Arctic Oil Spill Kills Santa Claus

Bad news, kids. A massive oil spill just devastated the North Pole. And it’s all Royal Dutch Shell’s fault.

So says Greenpeace in an apocalyptic ad that accuses the oil conglomerate of “polluting our kids’ imaginations” because of their partnership with Lego to make Shell-branded toys.

If you haven’t seen it, the video opens in an Arctic wonderland constructed entirely in Legos (à la The Lego Movie).

The sun is shining, Inuit are fishing, and polar bears are playing in the snow… until tragedy strikes.

One of Shell’s offshore rigs begins spilling oil—drowning everything and everyone in its path, even poor ol’ Santa.

It’s a gruesome scene, followed by a plea for the viewer to sign a petition asking Lego to cut its ties with Shell.

It makes you wonder: how did those evil oil barons at Shell manage to corrupt something as innocent and pure as Legos?

Well, there’s a problem here. As much as Greenpeace would like us to believe it, Legos aren’t made from recyclable fairy dust…

Legos are made out of oil.

Not to get too technical, but one of the key ingredients in the manufacture of ABS plastics is propylene, a petrochemical refined from crude oil. ABS plastics are used to make thousands of products, including the device you’re using to read this now… and Legos.

And who is a major supplier of propylene? You guessed it: Shell!

You have to marvel at the hypocrisy here.

Yet this is just another in a long line of campaigns out to make us feel guilty for consuming petroleum products. Extreme environmentalists must be among the angriest people on the planet. They just drowned Santa Claus in a sea of crude, for Pete’s sake!

They fixate on the negative with suffocating myopia. They never offer market solutions or policies for improving the environment—they only propose more regulations and controls for reducing our carbon footprint.

It almost sounds as though groups like Greenpeace want us to dramatically reduce our standard of living and trade in all the benefits of the Industrial Revolution for living in communal Paleolithic huts.

Like most special interest groups in America right now, these environmentalists have a voice in Washington. (The Anti-Shell Lego video has nearly 5 million views already.) Any liberal candidate seeking election must pander to the green movement. Case in point—here’s another Greenpeace directive:

“Tell President Obama to reject the Keystone XL pipeline.”

The Keystone XL project is front-page news because environmentalists have turned it into the defining issue of the movement… almost a referendum on climate change. The reason is, the proposed pipeline crosses an international border and requires approval from the State Department and President Obama. That makes it a national issue… a newsworthy cause that suddenly makes bloggers in Brooklyn care about a pipeline being built in Montana.

The flurry of petitions and protests are a boon to environmental groups. In fact, the Sierra Club raised over $1 million in just six weeks for an anti-pipeline rally.

Yet, even though he’s the “environmental president,” Obama’s in a sticky spot here. He knows the importance of the pipeline. But if he approves it, he risks alienating an important part of his base at a time when his party is barely winning elections.

So, like any seasoned waffler, he doesn’t veto the pipeline outright—he merely delays approval. Meanwhile, we have a North American oil boom underway, and suppliers need to get their oil to refiners.

Enter the rise of transporting oil via rail. Volumes of oil being shipped by rail are at a record high—and so are accidents.

The most catastrophic to date was in Lac Mégantic, Quebec, where parts of the town were leveled and 47 people lost their lives. Despite this disaster, oil trains must roll on in the absence of pipelines if producers are to meet demand.

Accidents are becoming more frequent. There were four derailments in six months in North Dakota alone. And just this past April, an oil train burst into flames in Lynchburg, VA.

So, by environmentalists holding up the build-out of the Keystone XL that would stretch through rural, unpopulated areas, they’re essentially making it mandatory for more 75-car-long oil trains to rumble through cities and towns, just inches from Main Street.

Again, it’s absurd… even more so when you compare the safety record of pipelines to trains.

Of the 474.6 billion gallons of crude and petroleum products shipped by pipe in 2012, just 0.0005% were spilled. Number of casualties: 0. Among the safest is none other than the existing Keystone pipeline.

If you weren’t aware, Keystone XL represents Phase 4 of the project, an “express line” extension. Phase 1 of the Keystone pipeline has been operating since 2010 and has safely moved over 600 million barrels of oil through the Western states without incident.

Pipelines are the fastest, safest way to get oil to market. And President Obama knows this. Before the Keystone XL debacle, he made it a campaign promise to build more pipelines. And say what you will about the man, aside from the XL project, he’s quietly kept that promise. In fact, he greenlighted an 800-mile-long pipeline that’s 17% larger in diameter than Keystone XL and runs right through some of the most sensitive ecosystems on the planet.

On this, he’s not blowing smoke. Obama’s personal attorney and former White House counsel is on the case, representing the company building it. Yet there hasn’t been a peep from Greenpeace and company on the issue. Except for being buried deep in the business section, it’s barely been mentioned in the press.

That’s why we call it:

Obama’s Secret Pipeline.

The reason this pipeline was rubberstamped—and why protests have been undetectable—is that it’s all part of the president’s green-energy agenda. You see, this pipeline will be shipping natural gas, not oil.

Though still a fossil fuel, in the eyes of both environmentalists and the White House gas is “green” because it’s efficient, burns cleaner than oil, and isn’t prone to damaging spills.

A federal blessing on this pipeline backed by the president’s former lawyer is good news, but what makes it exciting for investors right now is the deal that was just brokered to build it. As you may have guessed, this massive pipeline is being built in Alaska; it links the North Slope—a reserve of 35 trillion cubic feet of conventional natural gas—to an off-load point near Anchorage.

The man at the center of the project, Alaska Governor Sean Parnell, virtually guarantees a successful completion of the pipeline. Governor Parnell is a former employee and lobbyist for ConocoPhillips, a major producer of gas in the North Slope. (His ties to the industry run so deep that the Alaska Dispatch News called him the “Manchurian Governor.”)

Parnell brought ConocoPhillips to the table along with BP and ExxonMobil to create a key partnership with the State of Alaska to transport 500 million cubic feet of gas a day through this pipeline. Then, as a savvy former industry insider, the governor cut an amazing deal for the state. He signed into law a bill that requires Alaska to be paid “in kind”—meaning the state will be taking its share of the royalty and tax revenue in the form of natural gas, not cash.

This gives Alaska a 25% stake in the project, sufficient capacity for the state to ship part of its own share of the gas. (The goal is for Alaskans to fulfill their needs first, then export the surplus.) It’s the first time a US state has participated in a deal of this kind.

But what does the state know about gas infrastructure and transportation? They’re bureaucrats, not engineers. That’s why the bill further provides for the state to separately negotiate a deal with the pipeline builder to invest in the state’s 25% share of the proposed pipeline project. This company provides up to $8 billion in funding to finance Alaska’s part of the construction of the project; and once it’s built, it becomes the sole transporter of the state’s share of the North Slope gas reserves, collecting fees in the process for decades to come.

This is truly a sweetheart deal for this company. And it’s just one of the many reasons why we recently recommended it in Casey Energy Dividends, our newsletter dedicated to finding safe, high-yield opportunities.

You see, this new Alaskan pipeline, Obama’s Secret Pipeline, is another in a long line of cash-generating projects for this pipeline company. It already operates 35,500 miles of pipelines and 407 billion cubic feet of natural gas storage. It’s a well-established firm with a long track record of rewarding shareholders with dividends. And even though the Alaskan deal gives it more value, shares are still cheap, making now the best time to get in.