Keystone: Exporting Canadian Oil Across America’s Backyard

Cross-posted from Huffington Post

Given the relentless “all of the above” energy strategy pursued by the Obama Administration, the release this past Friday of a positive environmental impact report for the proposed Keystone oil pipeline was no big surprise. The U.S. State Department essentially declared that since the extra-dirty tar sands oil designated for the pipeline was going to be shipped and burned one way or another, building the pipeline down from Canada to Gulf coast refineries would not have that much impact on the environment — despite warnings from climate scientists that burning all the tar sands oil would be “game over” in the fight to stop climate change.

This conclusion by the State Department was a laughable bit of self-fulfilling logic. But perhaps the biggest surprise in the report was the tacit admission that the tar sands oil isn’t going to be burned in the U.S. at all. Instead, it is destined for refining and export overseas.

The State Department report details how Gulf Coast oil refineries will use the tar sands crude oil delivered by Keystone to replace supplies from Venezuela and Mexico, refine the crude into high-end products like gasoline, and then export the refined fuel overseas. Meanwhile, as if to add insult to injury, fuel prices paid by U.S. consumers in the Midwest are expected to jump as the pipeline will siphon off crude oil supplies that are currently landlocked in America. The U.S. State Department did not, of course, highlight these findings at the top of its report but instead buried them down in the “market analysis” section, where it left a clear trail of breadcrumbs.

Interestingly, the State Department went way out of its way to argue that the pipeline won’t be used to export unprocessed crude oil. (Though the industry clearly expects otherwise: see here.) Yet at the same time, the State Department admits, using painstakingly disconnected phrasing, that the crude oil delivered by the pipeline will be processed by Gulf coast refineries and then exported, in a shell game whereby export refineries replace declining crude oil supplies from Venezuela and Mexico with Keystone Canadian tar sands oil.

Regarding the pipeline’s impact on the export of refined crude, the State Department report says: “…future refined product export trends are also unlikely to be significantly impacted by the proposed Project.”

And what exactly are those trends? The State Department reports that: “In 2005, exports began increasing… Export volumes have increased to over [3 million barrels of oil per day] in the first half of 2012. This increased volume of refined products is being exported by refiners as they respond to lower domestic gasoline demand and continued higher demand and prices in overseas markets.”

And why use the extra dirty crude oil to be delivered by the Keystone Pipeline? The State Department says: “Gulf Coast refiners’ traditional sources of heavy crudes, particularly Mexico and Venezuela, are declining and are expected to continue to decline. This results in an outlook where the refiners have significant incentive to obtain heavy crude from the oil sands.”

And there you have it, a shell game, with Keystone as the lynchpin for the whole effort. Gas prices go up for Midwesterners, big oil refineries profit from the overseas export of fuel processed from dirty tar sands oil, and the rest of us are that much further in the hole in our fight to stop climate change. The environmental impact statement appears to be a clear signal that the Obama Administration is headed down the road to approval. However, the growing backlash against the pipeline creates a headache for the president who just made a very public commitment to protect the climate. A fight is clearly in the works.

– Hunter Cutting is a consultant and writer.

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Impax shares tank as FDA flags fresh concerns on manufacturing plant

March 4 (Reuters) - Impax Laboratories Inc said U.S. health regulators raised fresh concerns related to manufacturing practices at the drugmaker's Hayward, California facility, sending its shares down more than 20 percent after the bell.

The company's hopes of securing an approval for its Parkinson's drug Rytari are tied to its ability to resolve issues at the plant, where the drug is partly manufactured.

The U.S. Food and Drug Administration completed its re-inspection of the Hayward facility and outlined 12 "observations", three of which had already been pointed in earlier communications, Impax said on Monday.

The regulator typically outlines observations from conditions that may constitute violations of standard manufacturing practices.

The FDA had rejected approval to Rytari in January, pending a satisfactory re-inspection of the Hayward facility.

"We have committed significant resources in our efforts to meet FDA requirements and are clearly disappointed by this news," Impax Chief Executive Larry Hsu said.

The FDA first expressed concerns related to the facility in a warning letter in June 2011.

