Biggest Oil Man In The Bakken: Keystone Pipeline Is No Longer Needed

BF-AD541_HAMM_G_20120921191514

Harold Hamm, CEO of Continental Resources which is acknowledged as the biggest player in North Dakota’s Bakken oil boom, says the Keystone pipeline isn’t necessary any more (via Aaron Flint):

Oklahoma’s pre-emiment oilman, Continental Resources CEO Harold Hamm, joined the chorus after developer TransCanada agreed to add an on-ramp to transport oil from the Bakken Shale in North Dakota and Montana.

But apparently Hamm has changed his mind on the project.

“It’s not critical any longer,” Hamm told National Journal Daily‘s Amy Harder. “They just waited too long. The industry is very innovative, and it finds other ways of doing it and other routes.”

This may come as a surprise to some, but it’s worth remembering that no so very long ago Hamm was an opponent of the Keystone pipeline, even going so far as to form a lobbying group in 2009 to oppose the building of the pipeline. “We basically stopped Keystone at the border,” Hamm said in an interview with Reuters at the time explaining how his group helped block permits for the pipeline. “We didn’t want all that oil dumped in Oklahoma.”

Hamm didn’t want American markets flooded with cheap Canadian crude, but when TransCanada agreed to accept Bakken crude into the Keystone pipeline as well, Hamm changed his tune.

Which was…convenient.

So why has Hamm changed his tune again? Probably because the situation has changed again. The infrastructure crunch for the Bakken is showing signs of easing, and will be eased even more by the time Keystone ever gets approval, so the most profitable course of action is for Hamm to oppose it again from the standpoint of protecting the markets he operates in.

That may be a smart move for Hamm, who was never supporting the Keystone pipeline from a desire to promote free markets and fair competition. Those things are what’s best for the market, and thus energy consumers, but not so much for people like Hamm.

Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

Related posts

  • zdavid53

    Harold owns several rail facilities and operates them. A pipeline would be a cheaper transportation route. He is making huge profits on his rail system. Why give that up. Also, the volume of the pipeline for bakken crude oil is not that huge. That view is shortsighted, however. If we had the disaster that happened in Canada, say in Fargo, Kansas City, or Oklahoma City, for example, what would happen to rail shipments? From a consumer standpoint, supply would be enhanced to the point of better supply and pricing of gasoline. I can’t help but think that Harold is maybe thinking if he and like minded people opposed the pipeline, maybe Obama might be more likely to approve it.

    • Harold Hamm fan

      Maybe Harold opposes Keystone because he is proud to be an American & is scared of Chinese oil control?

      • Clairvoyant

        It has to do with business sir. But thanks for playing.

        • Harold Hamm fan

          Different camps oppose Keystone. One is the environmental whackos whose arguments don’t hold much water. I’m sure Harold doesn’t fall under that category. There’s another group who want American energy independence and Keystone appears to work against that. China owns major Canadian oil assets, China has tremendous influence over TransCanada, & Canada’s Chinese owned oil would flow to refineries in the gulf to be exported to foreign markets. Please explain how that makes America energy independent? I can see how Harold could fall under that category. So you’re correct it probably has much to do with business and good ole American patriotism combined.

          • JoeMN

            You and the second group are woefully misinformed.
            This oil would replace undependable Venezuelan oil refined at the Gulf.
            Some refined fuel would in fact be sent to China.
            Remember, oil is a commodity traded worldwide.

            The greater the supply, the less price volatility.
            The US would be more energy independent by way of this oil flowing and refined inside the US

          • Harold Hamm fan

            How can you claim woefully misinformed? You’re the one who is misinformed. You completely ignore the fact that China owns significant oil assets in Canada. Examples include CNOOC’s recent $15 billion purchase of Nexen, also China’s involvement in MacKy River project, And Dover project, etc. just to name a few.
            You ignore the fact that China has significant influence over Keystone XL’s parent company TransCanada and China is involved in numerous other pipeline projects throughout Canada.
            And you ignore the fact that the Chinese owned Canadian oil would flow down to Motiva refinery in Port Arthur, TX **largest refinery in the United States and it is owned by Saudi Arabia. From there the oil would be exported to foreign markets (note, have you seen China’s oil consumption projections in the coming years? It’s astonishing.)
            By the way, almost forgot, oil shipped from Saudi Arabia owned Motiva Refinery to foreign markets doesn’t pay taxes to the United States.
            I’ve taken time to provide specifics to defend my opinion. Can you provide me specifics to support your flawed opinion that the U.S. would be more energy independent by way of this oil flowing and ruined in the U.S.?

