January 7, 2015

Approve Keystone XL; Make the Senate Work

  • The Obama State Department concluded the Keystone XL pipeline would have no significant environmental impact and would support more than 42,000 jobs.

  • The Obama administration has delayed the pipeline for more than six years – and has misled Americans with false claims about the project.

  • The new Republican majority calls on the administration to put the political games aside and work to support the Keystone XL pipeline – a bipartisan infrastructure and jobs bill.  

Time to stop blocking American jobs

Over the past six years, the Obama administration and other liberal Democrats transformed the Keystone XL pipeline from a routine energy infrastructure project into the poster child for their opposition to energy development. They sided with radical environmentalists and wealthy donors over a bipartisan majority of Americans who welcomed the project’s economic and strategic opportunities.

According to the Obama State Department, the Keystone XL pipeline will support 42,100 American jobs. These jobs span a variety of industries, not just temporary construction jobs.

42,000 jobs supported by Keystone XL

This month, the new Republican majority in the Senate will pass legislation approving the Keystone XL pipeline with a bipartisan supermajority of votes. In the process, we will resurrect the project’s original promise as an engine for good jobs, energy security, and economic growth; and reestablish the Senate as a functioning institution.

Yesterday, the White House said the president would veto the bill. This comes as no surprise, since he has bureaucratically filibustered the project for more than six years. A veto would represent another in a long line of White House policy choices that have placed economic security out of reach for too many American families.

Democrats downplay benefits

The Keystone XL pipeline would transport 830,000 barrels of oil per day to the Gulf Coast, including 730,000 from Canada and 100,000 from Montana and North Dakota. Last January, the State Department concluded for the fifth time in five years that the pipeline would have no significant environmental impact.

In addition to the jobs supported, the latest environmental review found that the pipeline would also generate millions of dollars in state and local revenues. Unlike some infrastructure projects, the pipeline does not require any taxpayer investment and only needs a simple cross-border permit to move forward.

Democrats have made numerous specious claims about the pipeline, in an attempt to mislead Americans about the project’s benefits:

Democrats have claimed that the pipeline won’t support many jobs.

  • According to a June 2011 Canadian Energy Research Institute report, the production of oil flowing through the pipeline could support 72,000 to 81,000 jobs in the U.S. each year from 2021 to 2035. Those jobs are in addition to the 42,100 jobs cited by the State Department. At least 2,400 American companies in 49 states already are involved in Canada’s oil sands development, the American Petroleum Institute says.
  • These job totals also do not include jobs from the refining of oil flowing through the pipeline that could be supported along the Gulf Coast.

Democrats claim these are mostly temporary jobs.

  • Their concern about the duration of these jobs is newfound. In 2009, Democrats eagerly touted 678,000 temporary construction jobs that the White House estimated the economic stimulus plan would create by the end of 2010. As it turns out, the construction industry lost 971,000 jobs by the end of 2010, according to the Bureau of Labor Statistics – and the cost of the stimulus package ballooned to $831 billion.
  • It is not a problem if construction jobs are temporary. By their nature they end when a project is complete. New projects must be built for workers to remain employed. Subjecting proposed projects to endless delay for political purposes generates needless market uncertainty and disincentivizes investment. Refusal to grant a simple regulatory permit is a sure-fire way to kill new projects. 

Democrats say the focus should be on transportation infrastructure jobs, not pipeline jobs.

  • The Keystone XL pipeline is a privately financed project that requires a simple permit, which can be issued immediately. Bridges, roads, and other transportation infrastructure get taxpayer funding through a transportation bill that must undergo a congressional authorization process. Americans have already waited more than six years to break ground on the pipeline – the nation’s largest shovel-ready project. They should not have to wait for Congress to approve a transportation bill too.
  • Pipeline jobs will not cannibalize transportation infrastructure jobs. In fact, the nature of these jobs is comparable. Both build projects that transport goods and use similar skill sets, like road building, steel working, and engineering. Washington does not have to choose between these jobs, it should embrace all of them. 

Democrats claim the pipeline will increase greenhouse gas emissions.