The company said on Monday the FDA did not inform it on the impact the new concerns would have on resolving the warning letter, or if the agency planned to take further regulatory action.

Impax plans to respond to the FDA's new observations within 15 business days.

The company's shares, which were halted pending the release of its statement, fell about 21 percent to $15.80 in after-market trading on Monday afternoon.

(Reporting By Vrinda Manocha in Bangalore; Editing by Saumyadeb Chakrabarty)

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Keywords: IMPAX FDA/

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India rules against Bayer in cancer drug patent case

CHENNAI, March 4 (Reuters) - An Indian patent appeals board dismissed on Monday Bayer AG's petition against a government decision to allow a domestic company to sell cheap copycat versions of cancer drug Nexavar, delivering a blow to global drugmakers' monopolies on high-priced medicines.

Last year, the Indian patents office, under a mechanism called "compulsory licence", allowed Natco Pharma to sell generic Nexavar at 8,800 rupees ($160) for a month's dose -- a fraction of Bayer's price of 280,000 rupees.

Bayer challenged this decision with the Intellectual Property Appellate Board (IPAB) in the southern city of Chennai.

Although dismissing the petition, the board did order Natco Pharma to pay a royalty of 7 percent on sales of generic Nexavar to Bayer, an increase from the 6 percent royalty that had earlier been set.

($1 = 54.90 rupees)

(Reporting by Anupama Chandrasekaran; Editing by Alex Richardson)

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Keywords: INDIA BAYER/

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5 Reasons ObamaCare Will Add Far More To Deficits

"This is how a country goes broke. It's also how the economy and jobs are destroyed," Sen. Jeff Sessions said Tuesday in response to a report by the... View Enlarged Image

On Tuesday, Sen. Jeff Sessions touted a government report that blew a $6.2 trillion hole in President Obama's promise that his signature health reform wouldn't add a dime to the deficit.

According to the report by the Government Accountability Office, that promise rested entirely on several cost-control mechanisms in ObamaCare that almost no one thinks will work.

Medicare's trustees, the Congressional Budget Office and even Obama's own chief health care actuary "all expressed concerns about whether certain cost-containment mechanisms ... can be sustained," the GAO said.

The law, for example, assumes that economywide gains in productivity will justify slashing Medicare provider payments.

But as the GAO points out, health care has never kept track with such gains because of the "labor intensive nature of the industry and the individual customization of treatments."

Other cost saving measures, the GAO points out, are based on ideas that haven't even been tested, such as the so-called "accountable care organizations."

Then there's the cap on subsidies offered through ObamaCare's new insurance exchanges.

Under the law, those subsidies are supposed to top off at 0.5% of GDP, but the GAO — reasonably — believes this cap won't hold.

When you strip out these unrealistic cost control measures, ObamaCare ends up adding $6.2 trillion to federal deficits over the next 75 years, the GAO concludes, accelerating the nation's drive toward the real fiscal cliff.

The GAO has been issuing warnings about ObamaCare's shaky budget assumptions for a while now, but this is the first time it's put a concrete number against it.

Still, bad as this $6.2 trillion deficit boost is, the real figure is likely to be much higher, since the GAO is still being far too optimistic about the rest of ObamaCare.

Here are five big assumptions the GAO makes that aren't likely to hold true.

• Medicare cost controls somehow work until 2020. Even though the GAO figures ObamaCare's Medicare cuts are unrealistic, it still assumes the cuts take effect for the next seven years, and only then "begin to phase out."

• Per-capita health spending growth stays unusually low. Over the past 35 years, health spending has climbed 2% faster than GDP per capita. Yet the GAO assumes that this "excess growth" rate will be just 1% for ObamaCare programs going forward. If it's 2%, ObamaCare's long-term costs explode.

• Businesses don't drop coverage. The GAO also assumes that businesses won't abandon health benefits to save money.

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Snowquestration: How D.C. Fits In With The ‘Less Snow, More Blizzards’ Pattern

Washington, D.C. is abuzz with the news that a new storm is sweeping down towards the mid-Atlantic seaboard, already dubbed “snowquester” (or “snowquestration” if you’re a grammar stickler) in honor of the nation’s latest budget debacle.

