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Pipeline Politics Derails More than Jobs

By killing the Keystone project, Obama has delivered a blow to the entire economy.

by
Patrick Richardson

Bio

January 28, 2012 - 12:00 am
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The death of the Keystone XL pipeline was a blow to economic development in every state through which it would have run and has cost by, some estimates, 20,000 jobs.

What many people don’t realize is that portions of the pipeline have been done for years.

The phase 1 section, which runs through Kansas, went online in 2010. According to testimony from Jeff Glendening, vice president of political affairs for the Kansas Chamber of Commerce, before the State Department, it cost nearly a half billion dollars and generated millions in revenue for the state:

The Kansas sections of the Keystone pipeline have been completed, and its construction has been extremely beneficial to the state’s economy in a time when it was sorely needed. During the construction of the first two phases of Keystone in Kansas, it is estimated that TransCanada spent approximately $481 million in our state.  This generated significant job creation and increased sales and use tax receipts by $8 million, all of which greatly benefited Kansans.

None of this mattered to the Obama administration, which killed the pipeline earlier this month.

President Barack Obama had been forced, as part of a deal to extend a payroll tax cut, to decide within 60 days whether or not the pipeline would be in the national interest or not.

According to Rayola Dougher, senior economic affairs advisor of American Petroleum Institute, he failed to do so:

Obama was just being asked to decide if this pipeline was in the national interest or not. He decided to punt on that.

As Redstate.com reported on Jan. 18 when the bill was killed, the State Department actually made the decision so Obama wouldn’t have to:

Today, the Department of State recommended to President Obama that the presidential permit for the proposed Keystone XL Pipeline be denied and, that at this time, the TransCanada Keystone XL Pipeline be determined not to serve the national interest. The President concurred with the Department’s recommendation, which was predicated on the fact that the Department does not have sufficient time to obtain the information necessary to assess whether the project, in its current state, is in the national interest. Since 2008, the Department has been conducting a transparent, thorough, and rigorous review of TransCanada’s permit application for the proposed Keystone XL Pipeline project.

Apparently three years wasn’t long enough to make the decision, but the idea that it was not in the national interest was ludicrous to say the least.

According to Dougher, the pipeline, if it’s ever completed, will reduce American dependence on Mideast oil by about half:

This kind of delay is just unacceptable; it appears to be entirely politically motivated. (It would move 830,000 barrels a day, about half what we get from the Persian Gulf.)

Dougher says that kind of reduction of dependence and increase in supply from stable countries would be beneficial to the entire world economy. Not only that, but about 25 percent of the pipeline was dedicated to moving U.S. oil to market — oil that’s currently stalled because it can’t get to where it needs to go. The Kansas sections of the pipeline are essentially useless because shippers are forced to break bulk and put the oil on tank trucks at the end of the pipeline.

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