Pipeline Politics Derails More than Jobs
By killing the Keystone project, Obama has delivered a blow to the entire economy.
January 28, 2012 - 12:00 am
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.
One of the major complaints of environmentalists has been increased carbon emissions because of the pipeline, a complaint Dougher says is unfounded. She says there have been two environmental impact supplementary reviews and 14 federal agencies concluded carbon emissions would be greater if the Canadians build the pipeline to the west and put the oil on tankers to China, which Canada has said it will do if the pipeline is not ultimately approved.
Moreover, from the national interest standpoint, Canada is our single largest trading partner. For every dollar we spend in Canada, they spend about $.90 here. For every dollar we spend in the Mideast, they spend $.33 here. It’s hard to comprehend that doing more business with a country that wants to do business with us is “not in the national interest.”
U.S. Rep. Lynn Jenkins (R-Kansas) agrees that the entire debacle was political from start to finish:
President Obama’s decision to block the Keystone Pipeline is simply another example of this White House putting election politics before economic recovery. While the President’s friends in the environmental lobby may be cheering, the tens of thousands of hard working Americans who won’t have a job because of this decision are certainly not.
The Keystone Pipeline is an environmentally safe project that has adopted safety standards which go far beyond anything required of any pipeline in existence today. Additionally, the Keystone Pipeline will help lessen our dependence on Middle Eastern oil, while creating 20,000 direct American jobs and over 100,000 indirect American jobs. The President has had more than three years to make a decision on the pipeline as it has been studied and developed, and blaming his decision on a 60 day deadline put in place after three years of study is nothing but a political farce. We should move forward on final construction of this immensely important project immediately. But as the President told his Jobs council … “Obviously this is an election year,” so we clearly shouldn’t expect much from the Obama White House.
Glendening also noted this would make it more difficult to secure future investments:
It dampens future projects when you have a runaway EPA or a State Department who look to the EPA for guidance.
Dougher also noted the oil companies have invested nearly double what the government has in searching for renewable sources of energy, and nearly as much as all the other industries in the U.S. have combined. Exxon Mobil, for instance, has poured more than half a billion dollars into making fuel from algae.
In the end Obama has himself in a cleft stick. It’s an election year, and he doesn’t need to be seen as killing jobs. But the last thing he can afford, given his approval numbers, is to lose the support of the radical environmental movement which helped get him elected.