America's unemployment rate stands at 8.5 percent, President
Obama cares about job creation, it's an election year, and it's the week before
the State of the Union address.
What an ideal time for the president to approve
construction of the Keystone XL pipeline, the proposed 1,711-mile, 36-inch steel
tube that would carry crude from the oil-rich Lake Athabasca region of Canada to
the Gulf Coast for refining.
Keystone would provide additional North American energy
for U.S. markets, an estimated 20,000 jobs, and boost U.S.-Canadian relations.
And imagine Obama's photo-op with Sen. Jon Tester, D-Mont., up for re-election
in November. Call it a win-win-win-win.
Instead, Obama's refusal to approve Keystone is a gift
to Republicans that will keep on giving throughout this campaign
On Wednesday, Obama said, "I'm disappointed that
Republicans in Congress forced this decision, but it does not change my
administration's commitment to American-made energy that creates jobs and
reduces our dependence on oil."
Except the commitment now seems a little
wobbly. Pipeline approval has been pending since September 2008,
when TransCanada Pipelines Ltd. applied for permission to build it. Because
1,384 miles were to be built in the United States, the State Department reviewed
Although the State Department gave Keystone a positive
environmental assessment last August, in November it announced that approval
would be delayed until the first quarter of 2013, pending the study of
Nebraska objected that the pipeline would cross its
Ogallala Aquifer. But Nebraska cannot prevent authorization of the pipeline, and
Nebraska is now working with TransCanada on a different route. As a condition for extending payroll tax cuts, Congress
required the State Department to speed up its decision on Keystone, and deliver
a verdict by mid-February.
Some believe that Obama has outmaneuvered the
Republicans by issuing a negative decision on Keystone. But the real losers,
after the unemployed who lose potential jobs, are Democrats whose campaigns will
be hurt by the rejection of Keystone.
The pipeline is estimated to provide $99 million in
revenues to local governments, $486 million to state governments and about $5.3
billion in future cumulative property taxes, according a TransCanada study. The
federal government's share in tax revenue, assuming a rate of 15 percent, would
be about $1.44 billion. Some union leaders are criticizing the White House for
the decision. Terry O'Sullivan, president of the Laborers' International Union
of North America, said, "Once again the president has sided with
environmentalists instead of blue-collar construction workers -- even though
environmental concerns were more than adequately addressed. Blue-collar
construction workers across the U.S. will not forget this." Other unions, such as the Communications Workers of
America, the United Auto Workers, the Transport Workers Union, the United
Steelworkers Union, and the Service Employees International Union, whose workers
would not benefit as much from Keystone's jobs, are following the party line and
joining environmentalists to support the president.
Obama's refusal to allow Keystone to proceed is
comparable to the National Labor Relations Board's attempt to block Boeing from
using its new plant in North Charleston, S.C., where it is employing thousands
of workers to make new Dreamliner planes. In both cases, the federal government
is standing against domestic employment in individual states.
More is at stake than jobs generated by Keystone. The
Gulf of Mexico refineries, America's single largest concentration of
petrochemical facilities, will need future supplies of oil to continue operating
at current levels.
Much of the heavy oil processed in the Gulf now comes
from Mexico and Venezuela, whose export volumes have been dwindling.
In 2013, either a Republican or Democratic president
will approve Keystone. But why wait until 2013?