  • The State Department concluded in January 2014 that the project is “unlikely to significantly impact the rate of extraction in the oil sands or the continued demand for heavy crude oil at refineries in the United States.” So greenhouse gas emissions associated with these activities would remain unchanged.
  • Even without the pipeline, and with low oil prices, oil sands will continue to be developed. “The dominant drivers of oil sands development are more global than any single infrastructure project,” the State Department reported. “Oil sands production and investment could slow or accelerate depending on oil price trends, regulations, and technological developments, but the potential effects of those factors on the industry’s rate of expansion should not be conflated with the more limited effects of individual pipelines.” 
  • The State Department also reported that transmission of oil through the pipeline would reduce annual greenhouse gas emissions by 28 to 42 percent compared with alternative transportation options.

Democrats claim the pipeline will increase oil spills.

  • The State Department estimated the project would reduce the number of barrels of oil spilled per year compared with alternative transportation options.
  • Spills associated with the project that enter the environment are expected to be “rare and relatively small.”
  • The Keystone XL pipeline will include additional mitigation measures in the design, construction, and operation of the pipeline, including 59 special conditions recommended by the Pipeline and Hazardous Materials Safety Administration, and 36 additional mitigation measures.  

Democrats claim the pipeline will degrade air and water quality.

  • The State Department found that the project “would not be expected to cause or contribute to a violation of any federal, state, or local air quality standards.”
  • State also reported that potential oil spills from the pipeline would be “unlikely” to affect water quality in aquifers along the project’s route.

Democrats claim the pipeline will ship oil to world markets, not to the United States.

  • The State Department concluded: “As crude of foreign origin, Canadian crude is eligible for crude export license as long as it is not commingled with domestic crude. However, such an option appears unlikely to be economically justified for any significant durable trade given transport costs and market conditions.”
  • One reason is that “Gulf Coast refiners have a significant competitive advantage in processing it compared to foreign refiners because the foreign refiners would have to incur additional transportation charges to have the crude oil delivered from the Gulf Coast to their location.” Gulf Coast refineries have the ability to handle large amounts of Canadian crude, and with competitive pricing it is unlikely that much of the Canadian crude will be exported from the Gulf Coast.
  • The department summarized: “In short, while it is possible that some cargos of [Canadian] crude could be exported, it is unlikely for a range of economic factors that any such trade flows would be significant or durable in the long run.”

The pipeline must comply with a smorgasbord of environmental laws

The Keystone XL pipeline would not be built and operated in a vacuum. The project must comply with dozens of federal, state, and local laws, regulations, and other requirements. These restrictions protect everything from land, air, and water to cultural resources, endangered species, and the homes of minority and low-income people.

When crafting its latest environmental review, the State Department collaborated with at least 11 federal agencies and various tribal, state, and local agencies in Montana, South Dakota, Nebraska, and Kansas to ensure that the pipeline would meet all requirements. It also considered more than 1.5 million public comments when reaching its final determination on the project’s economic and environmental impacts.

Not the first cross-border oil pipeline Washington has approved

Keystone XL would not be the first cross-border oil pipeline the federal government has approved. The Congressional Research Service reported in October 2013 that 19 oil pipelines crossing international borders currently operate in the U.S. Since 2006, Washington has authorized three major pipelines that import oil from Canada. The State Department issued a presidential permit for the Southern Lights pipeline in 15 months, for the original Keystone pipeline in 24 months, and for the Alberta Clipper pipeline in 28 months. The Keystone XL pipeline has waited almost 76 months, and counting.

The president and liberal Democrats have held the Keystone XL pipeline hostage for more than six years. Their unfair and discriminatory treatment of the project has increased its costs by 48 percent, from $5.4 billion to $8 billion; delayed employment opportunities for thousands of workers; and left Americans exposed to unfriendly regimes in Venezuela and the Middle East.

This month, the new Republican majority will ask Democrats to put the political gamesmanship of the past six years aside in favor of working together to pass popular policies like the Keystone XL pipeline – and to make the Senate function again.

Issue Tag: Energy