soon as I came into office, we upped our investments in American energy to reduce our dependence on foreign oil and strengthen our own energy security. And today, the number-one oil and gas producer in the world is no longer Russia or Saudi Arabia. It’s America.

For the first time in nearly two decades, we now produce more oil than we buy from other countries. We’re advancing so fast in this area that two years ago I set a goal to cut our oil imports by half by—in half by 2020, and we’ve actually—we will meet that goal this year, six years ahead of schedule.

Conveniently, he overlooks fracking was done primarily on private lands with virtually no government input.  Of course not all private lands.  Again, fracking under Cuomo is banned in New York State.  In any case Canadian Oil Sands production also contributed to the price collapse and obviously President Obama, Schmer and Cuomo  had nothing to do with that.  Didn’t anyone ever tell them that loudly complaining about how a meal is prepared and then when the compliments come pouring in, pushing forward to take a bow is in dreadfully bad taste.

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