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DAVID KRUSE

By Staff | Feb 3, 2012

I have always loved history, especially the footnotes that sometimes jump out at you in an event that you knew nothing about – one that you respond to with “Wow!”

One such exclamation for me came when reading Daniel Yergin’s, “The Prize – The Epic Quest for Oil, Money & Power.” The following excerpt explains a snippet of history that is very important today in light of the Keystone pipeline and growing tension with Iran:

“Germany declared war on the United States on Dec. 11, 1941, four days after Pearl Harbor. U-boats immediately began to operate in American coastal waters, with devastating results. Their priority targets were oil tankers, easily recognizable by their distinctive profile.

After a Cabinet meeting in January of 1942, Ickes warned the President that renewed tanker sinkings in the Atlantic would bring new pressures on supply, particularly in the Northeast.”

Altogether, the number of tankers sunk in the first three months of 1942 was almost four times the number built. The U-boats seemed to operate with impunity along the entire coast. The dismal toll of sinkings mounted. ‘The situation is desperate,’ Ickes wrote to Roosevelt in late April 1942.”

An alternative to tanker shipment was put forward – the construction of a pipeline on a scale never before attempted, and of an unheard of length, stretching from Texas to the East Coast. Clearly, the steady movement of oil through a pipeline at 5 miles per hour would be far safer than using seagoing tankers and far cheaper than using railroad tank cars.

Construction on the pipeline project, dubbed the Big Inch, finally began in August 1942, and what followed was one of the extraordinary feats of engineering in World War II. Nothing like it had ever been done before. The oil transportation and construction industries were mobilized to build a pipeline that would carry five times as much oil as a conventional one, a conduit that would stretch halfway across the country and require a plethora of newly designed equipment. Within a year and a half, by the end of 1943, Big Inch, 1,254 miles long, was carrying one-half of all the crude oil moving to the East Coast. At the beginning of 1942, just 4 percent of total supplies had arrived on the East Coast by pipeline; by the end of 1944, with Big Inch and Little Inch, both completed and in operation, pipelines were carrying 42 percent of all oil.

Not long ago President Obama lamented that “we don’t do big things in this country anymore.” Last week the President rejected approval of the proposed Keystone pipeline that would bring the equivalent of a third of the oil that Iran produces in total annually from the Canadian tar sands to refineries in the U.S.

What would FDR have done? I think he would have told the environmental radicals that have this President’s ear that this pipeline would be built in the interest of national security. WWII lasted 3 years and 8 months while the Obama administration would drag out an environmental study longer than that. The Big Inch was in operation in a year and a half with 1940’s technology.

The President does a lot of complaining about political obstacles, but this one was of his making. We built an oil pipeline across the tundra of Alaska. The environmental risk from crossing the Dakotas and Nebraska is infinitesimal by comparison. Nebraskans, concerned over the route, quickly found a new one that they approved that was acceptable.

The opposition is using the pipeline controversy and contrived environmental risk as a weapon to slow the development of the Canadian oil sands, which they see as an environmental disaster.

Canada is going to develop its oil and immediately started another pipeline project of its own to move the oil to the West Coast where it can put it on a ship sending it anywhere. By rejecting the Keystone pipeline, the U.S. just became an unreliable buyer for Canadian oil, essentially telling the Canadians not to depend solely on us to buy their oil.

The President’s decision to stop the pipeline project which would have been one of the largest infrastructure projects in the country creating 20,000 jobs, is one of his worst as President. Biofuel has made a contribution to U.S. oil security, now providing 10 percent of U.S. motor fuel. Old oil fields are producing again and North Dakota has become our fourth largest oil producing state because of the new technology of fracking. This has unlocked enormous gas reserves.

When new offshore salt oil fields are developed off Brazil this hemisphere will become nearly independent from Middle East oil, which strengthens our national security. The day could come within a few years when the Strait of Hormuz would be someone else’s problem.

There is no silver bullet for U.S. energy security. It comes together as a patchwork of technology, sources and infrastructure to complete a quilt that protects us. Critics oppose ethanol because it can’t end oil imports.

They oppose the Keystone pipeline trying to shift demand away from oil.

They put so many holes in the quilt that it is not a blanket. Good Lord, the President of the United States should know that.

His energy advisors are dangerous. They obviously have not read their history. When the President laments that we don’t do big things anymore in this country, everyone should be looking at him as to why.

David Kruse is president of CommStock Investments Inc., author and producer of The CommStock Report, an ag commentary and market analysis available daily by radio and by subscription on DTN/FarmDayta and the Internet.

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