The U.S. State Department today announced that it had recommended rejecting the Keystone XL oil pipeline and President Barack Obama concurred, so the project is dead for the time being.
TransCanada Corp., the company that wants to build the $7 billion pipeline to carry bitumen (a heavy oil-like substance) from the tar sands of Canada to U.S. oil refineries along the Gulf of Mexico, says it will file a new permit application. So today’s rejection may only have succeeded in delaying the decision until after the 2012 presidential election. At that point it could be someone else’s problem. Either that, or President Obama and Secretary of State Hillary Clinton will be forced to wrestle with the controversial issue all over again.
Mixed Reviews for Obama’s Pipeline Decision
Reaction to Obama’s decision to deny the Keystone XL pipeline permit has been divided.
Environmentalists are calling the decision a victory for the environment and the American people. Republicans in Congress and on the presidential campaign trail are calling it a job-killing economic disaster and a betrayal of hardworking Americans. Meanwhile, media editorial boards have given the decision mixed reviews.
Activists’ Reaction to Pipeline Permit Rejection
The comments by Erich Pica, president of Friends of the Earth, are typical of what environmental groups had to say in response to President Obama’s Keystone XL pipeline decision:
“Today’s announcement is a welcome example of President Obama following through on his promise that corporate polluter lobbyists will no longer set the agenda in Washington. The Keystone XL pipeline would have been dirty at both ends, dangerous in between, and certainly not in our national interest. Big Oil and its bought-and-paid-for confederates in Congress couldn’t drown this dirty reality despite all of their threats and bullying.
“This defeat for Big Oil is a huge victory for the health and safety of Americans. It belongs to the indigenous communities who first sounded the alarm on the dangers of tar sands extraction, to the Nebraskan farmers and Texan ranchers who withstood TransCanada's bullying in the name of their land and livelihoods, to the activists from across the country who were arrested on the president’s doorstep, and to all of us fighting for a safe climate and justice-fueled future.
“Allowing expansion of the destructive tar sands oil industry is not and will never be in our nation’s interest. We will remain vigilant to ensure that all of Big Oil’s attempts to wring profits from the tar sands at the public’s expense are defeated -- and that better, clean alternatives are deployed.”
GOP Response to Keystone Pipeline Decision
Mitt Romney, presidential contender and former Massachusetts governor, criticized Obama’s decision just as strongly as environmentalists praised it. His comments also reinforced that all the Republican presidential candidates have vowed to use the Keystone XL pipeline decision as a campaign issue, to portray the Obama administration as an enemy of business who is controlled by extreme environmentalists. Romney said:
“President Obama’s decision to reject the Keystone XL crude oil pipeline is as shocking as it is revealing. If Americans want to understand why unemployment in the United States has been stuck above 8 percent for the longest stretch since the Great Depression, decisions like this one are the place to begin.
“By declaring that the Keystone pipeline is not in the ‘national interest,’ the president demonstrates a lack of seriousness about bringing down unemployment, restoring economic growth and achieving energy independence.”
Media Reaction to Pipeline Decision
Some editorial boards were almost as critical of President Obama’s decision as Romney and other Republicans. The Washington Post was one of the first to weigh in after the White House announced that Obama had denied the pipeline permit. Here’s an excerpt:
“Without the pipeline, Canada would still export its bitumen — with long-term trends in the global market, it’s far too valuable to keep in the ground — but it would go to China. And, as a State Department report found, U.S. refineries would still import low-quality crude — just from the Middle East. Stopping the pipeline, then, wouldn’t do anything to reduce global warming, but it would almost certainly require more oil to be transported across oceans in tankers.
“Environmentalists and Nebraska politicians say that the route TransCanada proposed might threaten the state’s ecologically sensitive Sand Hills region. But TransCanada has been willing to tweak the route, in consultation with Nebraska officials, even though a government analysis last year concluded that the original one would have “limited adverse environmental impacts.” Surely the Obama administration didn’t have to declare the whole project contrary to the national interest — that’s the standard State was supposed to apply — and force the company to start all over again.
“Environmentalists go on to argue that some of the fuel U.S. refineries produce from Canada’s bitumen might be exported elsewhere. But even if that’s true, why force those refineries to obtain their crude from farther away? Anti-Keystone activists insist that building the pipeline will raise gas prices in the Midwest. But shouldn’t environmentalists want that? Finally, pipeline skeptics dispute the estimates of the number of jobs that the project would create. But, clearly, constructing the pipeline would still result in job gains during a sluggish economic recovery.
