Will Obama Veto the Keystone XL pipeline? Probably

The President has dithered over this issue for six years. His slow walking may make him look good to his environmental base but to almost everyone else he looks like a foolish ideologue. This project has been studied to death and it is clear that it is in the best interests of both the United States and Canada. It should have been approved several years ago.

Last week after the thumping that Democrats got, the President once again made several incredibly shallow and nonsensical comments about Keystone. He said, during a press conference last Wednesday that he wants to be assured that Keystone will actually create jobs and contribute to the lowering of gasoline prices. “And is it going to be, on net, something that doesn’t increase climate change that we’re going to have to grapple with?”

Something on the order of $5-8 billion will be invested with the construction of Keystone XL. Investments of that magnitude are job creators, in spite of the debate that has taken place about how many jobs. Between direct and indirect employment effects it is likely that the number will exceed 100,000. Many of those jobs are high paying and union jobs. The employment and economic effects are distributed among a large number of states, from those that make up the route that the pipeline will take to those that manufacture all the equipment that would be used in building it.

To question whether it “will actually create jobs” is a statement that insults the intelligence of the American people. The same is true for the President’s statement about climate change. He knows that the Canadian oil is going to be produced, shipped, refined, and consumed. The only question is how much is consumed here benefitting our economy and how much is consumed in China.

There have been numerous studies showing that the export of crude oil will lower world prices even more and that in turn will lower gasoline prices. Keystone XL will improve distribution efficiency, that also contributes to lower costs, and help rationalize the crude oil that is refined here and that which is exported. Mr. President, it is economics 101. Increased supply lowers cost. It is that simple.

The President just doesn’t like fossil energy, which is why he has dragged his feet and refused to approve the project after the State Department review. In spite of that hostility, he will probably not go so far and to veto legislation that will pass with strong bi-partisan support. If he did, he would reinforce the poor opinion that he is held in by a majority of Americans and demonstrate that he really has little interest in cooperating with the Republican Congress. The President has two years to demonstrate that he has learned over the past 6 years how to govern and those two years may redeem his legacy. He can either leave town as a failed president like Jimmy Carter or a smart one like Bill Clinton who learned after 1994 that collaboration is the route to success.

The odds favor approval but the Nebraska Supreme Court review of the way the route within Nebraska was changed adds uncertainty that could add to delay.

 

This article appeared on the National Journal’s Energy Insiders weblog at http://disqus.com/wokeefe/

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