There’s a 50 percent chance the snowquester will dump over 5 inches of snow within the Beltway, and a 20 to 25 percent chance it will immobilize the city entirely. Given Washington, D.C.’s meager snowfall in recent winters, the snowquester’s impending arrival is understandably grabbing everyone’s attention.

It’s a “teachable moment” for diving into how Washington, D.C.’s weather specifically fits what we know about climate change.

One paradox that’s emerged from climate science in recent years is the “less snow, but worse blizzards” pattern. The Associated Press recently summed up the logic behind this: “A warmer world is likely to decrease the overall amount of snow falling each year and shrink the snow season. But when it is cold enough for a snowstorm to hit, the slightly warmer air is often carrying more moisture, producing potentially historic blizzards.”

Global warming is bringing us closer to the sweet spot where moisture in the air is maximized while temperatures remain low enough to cause snow. And recent studies have confirmed that snowfalls over the last 100 years in the United States, as well as those projected for the next 100, fit this pattern.

Jason Samenow over at the Washington Post decided to dig into whether D.C.’s weather specifically has lined up with the “less snow, more blizzards” pattern. Sure enough, it does:

In the 30 winters since 1984 (including this year, assuming we don’t miraculously get 14 inches of snow in the coming weeks), only 5 winters have had above average snowfall in D.C. – compared to 25 winters with average to below average amounts (15.4 inches or less). In 4 of the 5 winters with above average snowfall, the total was 2 to more than 3 times normal – or 30.1 to 56.1 inches (in 1987, 1996, 2003, and 2010). Or, put another away, the 25 snow-deprived winters averaged 9 inches of snow, the 5 snowy winters averaged 40 inches.

At the same time, D.C. has not seen accumulating snow in November for the last 16 years, the longest stretch on record. And the 30-year average for snowfall has dropped from 24 inches in 1918, to 18 inches in 1984, to 14 to 15 inches this year.

“Shorter snow season, less snow overall, but the occasional knockout punch,” Princeton University climate scientist Michael Oppenheimer told the AP. “That’s the new world we live in.”

It should be noted that it’s the wrong question to ask whether climate change “caused” this or any particular snow storm. The effects of global warming feed into and intensify a range of factors that contribute to more extreme weather. As with a baseball player on steroids, no one hit is “caused” by the steroids — but the use of steroids (a.k.a. global warming) causes the player (a.k.a. the climate) to break records at an unnatural pace. And the rate and severity of snow storms, floods, downpours, droughts, and forest fires have all been on the uptick in recent decades.

Admittedly, even if snowquester does its worst, the 2012-2013 winter season will remain in the “less snow” half of the pattern, given how little snowfall D.C. has already seen. But the above remains an important lesson that the effects of climate change are comprehendible, measurable, at least somewhat predictable — and, most importantly, they’re here.

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DAY'S END ROUNDUP

FROM THE BLOGS:

Reviewing the Keystone XL tar sands pipeline: the more we learn, the worse it looks
At The Huffington Post, Susan Casey-Lefkowitz claims that the State Department's draft environmental review of the Keystone XL pipeline underestimated the harmful impact of the pipeline's construction.

Fallout from 'Untouchables' documentary: another Wall Street whistleblower gets reamed
Matt Taibbi, in Rolling Stone, outlines two specific cases in which those responsible for the 2008 financial crisis were never brought to justice.

Brookings glosses over Amtrak's failings
Cato's Randal O'Toole questions the Brookings Institution's claims that Amtrak's passenger trains are "viable."

Vice President Joe Biden at AIPAC
The Washington Post's Jennifer Rubin argues that Vice President Biden exaggerated the successes of the Obama administration's policies with respect to Israel.

OTHER NEWS SOURCES:

Obama nominates McCarthy for EPA, Moniz for Energy chief
The Hill's Justin Sink reports on President Obama's most recent cabinet appointments.

House government funding bill seeks to soften sequester's blow
The Hills Erik Wasson reports on a bill that attempts to diffuse the harsh defense cuts that will be taking place as a result of the sequester.

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Obama to deliver US Naval Academy graduation speech

President Obama will deliver a speech at the U.S. Naval Academy's graduation in May.