          • Harold Hamm fan

            ^ meant to say “oil flowing and refined in the U.S.” I forgot to address your point that oil is a commodity traded worldwide. You are correct. I agree. So how do you explain China changing the oil currency from the U.S. dollar to the Chinese dollar last year? Ever since the 70’s the U.S. dollar has been the oil currency.

          • JoeMN

            So how do you explain China changing the oil currency from the U.S. dollar to the Chinese dollar last year?

            _______
            Don’t blame China for this, blame the Fed.

            China is now signing long term contracts with Venezuela
            This is for oil that would otherwise find it’s way to gulf refineries.

            China now owns about 10 percent of Canadian tar sands oil.

            That leaves a large amount available to flow into US territory and to those gulf refineries.

            THAT is what energy security looks like.
            A pipeline brings with it economic growth here in the US

            What you are purposing is to cut off our nose to spite our face.
            The Motiva refinery is a joint venture between the Saudi’s and Shell
            It is a large supplier of refined products with terminals up and down the east coast.

            Those are US jobs created there.

            Motiva does pay taxes.

            What you refer to is the consumption tax at the pump.
            This will remain unchanged.
            No I take that back.
            That will continue to lag along with a bad economy.

            The choice as it stands is between unstable Venezuelan oil, Canadian tar sand oil, or no oil.

            And it seems this administration is long on stall but short on desision making.

          • Harold Hamm fan

            Can’t only blame Fed for China oil currency. American politicians deserve blame as well.

            Your numbers are questionable. Where did you arrive at the 10% figure? According to congressional hearings, members of congress and witnesses, Canada doesn’t have the capabilities to move their bitumen oil (actually now much is Chinese owned Canadian bitumen) to their coasts for export partially as a result of strong opposition in Canada to many pipeline projects). Hence Keystone with China’s vast influence over TransCanada will ship China’s Canadian heavy crude to Saudi owned Motiva refinery in Port Arthur, Texas where large amounts of those refined products are expected, according to congressional testimony, to be shipped to foreign markets. Primarily China.

            I believe Keystone job creation numbers are over hyped. Certainly there will be American jobs strengthened from Keystone. But what receives no attention from American politicians is At what cost? American politicians love to brag Keystone will enhance America’s national security and energy independence. How exactly when America is permitting China to dominate the world oil markets and oil supply? China is no friend of America.

            So we strengthen a small amount of American refinery and pipeline jobs. At the same time we allow China to become the world oil and financial superpower. Sounds to me Keystone supporters are purposive to cut off our nose to spite our face.

          • JoeMN

            “The percentage of state-owned, Chinese-owned, investment in the oil
            sands in terms of future production will still be under 10 percent and
            so we didn’t feel with the acquisition the number was excessive. But new
            rules are now in place,” Oliver said.

            http://www.cbsnews.com/8301-505123_162-57558318/canadian-p.m-vows-to-block-further-chinese-ownership-in-oil-sands/

            ______

            So we strengthen a small amount of American refinery and pipeline jobs.
            At the same time we allow China to become the world oil and financial
            superpower.
            …………
            Given this figure, it seems to be quite the opposite of what you claim
            That there is a potential to significantly strengthen US jobs and energy independence, while reclaiming our position as financial superpower.

          • Harold Hamm fan

            That CBS story is the typical garbage journalism we receive from the American mainstream media. That story pushes the Harper regime narrative. It ignores details and balance. Read this story for a more accurate account about China’s activities in Canada (keep in mind the Harper government’s 10% narrative as you read) http://webcache.googleusercontent.com/search?q=cache:Gy7jbBJ_nFMJ:www.scmp.com/comment/insight-opinion/article/1105502/cnooc-nexen-deal-opens-canadian-investment-door+&cd=1&hl=en&ct=clnk&gl=us

          • Harold Hamm fan

            I was not referring to consumption tax at the pump. I was referencing Motiva refinery’s presence in a ‘Free Trade Zone’ meaning foreign exports from there do not pay tax to America.

