Trump demands share of profits in exchange for Keystone approval

[sitetest]

The Keystone XL pipeline....

Wildly excellent post.

[Weird Tolkienish Figure]

The Keystone XL pipeline was to carry the Bitumen (very heavy crude) from the Oil Sands region of Alberta south to US refineries. Along the way, it was to pick up some 100,000 bbls of oil per day from the Bakken Play in North Dakota and Montana (light sweet crude). The US has had, for some time, the legal ability to export refined products, and now to export crude oil as well, so this transshipment and refinery supply would benefit producers and refiners alike, with excess product being able to be exported as well from the Gulf Coast.

For Canadian producers, this would mean secure transport to a ready market, where attempts to export crude oil and CNG have been largely thwarted by court actions, either from environmentalists, First Nations, or both.
 
What it means to the US, aside from the above:

First off, this is a privately funded (Industry pays the bills) project. Government gets to say yea or nay, but that, aside from regulations and stipulations for environmental and other purposes (adding cost, whether necessary or not), is what government puts in. The rest, from leasing rights of way, construction costs, infrastructure, etc., are on the entities building the line, as are the operating costs. Profit should go to the company operating the pipeline. Corporate profits are already taxed.

If Trump is proposing a "better deal" that includes taxing oil pipelines, what about the other pipelines which carry everything from natural gas to water to cooking oil? How is this a "Better deal" for the companies involved, if they have to pay the government a cut off the top (A cost which will be passed on to consumers). It won't be a better deal for consumers.
Or is he proposing negotiating down right of way leases (worse deal for landowners). Or labor costs (not a better deal for people who need work).

It reeks of needless government intervention, and it is likely the pipeline would be operating by now without an already healthy dose of government involvement.

You make very good points, but Wikipedia says the company is "Transcanada" building it. I'm ignorant of the taxation implications of the pipeline and a presumably foreign corporation. I suppose their America subsidiary will be taxed? I have no idea.

[Chosen Daughter]

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A box of rocks is quite intelligent compared to these trump haters.

Hate to insult rocks like that though.

That is classical.  Thanks!  Only A Trump supporter could post that they thought rocks had feelings.

your not going to chain yourself to any are you?

[DB]

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A box of rocks is quite intelligent compared to these trump haters.

Hate to insult rocks like that though.

The box of rocks is all yours. A royalty is paid for something you own the rights to. Alaskan oil companies pay royalty on oil that is owned by the state. Neither the land or the oil for Keystone is owned by the US government. You simply want to redefine "tax" as a "royalty" to make it more palatable to the easily fooled. Something the left does all the time. Something principled conservatives don't need to do.

[Smokin Joe]

You make very good points, but Wikipedia says the company is "Transcanada" building it. I'm ignorant of the taxation implications of the pipeline and a presumably foreign corporation. I suppose their America subsidiary will be taxed? I have no idea.

Other foreign companies which do business here are, so I would believe that would be the case.
https://en.wikipedia.org/wiki/TransCanada_Corporation

Transcanada is pretty well diversified in North America, both in pipelines and electrical generation.

http://www.keystone-xl.com/facts/myths-facts/

[EC]

Thank you for weighing in, Joe. 

Speculation is all well and good during a bull session, but not asking someone who actually knows what they are on about if they are available is just foolish.

[Smokin Joe]

When I hear the word share with the state, I usually think the Dems are who support crap like this..

It sounds like he wants to turn a private road into a tollway, without shelling out a dime.

Whatever oil which travels down the pipeline from US Federal Leases will have royalties and extraction taxes paid on it to the appropriate jurisdiction or the royalty owners (owners of the mineral rights if in private hands, the appropriate governments if government owned mineral rights). That happens before the oil enters the pipeline.

The revenue of the pipeline company will be taxed.

When the oil gets to the refinery and is refined, the various fractions used as motor fuels will have the appropriate excise tax applied (Federal Gasoline/diesel taxes) or be taxed as aviation fuel.

But adding another layer of taxes to the feedstock before it ever gets to the refinery will raise prices on all refined products.

Of course, the "Greedy/Big/Eevil Oil Companies will be blamed.

[Jackson]

There will be a cost for building and maintaining the pipeline and the land it runs on. Who should have to pay for that-  The ones making the Profit off it or the Taxpayers?