The Naval Academy's superintendent, Vice Admiral Michael Miller, told the school's Board of Visitors on Monday that Obama would be the keynote speaker at the May 24 graduation, according to the Associated Press.

Sixteen presidents in total have spoken to graduating classes at the Naval Academy, more than at any other service academy, according to academy spokeswoman Judy Campbell.

Obama's speech will be the second graduation speech he delivers to the Naval Academy. His first speech was in 2009.

Obama is also scheduled to deliver the commencement address at the Ohio State University.

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Fair 'treatment' for the military

By Susan E. Foster and Jim McDonough - 03/04/13 04:10 PM ET

America claims to revere its veterans and has demonstrated an admirable commitment to those returning from our wars with visible wounds. Public and private organizations, as well as countless individuals, have extended their generosity and compassion to those heroic men and women who have served our country. But sadly, we seem to turn a blind eye toward the very real and often debilitating effects of extended combat exposure and the invisible wounds it causes. Marked less by physical scars and missing limbs, many soldiers returning from war face serious diseases of addiction and mental illness as they struggle to readjust to civilian life.

Unsurprisingly, the effects of recent war for many of our hundreds of thousands of service men and women have not been dissimilar to those of past wars, including high rates of alcohol, illicit and prescription drugs use, addiction, depression, post-traumatic stress, brain injuries and other mental health problems. Untreated, these conditions too often result in high rates of suicide, unstable lifestyles and criminal activity that can lead to incarceration.
One recent step toward addressing these problems was the introduction of the Justice and Mental Health Collaboration Act by Sen. Al Franken (D-Minn.) and Rep. Richard Nugent (R-Fla.). If passed, this bipartisan initiative will help improve treatment for veterans and the mentally ill in our criminal justice systems. The bill extends for five years the authorization for mental health courts and crisis intervention teams and expands veterans’ treatment courts, all important and proven tools to divert non-violent offenders from unnecessary incarceration. While these steps are an important part of the solution to the myriad addiction and mental health related issues affecting veterans, by themselves they will not solve the larger problem of keeping our military personnel from landing in the criminal justice system in the first place.
The correlation of substance use and mental illness with incarceration is well established. CASAColumbia researchers have found that substance use is implicated in the crimes and incarceration of 85 percent of inmates in the U.S. Almost two-thirds of all inmates meet medical criteria for addiction involving alcohol and other drugs and one third have a mental health disorder. Furthermore, a quarter of all inmates suffer from both addiction and mental illness. Left untreated, these inmates are more likely to engage in repeat offenses. But, many of them would never have entered the criminal justice system if their substance use, addiction and mental health problems had been prevented or treated effectively. To neglect these health problems until they result in complications with the law is tragic, costly and largely avoidable.

We must focus on both preventing the addiction and mental health ills that plague so many of our military personnel and on intervening early to keep these conditions from worsening. To do this, we must put in place coordinated outreach to engage those who require assistance and connect them with needed care. This process should begin during active duty and continue after retirement, and it should include the National Guard and Reserves. We must incorporate comprehensive screening and early intervention for both addiction and mental illness into routine medical care for all military personnel. We need to ensure that our service men and women receive effective, evidence-based treatment and disease management services as they do for other medical conditions. We must stop simply referring people to support groups or requiring they “get over” their addiction before other services will be provided. There is plenty of evidence available on how to effectively treat addiction and mental illness.  Failure to do so is not only inhumane, it borders on medical malpractice.

Creating an accountable, effective outreach, prevention and treatment infrastructure will allow us to mobilize the quality care we owe our military personnel and their families, including both the younger cohort of military in Iraq and Afghanistan and the aging Vietnam era population.

So while we endorse a quick passage of the Franken-Nugent bill, we advocate also for a more comprehensive system of addiction and mental illness prevention and treatment, one that will help our military personnel long before they run afoul of the criminal justice system – or worse.
Foster is vice president and director of policy research at the National Center on Addiction and Substance Abuse at Columbia University (CASAColumbia)
McDonough, a retired colonel, is the author of the Vietnam memoir, Platoon Leader, a leader in drug control policy nationally and in Florida, and former secretary of the Florida Department of Corrections.

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