          • JoeMN

            Export tariffs notwithstanding, Motiva is a net positive to the US economy and job market.
            Plus you fail to answer as to where we will make up for lost Venezuelan oil imports. .
            Your approach seems to be to cut off our nose to spite our face

          • Harold Hamm fan

            Way to sidestep the free trade impacts. Motiva is a net negative to America. You can’t see the Forrest through the trees. Motiva is Saudi Arabia’s first giant foothold in U.S. according to the NY Times. Regarding lost Venezuelan imports, China now has that oil and China’s Canadian oil will flow to Motiva and be exported to itself with no tax paid on those exports to America. The CNOOC Nexen deal ramifications are huge. It opened the door for huge Chinese investments in future. It’s smoke and mirrors when Harper regime claims this is last deal of this stature with foreign state owned company. Damage is already done and China plans many more Canadian deals because that door is now open. So it’s intellectually dishonest to buy Harper regime’s narrative and protein as fact that only 10% of Canadian oil assets will be held by China. There are many other Canadian oil deals China is positioning itself to get in on. In addition according to congressional testimony TransCanada refused to guarantee U.S. consumers that they’d have access and rights to the Canadian tar sands oil first. TransCanada has been asked to make that guarantee to Americans but has refused. So your claim that all the rest of Canadasmcrude will come to America and compensate for the loss of Venezuelan crude is patently false.

          • JoeMN

            Motiva is a net negative to America
            ______
            Day in and day out, we hear liberals bitch about corporations taking jobs offshore.

            Suddenly we have a foreign investor willing to pour investment dollars INTO the US and what do we get ?
            Again,, Motiva is a large supplier of refined products for the East coast.

            It seems there is no satisfying the economic illiterate.
            Canada is a dependable, friendly source for oil.

            Venezuela is neither.
            Yet they are still right now refineries in the gulf’s largest supplier.

            Furthermore, you must be insane to believe that the lack of Keystone will result in a drying up of crude supply to China.

            Pipelines will be built

            Supply will find demand.
            Even as we choose to sit on our hands

            Crude oil is a global commodity

            More oil extracted and refined outside the mid east and hostile countries with tyrannical heads of state equals greater price stability for us.

          • Harold Hamm fan

            Problem is the foreign investors involved here are communist China and Saudi Arabia (OPEC, Middle East). Those investment dollars American politicians are so quick to grab comes with nasty strings attached. You seem to think free market forces are at play here. Not so when you have the communist Chinese government state run oil companies manipulating global commodities. I recommend you read this opinion piece about China involvement in Canada http://opinion.financialpost.com/2012/10/25/terence-corcoran-fascism-by-another-name/
            To be clear, I love oil. Drill baby drill is my mantra. I favor oil pipelines over rail and truck any day of the week. I hate that American politicians and a small handful of their business cronies are whoring America out for a quick dollar from China though. That’s what this is all about. Cash is king. China has the cash. America doesn’t because our government is so screwed up with wasteful spending. America runs to China with our hands out and China is financing our energy industry, etc. What happens when you no longer can make mortgage payments on your home? The bank takes it. So for some jobs and projects in home districts politicians brag about economic development yada, yada, yada. All the while they’re handing the keys to America’s home over to China. Yeah that’s smart (sarc).

          • JoeMN

            Your opinion piece suggests Canada should reject state owned investments out of principle.
            However those SOE’s still must follow the same rules everyone else does.
            Problem is, here in the US those rules no longer reflect that free market we desire.

            If they did, those SOE’s wouldn’t stand a chance.
            The president on the other hand is holding up the pipeline on political grounds.

            (climate change)
            Republicans have their own interests.

            Energy independence to them involves ethanol mandates
            See a common thread here ?

          • Harold Hamm fan

            No actually that Canadian news publication’s opinion piece reinforces my belief that Canada should have rejected communist China state owned enormous investments based on legitimate national security fears. The Harper regime screwed up by placing more importance on access to Chinese money than public interest. Read this news story for more on that http://www.cbc.ca/news/politics/story/2012/09/21/pol-parry-csis-nexen-warnings.html

            Furthermore your claim that China will only own 10% of Canadian oil (based on Harper regime false narrative) is completely untrue. Read this news story for more on that title ‘Why the Nexen-CNOOC deal will spur more energy deals’ http://www.cnbc.com/id/100293769
            The truth is the real percentage of Canadian oil owned (and/or controlled) by China is unknown at this time. Plenty of deals are in the works and more will surely come in the future. Canada’s approval of CNOOC-Nexen deal (despite stern warnings about such deals from Canada’s national security agency) opened the door for massive future Chinese investment in Canadian assets. Harper regime claims no more deals like CNOOC-Nexen will ever occur again except under extreme circumstances. That’s a mute claim for Harper regime to make because CNOOC-Nexen already opened the door for Chinese investment growth. The damage is already done.
            So let’s recap. Massive quantities of Chinese owned Canadian oil (far greater than Harper regime’s false narrative of only 10%) would flow through China controlled Keystone XL pipeline (and/or Enbridge pipeline) to Saudi Arabia owned Motiva refinery in Port Arthur, Texas where it would be refined and a large percentage of those refined Chinese products would be exported to foreign markets (China) for consumption (that’s according to congressional testimony). Oh yeah and America wouldn’t see a dime in export taxes from Motiva because it’s in a free trade zone.
            Plus China changed the oil currency from the US dollar to Chinese dollar last year (global oil currency had been US dollar since 70’s). By the way a serious threat to America’s national security, in addition to many others, arose from that oil currency change. By switching from US dollar to Chinese dollar Iran has various restrictions lifted that were in place with US dollar oil currency. Isn’t that terrific (sarc).
            You can parse numbers and keep regurgitating false talking points and keep arguing Keystone would create jobs and spur economic growth and Hoeven’s other talking points. Fact is you are witnessing the whoring out of America to communist China. Plain and simple.