They say Trump supporters are stupid; Here's proof. This moron thinks that US taxpayers are bearing the cost of building and maintaining Keystone. With a swiss-cheese brain like that how could this joker be anything but a Trumpite.

[EC]

No, my friend. Ignorance is not stupidity, it is simply not knowing. With all the fuss and bother about Keystone in the news and in DC, it's not a surprise that people get the impression that the Feds are somehow paying.  While there are things which every educated person should know, we live in a massively complex society and no one person can know everything.

Stupidity comes in when someone is informed by a person with actual experience of what the deal is and then still refuses to accept it.

[Smokin Joe]

There will be a cost for building and maintaining the pipeline and the land it runs on. Who should have to pay for that-  The ones making the Profit off it or the Taxpayers?

The pipeline is privately owned and would be paid for by the company building it.

Rights of way are leased for the pipeline, and any maintenance on the pipeline or necessary remediation of land is the responsibility of the pipeline owner. Frequently, such pipelines are buried well below plow depth on agricultural land, and the land above the pipeline continues to be used for agricultural purposes. There are definite regulations in regard to setbacks from occupied buildings, and the lines are (or should be) clearly marked. Surface facilities needed for maintenance, pump stations, etc. are also built by the pipeline company on sites either leased or purchased outright for the purpose.

Companies like Kinder Morgan, Enbridge, and Transcanada pay for the construction and maintenance of those facilities also, and have armadas of attorneys and negotiators who go forth in the planning phase to obtain the rights of way easements and clear up the siting issues prior to the pipe being laid.

Much like drilling an oil well, where everything has to be planned and approved before the dirtwork begins, the pipeline has to be planned, EIS filed, all surveys conducted, rights of way and easements and permits obtained before anyone strikes an arc and starts welding pipe together.

The taxpayers don't pick up that tab, it is all on the company putting the pipeline in. Regulatory shifts commonly contribute to costs even during the planning phase.

The only pipelines the government picks up the tab for are ones where the government is the entity installing the pipeline (usually for water). There are some government owned oil pipelines in association with the Strategic Petroleum Reserve that the taxpayers do pick up the tab for, but

For natural gas, oil, and other liquids, the vast majority of pipelines (the ones for profit) are owned and operated by equity companies. Cost of transport drops for say, a barrel of crude from the Bakken, from seven to fourteen dollars a barrel by rail (depending on destination) to $6.50 to $7.50/bbl by pipeline. Those savings can be passed on to some degree, but only if the pipeline option is available. Removing that pipeline option means additional costs to consumers at some point.

Government costs are the cost of regulation enforcement, and usually revenue (direct (taxes) and indirect (economic stimulation and sales/property/income taxes) from jobs) brought in by the pipeline and its operation more than offset those costs.

[Smokin Joe]

They say Trump supporters are stupid; Here's proof. This moron thinks that US taxpayers are bearing the cost of building and maintaining Keystone. With a swiss-cheese brain like that how could this joker be anything but a Trumpite.

That was unnecessary.  There is enough misinformation about how pipelines are constructed, rights of way are obtained, and a host of other issues surrounding pipelines out there, that it is a small wonder people outside the industry are often grievously misinformed.  I hate to say it, but that lack of information doesn't mean they are stupid, it means they are, well, average.

I'm not here to attack people for their lack of information, or even necessarily for having the wrong idea. To me, the plan is to teach them so they are more knowledgeable on the subject. From there, the answers fall into place.

[MACVSOG68]

That was unnecessary.  There is enough misinformation about how pipelines are constructed, rights of way are obtained, and a host of other issues surrounding pipelines out there, that it is a small wonder people outside the industry are often grievously misinformed.  I hate to say it, but that lack of information doesn't mean they are stupid, it means they are, well, average.

I'm not here to attack people for their lack of information, or even necessarily for having the wrong idea. To me, the plan is to teach them so they are more knowledgeable on the subject. From there, the answers fall into place.

Nicely said Joe, as well as your good explanation above.

[thackney]

LOL, fair enough.
Since I  put out the old "@thackney", he may. I know he was in the process of moving, which could be a bit dicey. The Brazos river runs near the area, and it has been on the rise.

Thanks, been a bit busy lately.  The house we are supposed to close on Friday is supposed to have more than a foot of water in it Thursday based upon Brazos River Predictions.  The current owners are busting their tails preparing with an AquaDam, a giant inflated innertube surrounding the house to hold back the water.  Now they are predicting flooding in the neighborhood we currently live in due to Oyster Creek backing up and coming out of its banks (Missouri City).



