Keystone XL rejected: Tar sands pipeline once thought "too big to fail" has fallen
Posted January 18, 2012
The great pipeline showdown has backfired on the Republican leadership, just as we predicted it would back in December when they forced a 60-day time-frame for approving or rejecting the pipeline on the President during the tax extension negotiations. The President made it clear then, through Administration sources, that he would have no choice but to reject it. And that is just what he did today.
The President has put his agreement with the American people first. In delaying a decision on the pipeline in December, he made it clear that he would not put the American public at risk in approving a pipeline that could spill into one of the country’s most important freshwater aquifers. He directed the State Department, the State of Nebraska and the pipeline company, TransCanada, to re-route the pipeline away from the sensitive Sandhills region and Ogallala aquifer, the source of drinking and irrigation water not just for Nebraska but for 7 other states. And he committed the Administration to do a more in depth study of the impacts of the pipeline.
There is no small irony in this outcome. What drove the agreement to re-route was a dedicated group of farmers and ranchers that wouldn’t let TransCanada despoil their land and a critical water source for all Nebraskans. As Jane Kleeb, an organizer at Bold Nebraska, said at a hearing here in Washington D.C. this fall, “We are the Sandhills lovers, we are the Ogallala aquifer lovers. We are not asking you to deny this permit, we are begging you”. Ultimately, it was the Republican Governor in Nebraska that insisted on a new pipeline route. But the 60-day demand imposed by his colleagues in Congress would have forced the President to make a decision before that new route was identified. How could the President make a decision on a pipeline that doesn’t even have a route?
But logic is in scarce supply on this issue. The Republican leadership in Congress has made this a conservative cause célèbre, launching a time-clock that would take us backwards into a dirty world of 19th century energy. And even though the pipeline company itself, as recently as today, admitted that there would not be more than 6,000 jobs on any given day, that has not stopped the Republican leadership and their friends in the oil industry from claiming that there would be hundreds of thousands of jobs created. It’s hard to imagine that using the jobs issue – a cynical ploy when so many are desperate for work - is really about anything more than getting Big Oil their pipeline. The fact is that TransCanada has admitted that permanent jobs would be in the hundreds and the State Department estimate was only twenty – yes, twenty – permanent jobs. The only independent report, by Cornell University Global Labor Institute – found that the pipeline would actually be a job killer, stifling clean energy jobs which are growing faster than any other segment of our economy.
The President said it best when he asked if Nebraskans or any other Americans would really trade off the health of their kids for a few thousand jobs. In an interview with a Nebraska TV station, he said, “Folks in Nebraska, like folks all across the country, aren't going to say to themselves, 'We're going to take a few thousand jobs if it means our kids are potentially drinking water that would damage their health." My general attitude is, what's best for the American people? What's best for our economy both short and long term? But what’s best for the health of the American people? Because we don't want for example aquifers adversely affected. Folks in Nebraska obviously would be directly impacted and so we want to make sure we're taking the long view on these issues."
The other argument that is short on logic is that the pipeline is essential to our energy security. If you believe that tar sands oil can change our reliance on oil from the Middle East or other unsavory regions, think again. In a piece in the Washington Post today, Michael Levi of the Foreign Relations Council demolishes that argument. The fact is that the pipeline would divert oil from the Midwest, at least for the next decade or so, because Canada does not produce enough oil to fill all the pipeline capacity coming into the country from Canada. The effect of that would be to put millions of dollars into the pockets of the major oil companies and Canadians at the expense of of Midwesterners.
Just last week, there was a piece on Global TV Canada that made the case pretty clearly. “Right now, Alberta bitumen sells into the U.S. Midwest at $10 to $20 a barrel less than the world price for oil, partly because a glut of oil there is pushing the price down. That price disparity is costing Canada's economy billions, and government's huge amounts in lost royalties. A new study from the University of Calgary says Canada would gain $131 billion in gross domestic product from 2016 to 2030 if Alberta crude gets sold to new markets at the world price. That underscores the importance of pipeline expansion.”
What this is really about is not energy security, but profits. The only way to make progress on achieving energy security over the long run is to reduce our dependence on oil, a point that Retired Brigadier General Steven Anderson made today in the release of NRDC’s new report, “Keystone XL: Undermining U.S. Energy Security and Sending Tar Sands Overseas”.
We’ll see a lot more of the jobs and security arguments in the days ahead. I am sure Majority Leader Boehner will find another Keystone XL countdown to set the clock to. Maybe they’ll try to ram an approval through on the next tax extension. But today, we should thank the President for standing up to reason, for protecting the American public by letting science and good analysis prevail, and saying clearly to the Republicans and oil bullies, I won’t bow to your pressure.
An energy project once thought “too big to fail” has fallen. That doesn’t happen every day.
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