  • sbark

    I’m shocked, just shocked that the oil industry would take measures to protect market share.–well not really….but
    I wonder in what other ways and methods they spend billions in advertising to actually work against the consumer and the price he pays at the pump?

    • borborygmi45

      You sound almost liberal

      • http://sayanythingblog.com Rob

        He’s a big ethanol fan and is butt hurt over the oil vs ethanol feud.

        • sbark

          butt hurt?–there ya’ go with the pro-gay agenda again,…….
          well anyways…….so you hate 1.40 per gallon cheaper gasoline?….or is it you like the mandated trillions of the cost of USA troops in the middle east for another 40 years to keep oil flowing?

      • sbark

        why……am I complaining about the money he makes like a Lib would be doing? My beotch is with his use of politics to keep competition away from his rail systems, and thus also competition away from his oil production by keeping Canadian oil from coming across the border.
        A critical component of free market capitalism is competition—that is what protects the consumer, and keeps the “capitalist” honest—in this case he is using what he thinks is reverse phyc or outright political favors to stop the keystone. But we see this all time in a bigger govt environment—mounds of regulations prevent entry of efficient upstart companies all the time.—and that is what Liberals want them to do.

    • Gern Blanston

      Yes, that’s their goal – hurt the consumer.

  • awfulorv

    It’s a trap Barack, don’t believe them, you’ll look like an even a greater fool…Send Hillary to negotiate…

  • JoeMN

    In a cronyist regime he stands to gain a lot by opposing the pipeline.
    Obviously even more now than would be gained with the Keystone project.
    He could negotiate federal regulators off his back, or onto his competitors backs.

    Access to federal lands, ect ect
    The possibilities are endless

    • Harold Hamm fan

      Hoeven and Dalrymple operate a cronyist regime and they support it. Wonder what they stand to gain from Keystone approval?

  • Waski_the_Squirrel

    What is far scarier than “big government” is when “big business” and “big government” get in bed together. Here is a business using government to protect its market share.

    • borborygmi45

      Welcome to reality. Free Market Capitalism doesn’t exist except at the smallest scale. Black Market is a good start.

      • JoeMN

        Ah but free market capitalism will still be there when helicopter Ben and his fresh ink clan of Wall street bankers, and Keynesian carpetbaggers come crashing to the ground.

      • http://sayanythingblog.com Rob

        You’re the sort of fool who counts cynicism as wisdom.

        Sad.

      • Waski_the_Squirrel

        What makes you believe this?

        • borborygmi45

          please show me anyplace where a true free market is. If it is International it isn’t free market. You can find some on a smaller scale and black market or barter is probably the closest you can get to free market. Money buys influence which translates into power. If the company or industry is large enough they will have access to the rule makers more then any little guy. It has always been this way. I am not saying it is right but yes I am cynical enough to believe it will never change, Free Market is a nice thought but that is it. It doesn’t translate into the real business world. IMO

          • JoeMN

            The free market will be there, no matter how much cronyism, socialism,communism, or any other nightmare “ism” the dregs of humanity can dream up.

            When you make a purchase, do you still desire the best value for your earned dollar ?

            No matter what big corporation manufactured it ?
            That’s your desire for a free market at work

        • borborygmi45

          Look at the story above. That is the face of business at least big business. Is that an example of free market?

    • http://sayanythingblog.com Rob

      To be fair, Hamm doesn’t appear to be doing anything but lending his voice and influence to what he sees as the best path forward for himself personally.

      This is America, where we allow that sort of thing, but we can certainly question his motives.

      • Waski_the_Squirrel

        True. I think you stated in your post and I stated in my comment that Mr. Hamm is using government to profit himself. And, I think we both questioned his motives.