“There are far fairer, far more rational ways to discourage oil use in America, the first of which is establishing higher gasoline taxes. Environmentalists should fight for policies that might actually do substantial good instead of tilting against Keystone XL, and President Obama should have the courage to say so.”
Cutting Through the Noise
The Washington Post makes a good point about higher gasoline taxes being a “rational [way] to discourage oil use in America,” but that’s like suggesting we address overpopulation by eating our own children. The chances of this or any Congress in the foreseeable future approving a significant increase in gasoline taxes to the point where consumers would think twice before filling their tanks and taking to the open road is roughly equivalent to the world’s industrialized nations embracing infanticide.
Some media and Republicans make it sound as though the only people opposed to the Keystone XL pipeline are wild-eyed environmental extremists, who are too busy coddling spotted owls and spiking redwoods to take a rational view of anything, much less the economy.
Although it’s certainly true that thousands of protesters, led by environmental activist and author Bill McKibben and joined by Hollywood celebrities such as Mark Ruffalo and Daryl Hannah, surrounded the White House last fall to protest the Keystone XL pipeline plan—and were arrested for their trouble—but they weren’t alone in their opposition. The pipeline plan was also opposed by many states and communities along the proposed route, not to mention millions of other Americans and Canadians. It really isn’t a simple us-versus-them equation.
The Truth about Jobs and the Pipeline Project
The Post also declares essentially that some jobs are better than none, and offers that as a reason why President Obama should have approved the Keystone XL pipeline permit, but estimates for the number of jobs the pipeline would create vary wildly. Many of those jobs would be temporary, but the potential health and environmental risks from the pipeline would continue for as long as the pipeline continued to transport bitumen from Canada to the Gulf of Mexico.
One reason for the discrepancy in the job numbers is that TransCanada, the pipeline developer, counts jobs on a “one person, one year” basis. In other words, if one person held the same job for two years, it would count as two jobs not one. Another problem with the estimates is that the jobs the pipeline would create are often cited as high-wage, shovel-ready jobs. In fact, many of those jobs would be “spinoff jobs” such as hairdressers, dancers and bartenders. And finally, the estimates are hard to pin down and firm up because no one really knows how many jobs the pipeline project would create.
There’s another interesting angle to the jobs issue and the Keystone XL pipeline. Despite the general assumption, and the statements made by many politicians who support the project, labor unions are divided over whether the pipeline should be built.
House Speaker John Boehner has said many times that the AFL-CIO supports the pipeline, but AFL-CIO President Richard Trumka recently clarified his organization’s stance on the pipeline issue.
“The AFL-CIO has not taken a position on the Keystone pipeline—unions don't agree among ourselves,” Trumka said. “But we cannot have a trust building conversation about it unless opponents of the Pipeline recognize that construction jobs are real jobs, good jobs, and supporters of the Pipeline recognize that tar sands oil raises real issues in terms of climate change.”
Not surprisingly, unions such as the Building Trades Council, whose members would receive many of the temporary construction jobs related to building the pipeline, tend to favor the project. Some others not so much. Consider, for example, what the Transport Workers Union (TWU) and the Amalgamated Transit Union (ATU) said in a joint statement last year:
“We need jobs, but not ones based on increasing our reliance on Tar Sands oil. There is no shortage of water and sewage pipelines that need to be fixed or replaced, bridges and tunnels that are in need of emergency repair, transportation infrastructure that needs to be renewed and developed. Many jobs could also be created in energy conservation, upgrading the grid, maintaining and expanding public transportation—jobs that can help us reduce air pollution, greenhouse gas emissions, and improve energy efficiency.”
The Bottom Line
Otto von Bismarck, the first chancellor of Germany, is often credited with saying, “Politics is the art of the possible.” It’s not possible for President Obama to magically end unemployment in America, persuade Congress to raise gasoline taxes, end U.S. dependence on oil overnight, or get Congress and the rest of the world to agree to the collective and independent actions needed to lower greenhouse gas emissions, reduce global warming and slow climate change. What is possible, what he can do, is reject the Keystone XL pipeline permit application and force a deeper and more thoughtful analysis of the project’s potential costs and benefits.
That’s exactly what he did this afternoon.
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