As for getting royalty or other type payments based upon product flowing through the pipeline, that crap is nonsense.

Royalty payments are for when you already own the minerals.  Royalty payments are from when you sell YOUR minerals to a producer of those minerals.

No one gets payments based upon the amount of electricity flowing through the power line in the easement across a property, nor a pipeline, or railroad, etc.

You sell an easement, just like you sell acreage.  Once you sell it, that no longer is yours.

[wolfcreek]

The pipeline benefits America, and it benefits Americans.  And taxpayers aren't footing the bill.  I don't give a rats ass whether or not it benefits the government which is who would be the ONLY entity benefiting from a tariff.

Here's the deal.  Canada is willing to sell their oil to American refineries at below market price.  They are willing to do this because they do not have access to the global market and because the US is a reliable consumer.

In order to get more oil to market, Canada is willing to build a pipeline extending from Alberta oil fields to Gulf coast refineries.  To them, that is much easier and environmentally friendly than building a pipeline across the Rockies to the Pacific coast and putting the infrastructure in place for the loading of oil tankers.

As for the American consumer, we would have a steady supply of good quality oil at below market price instead of purchasing that high sulfur crap from Venezuela, thus protecting American consumers from the worst effects of the volatility that can plague world petroleum markets.

The Keystone XL pipeline is a win-win for the American consumer.  Unfortunately, Donald Trump isn't looking out for the American consumer here.

Show us the paper work.

[Hoodat]

Paperwork?  What specifically are you requesting?

[wolfcreek]

Paperwork?  What specifically are you requesting?

The deal. The one Trump says he can improve on.

Has anyone seen it?

[GrouchoTex]

Thanks, been a bit busy lately.  The house we are supposed to close on Friday is supposed to have more than a foot of water in it Thursday based upon Brazos River Predictions.  The current owners are busting their tails preparing with an AquaDam, a giant inflated innertube surrounding the house to hold back the water.  Now they are predicting flooding in the neighborhood we currently live in due to Oyster Creek backing up and coming out of its banks (Missouri City).



As for getting royalty or other type payments based upon product flowing through the pipeline, that crap is nonsense.

Royalty payments are for when you already own the minerals.  Royalty payments are from when you sell YOUR minerals to a producer of those minerals.

No one gets payments based upon the amount of electricity flowing through the power line in the easement across a property, nor a pipeline, or railroad, etc.

You sell an easement, just like you sell acreage.  Once you sell it, that no longer is yours.

Thanks for your assessment,@thackney. Good luck and God Bless your move. If there is any consolation, we are going through a once in a lifetime event, so we're told.
Hang in there, and thanks for weighing in.

[thackney]

The deal. The one Trump says he can improve on.

Has anyone seen it?

Trump appears to be talking about skimming profits on a private company above and beyond taxes.

If I sell an easement of my property for a Pipeline or Power line, why should the Feds take a cut of the value of that being moved?

[Hoodat]

The deal. The one Trump says he can improve on.

Has anyone seen it?

It's not Trump's deal to improve upon.  The federal government is not a party to it.  Donald Trump, being the big government guy he is, desires to project himself into things he has no business involving himself with.  It is what Democrats do.  And it is why we have fallen so far from the original intent our Founding Fathers established.

Interference from the current Executive Branch has screwed this up enough already.  Trump sounds like he wants to take over where the current President leaves off.

[Victoria33]

I don't understand this.  Trump wants to impose a "royalty" (even though it's not federal land), and that'll take an Act of Congress.  If Congress refuses to pass it, there isn't a royalty.  So how does that make Congress "irrelevant"?  Seems to be it would be a prima facie demonstration that Congress is very relevant indeed.

You don't get it - If congress doesn't go Dictator Trump's way, it's irrelevant because he will do it anyway - that's what dictators do.  He is a dictator, said another way, the ultimate boss, of his company and the US will be another business he runs "by himself", the ultimate boss, the dictator.  He has lived that way all his life and he will not change.

He has said winning is all he cares about.  If he wins the presidency, he will likely be done and want to go back to Trump Tower and put another picture on his wall, this one of being sworn in as president.  He will be surprised to know he is supposed to show up at work every day at the White House.

Absolutely never Trump.

