Last Wednesday, the Obama administration officially denied approval of the Keystone XL pipeline. A rider included by the GOP in the payroll tax plan President Obama signed last month required the Administration to decide on the pipeline within a 60-day window.
In rejecting the pipeline, the White House said “imposing an arbitrary 60-day deadline on this process would make it virtually impossible for an adequate review [of the pipeline] to take place.”
House Speaker John Boehner criticized the decision saying “President Obama is destroying tens of thousands of American jobs and shipping American energy security to the Chinese. [There’s] no other way to put it: the President is selling out American jobs for politics.”
What do you think of the Administration’s decision? Of the decision’s justification? How important is the Keystone XL pipeline, or projects like it, to the future of U.S. energy? What economic or national security implications do you see this decision having?
The Alberta oil sands contain about 2 trillion barrels of oil, of which at least 170 billion barrels are recoverable at current prices. It may be the world’s largest oil reserve, even surpassing Saudi Arabia. It already is the biggest source of Canadian oil production and Canadian oil exports to the U.S. The Keystone XL pipeline is likely to be the first in a series of proposed pipeline expansions to use this resource to displace OPEC oil imports to the U.S. as well as supply growing Asian markets for oil.
While the oil sands provide a secure source of oil supply for U.S. and world oil markets, the difficult long-term question becomes should this resource be developed on a massive scale when oil consumption is a major cause of global warming and oil sands production itself emits more greenhouse gases than conventional oil production. This is a far bigger question than the route of the proposed Keystone pipeline because ways would eventually be found to transport the oil to other markets even if this route was deemed inappropriate.
Global warming is a global issue related to global consumption of oil. The United States and countries around the world need to begin the process of reducing oil consumption and migrating to clean, efficient alternatives to oil-based transportation to prevent the huge costs of global climate change. The best way for the U.S. to reduce OPEC oil dependency is to create clean-energy infrastructure to replace oil consumption rather than create more Canadian oil sands pipeline infrastructure.
TransCanada PipeLines, who is proposing the Keystone XL pipeline, is the major natural gas pipeline company in Canada. The focus of the U.S. government, Canadian government, and TransCanada PipeLines should be on supplying more cleaner-burning natural gas to U.S. markets to replace OPEC oil. The natural gas that would be used in expanded oil sands production could also be diverted for this purpose.
The news media have reported that TransCanada PipeLines lobbyists may have had undue influence with U.S. State Department officials in promoting this project. The decision on the Keystone XL pipeline is in a bigger sense a keystone decision on the future direction of U.S. energy policy, and should be evaluated on what is in the best long-term interests of the country and not by special interest lobbying.