        I also infer that we both disagree with “crony capitalism”.

        I don’t go so far as Mr.Borborygmi45 because I believe the US is largely free market. But I think it’s important to point out that Mr. Hamm is trying to use big government. This is just as fair as pointing out that while I lean Libertarian, I also work for a public school district. Big business loves the free market as long as it works to that business’s advantage. There is a wealth of history of big business using big government to protect big business.

        • JoeMN

          The free market could be found even in the most repressive regimes where it is outright banned. (black market)
          Other than that, the free market is the ultimate source of revenue a government takes in, and also the subject of scorn and ridicule for this same government as it uses that revenue to enforce protections for friends of those in power.
          Once this is done, that particular sector no longer contributes, and in fact becomes a burden on society, leaving what’s left of the free market weaker and more vulnerable to exploitation.
          The irony is that as we watch “big oil” come under massive assault, keep in mind that they are still a net tax contributor.
          Meanwhile, as the truly free market becomes less and less distinguishable, this cronyism that takes it’s place becomes the description of free market capitalism.
          So what’s left ?
          We know the leftist pipe dream of collectivism is doomed to fail.
          And we know that those who profit from the printing press, from direct subsidy, from trade protectionism, from regulation will continue with the “all is clear” message until the entire ponzi crashes to the ground.

  • awfulorv

    I warn you, don’t play poker with this man, he has that look about him…

  • mickey_moussaoui

    Interesting photograph of this CEO. The juxtaposition, the eyes, the lighting, all well thought out.
    I would not mess with this guy. Give him what ever he wants.

  • borborygmi45

    The face of capitalism looking at you.

  • borborygmi45

    “This may come as a surprise to some, but it’s worth remembering that no so very long ago Hamm was an opponent of the Keystone pipeline, even going so far as to form a lobbying group in 2009 to oppose the building of the pipeline. ”We basically stopped Keystone at the border,” Hamm said in an interview with Reuters at the time explaining how his group helped block permits for the pipeline” Yet all we have heard is “It’s Obamas Fault, Its Obamas Fault” ONe of you own………welcome to the business world boys

    • http://sayanythingblog.com Rob

      Well it is Obama’s fault. With a stroke of his pen the project could move forward. Hamm, whatever we may think of his motives, can only speak and lobby.

  • kevindf

    He doesn’t want to further enrich his soon to be ex-wife.

  • WOOF

    Who will take up arms to insure Canadian tar sands access across Americas heartland on their way to tax free refinement for South American consumers?

  • Jonesy

    The Keystone pipeline would not be good for many energy consumers as it would result in an increase in fuel prices throughout the midwest. If you want to support the pipeline because you support free markets then fine, I understand that. But don’t lie and tell people it’ll be the best thing for energy consumers.

    • http://sayanythingblog.com Rob

      The Keystone pipeline would not be good for many energy consumers as it would result in an increase in fuel prices throughout the midwest. If you want to support the pipeline because you support free markets then fine, I understand that. But don’t lie and tell people it’ll be the best thing for energy consumers.

      Free markets are always the best thing for consumers.

      • Jonesy

        As a consumer, I don’t believe the best thing for me is paying more money.

        • http://sayanythingblog.com Rob

          As a consumer, you shouldn’t want government policy creating artificial price points.

          And I reject the premise that the Keystone pipeline will increase midwest gas prices.

          • sbark

            From AT….Philip Verleger, a well-known oil market economist, clearly agrees with my analysis. His view is that “US farmers who spent $12.4 billion on fuel in 2009 could see those costs rise to $15 billion or higher if the [Keystone XL] pipeline goes through, he projects. At least $500 million of the added cost ‘would come from the Canadian market manipulation,’ he wrote. ‘Millions of Americans will spend 10 to 20 cents more per gallon for gasoline and diesel fuel as tribute to our ‘friendly’ neighbors to the north,’ the highly respected Dr. Verleger wrote. ‘The Keystone XL pipeline will move production from Canadian oil sands to a deepwater port from where it can be exported.'”

            there is strong evidence of at least some periodic regional gas price savings in the U.S. due to the WCS discount over the past few years. If the WCS discount is removed because of Keystone XL’s construction, gas prices in some regions of the U.S. will likely be higher than would otherwise have been the case if the pipeline was not built.

            …….Just making the new refineries and Mandan bid the extra 20.00 a barrel up to the present 109/ barrel WTC prices is a 18% raise in price to those refineries…..

  • Harold Hamm fan
Top