[Victoria33]

Thanks, been a bit busy lately.  The house we are supposed to close on Friday is supposed to have more than a foot of water in it Thursday based upon Brazos River Predictions.  The current owners are busting their tails preparing with an AquaDam, a giant inflated innertube surrounding the house to hold back the water.  Now they are predicting flooding in the neighborhood we currently live in due to Oyster Creek backing up and coming out of its banks (Missouri City).

I live north of Dallas but own a townhouse in Conroe, TX.  I was informed yesterday my townhouse had 1/8" to 1/4" deep water in part of my downstairs area.  We left here yesterday about 5 pm and got to Conroe around 9 pm.  We worked until after 1 am to get the water out and set up fans to dry the Pergo floor.  Then fell into bed at a hotel, to get up this morning and put items that were in cardboard boxes which were now wet, in plastic boxes we bought this morning.  By 5 pm we were back in the car and got home around 9 pm.  I was sweated down, sweat in my hair and I hit the shower and washed my hair.

A roofer shows up tomorrow at the townhouses that had roof leaks or fireplace leaks - mine is fireplace.  Our Property Owner's Assn. will see to the repairs.

My house was not so bad - huge trees fell over on houses in Conroe, 150 people had to be rescued from water, 25,000 people were without power and crews were brought in to get power on.  We ate at a Dennys after 1 am when we finished working last night, and they only got power back yesterday morning.

People in Conroe and The Woodlands are in shock at the devastation.  When we went to Walmart this morning to get plastic boxes, the place was packed with people buying cleaning supplies, plastic boxes, put together cardboard boxes and all manner of things they needed to get through this.  Everyone was polite and the people behind us in the checkout line had water in their house and their furniture is ruined.

One of the townhomes where mine is, had a flood of water going into the house on one side and through the house and out the front door.  Both of those people are very sick, the lady with cancer and the husband will swollen feet from diabetes and he can barely walk; he is very thin and so is she.  Luckily, a son and grandson came to help them get the water out of their house.  Both of them are so weak they just can't help themselves.
I am 83 and this was hard for me but i was perfect compared to them.
It is really bad there.

I am resting tomorrow - taking a vacation in this house - staying cool.  I'll read and post some and that's it for a few days.
@CatherineofAragon
@mystery-ak

[txradioguy]

Uh, no it doesn't.  It'll be running through private property.

Which means that Keystone would IIRC more than likely pay the land owner for use and access to that piece of land that the pipeline runs through.

Now either Trump is going to use Kelo to seize the land or he's going to seize the money Keystone pays to the private land owner.

[wolfcreek]

It's not Trump's deal to improve upon.  The federal government is not a party to it.  Donald Trump, being the big government guy he is, desires to project himself into things he has no business involving himself with.  It is what Democrats do.  And it is why we have fallen so far from the original intent our Founding Fathers established.

Interference from the current Executive Branch has screwed this up enough already.  Trump sounds like he wants to take over where the current President leaves off.

So you have no idea what the original deal states?

[ScottinVA]

Haters gotta hate.  Trump knows exactly what he's doing. 

So.. if he knows exactly what he's doing, he'll have no excuses for the economic damage to this country ignited by the trade wars he's so excited about starting with Mexico, China, et al.

[Hoodat]

So you have no idea what the original deal states?

It is not my business to know, nor is it Donald Trump's.  The only concern the government has is to guard against environmental damage and protect right-of-ways, all of which has already been worked out.

Look at it this way.  Suppose a Canadian company decides to clear cut several million acres of trees.  As they cut, they work out a deal with US company Home Depot to buy all the trees just so they can have steady reliable income for their cutting and so there is no backlog of cut trees lying around waiting for a buyer.

So eager is this Canadian company to seal this deal with Home Depot and start getting rid of trees that they promise to purchase a fleet of Canadian trucks that will transport the trees directly to lumber mills that Home Depot owns.  So far, so good.

Except now some mafia boss comes around and says, "Wait just a minute.  How am I going to get paid in all of this?  You need to give me a cut too."

So when the Canadian seller and the US buyer are faced with the added cost of graft, who benefits?  Does the consumer benefit from higher costs?  Does Home Depot benefit with lower sales due to those higher costs?  Do the truck drivers benefit from less trips made because of lower sales?  Does the Canadian seller benefit from having to cut back production due to lower sales and higher costs?

Get the government the hell out of the way.  The last thing this country needs is someone like Donald Trump injecting himself into this.