No More Keystone
Excuses
Will Obama side with science and jobs, or with
green religionists?
From the Wall Street
Journal
President Obama's
spokesmen claim that cutting $43 billion out of a $3.8 trillion federal budget
this year will be an economic disaster, though investors seem unconcerned. But
if Mr. Obama wants shovel-ready spending stimulus today, why doesn't he finally
approve the Keystone XL pipeline? It won't cost taxpayers a dime.
On Friday the pipeline
from Canada through six U.S. states to the Gulf Coast received another boost
when a State Department study found there would be no significant damage to the
environment. This follows Nebraska Governor Dave Heineman's endorsement in
January of a revised pipeline route that now skirts around the Sand Hills
region of his state. All of which means the White House has run out of excuses
to keep delaying approval of a $5.3 billion private investment that would
provide some 16,000 direct jobs and more downstream.
The State Department
study, the fourth such U.S. review in four years, found once again that the
pipeline wouldn't make much difference to climate change. The Alberta tar sands
are the world's third largest reservoir of oil, and Canada is going to develop
them one way or another.
All told the oil sands
contribute a mere 0.01% of global carbon emissions, and if that sort of thing
bothers you, Canada is offsetting that with carbon-reduction policies
elsewhere. State's report concludes that the pipeline would result in "no
substantial change in global greenhouse gas emissions."
If the Alberta oil
doesn't flow south to America via the Keystone XL, it will flow west to China
via other pipelines or rail. It will also flow to the Gulf Coast by other
means, including pipelines and rail to East Coast ports, and then via tankers
in the Atlantic and around Florida. Keystone XL will have a smaller
"carbon footprint" than these alternatives.
As for the danger of
spills, the high-tech pipeline will be buried underground and contain valves
that allow for rapid detection and shutoff. The environmental risk is arguably
greater on a tanker. Even if the oil sands were shut down entirely, Gulf Coast
refineries would merely use the similarly heavy oil from Venezuela, also
shipped via tankers.
Thus the issue is not whether
the oil will flow but how much Americans will benefit. A rule of thumb is that
for every dollar of imported foreign oil, North America receives about 10 cents
of the economic benefit. The Venezuelans, Saudis and others get the rest. The
benefit from oil produced in North America is roughly 80-90 cents of each $1.
This includes the cost of producing and transporting the oil, and the ancillary
jobs and sales that flow from it. The Keystone XL has also reserved space for
about 250,000 barrels a day of oil produced in the U.S., which means a new and
environmentally safer outlet for oil from the booming Bakken fields of North
Dakota.
All of this was known
two years ago, but Mr. Obama opposed the project in 2011 to appease the Sierra
Club and his other green financial donors while running for re-election. The
pipeline's builder, TransCanada, applied again with a new route, and now the
President faces another choice.
His labor supporters
favor the pipeline, which will provide thousands of union jobs. His green
supporters don't much care about jobs because they are already rich. They are
also impervious to evidence like that in the State Department report because
global warming is their religion.
"Mother Nature
filed her comments last year—the hottest year in American history; the top
climate scientists in the U.S. have already chimed in," said Bill McKibben
in reaction to the report. He's the leader of the anti-Keystone forces who was
arrested last month after chaining himself to the White House gate.
The opponents' goal is
to shut down all fossil-fuel production, one step at a time. They're on the way
to destroying the U.S. coal industry, and the Sierra Club has made shale-gas
drilling its next political target. They want the world economy to run on
windmills and solar panels. And these are the folks who denounce Republicans
for ignoring science.
Meanwhile, Mr. Obama
and Secretary of State John Kerry need to think about the impact of rejection
on U.S.-Canada relations. One of the better economic stories of the last 50
years has been the integration of the North American economy, including the free
flow of goods, investment and to some extent people. Rejection of the pipeline
would be an insult to Canada and a step back from that integration.
The larger issue is
whether the U.S. wants to continue to be considered a serious economic nation
with rising living standards and a modern energy supply. If Mr. Obama turns
down Keystone XL, the Chinese will be laughing at us as they buy Canadian oil
and build their economic power, while America adapts to the Sierra Club's
preferred future of the world as Walden Pond.
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