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View from the Hill Blog: President Punts Pipeline Permit

By Grace Boatright, View from the Hill National Grange Legislative Blog (1/20/12)

  JANUARY 22, 2012 --

This week, President Obama vetoed TransCanada Corporation’s request for a permit to begin construction on its 1,661-mile oil pipeline, costing $7 billion and stretching from Canada all the way to refineries on the Gulf coast. Despite the Washington Post’s claim that “regular people don’t care,” the President’s permit refusal has caused quite a stir among many in Washington and abroad…including this very regular person (washingtonpost.com). Leftist environmental groups are ecstatic, claiming that developing Canada’s carbon-intensive tar sands would hurt global warming, while others see the permit decline as the President’s political ploy to put off major decisions until after the November elections. I myself can be included in the latter group.  

The White House has claimed that it decided to deny the permit because it has not had adequate time to review the potential environmental impact created by the pipeline. Rather, they have decided to delay the decision until 2013. It seems the Obama administration feels like a year is an appropriate amount of time to fully review and revise the project…even though the State Department has been reviewing the pipeline project since its initial proposal in 2008 (FOUR years ago). The State Department has also stated that the pipeline project would create 5,000 to 6,000 construction jobs in the two years needed to build it; and those are just construction jobs.

Other jobs and productivity that occur as a result of the pipeline project were not included, like the inevitable purchasing of supplies and equipment, local stores and businesses benefitting from new workers spending money, accounting and financial services related to the project, etc.

Obama’s feelings of hesitation and caution are not mutual. The six states that were set to host the pipeline seem well onboard to have their local and state economies improved, even Nebraska, whose environmentally sensitive Sand Hills were a major concern to environmentalists groups. “It certainly is a major step backwards. We need to make contact with TransCanada. We need to review our statutes relative to what the President did. We need to figure out if this means we have to start all over again,” says Nebraska Governor Dave Heineman (Efstathiou). Nebraska officials had already undergone negotiations to have the pipeline rerouted around their Sand Hills, showing the cooperation and eagerness to move forward by those actually involved in, and affected by, the project.

What else does the U.S. have to gain from all of this, besides jobs and an improvement on our economy? How about the maintenance of our healthy relationship with Canada…one of the few friends we have left. Canada is our largest supplier of foreign oil (if you call Canada foreign), exporting to the U.S. around 2.67 million barrels of oil a day! That’s more than the Middle East and Venezuela. Wouldn’t we rather buy oil from a friendly, neighboring ally whose economy and political environment is stable (or as stable as economies and governments get these days), and whose close proximity to the U.S. could dramatically decrease the costs associated with shipping and transporting that oil? Anadarko Petroleum Corporation CEO Jim Hackett said Wednesday; “We have one of the most friendly nations to our country who has never stopped trade in my lifetime that is willing to send their supplies down to us as if it were domestic oil,” (Efstathiou). Talk about an offer you can’t refuse (although we did).

Those continual Canadians are not taking this lying down though. Plans to reapply for the required permit are already underway, as are plans to possibly take their business elsewhere. A different pipeline, reaching from the Canadian oil sands to the British Columbia coast, has already been proposed and if approved would start shipping oil to Asian instead. Bottom line- when times are tough, it’s not a good idea to spit in the face of one of the few friends you have left, especially when that relationship is worth billions of dollars.

So why would the President want to delay a project that creates jobs, improves our economy, reduces our dependence on foreign oil, and improves relations with one of our biggest allies? I’ll let you decide for yourself.   

- Grace Boatright
National Grange Programs Assistant



The Washington Post. Keystone XL pipeline application rejected by Obama administration, will it hurt his reelection chances? Washingtonpost.com. January 18, 2012.

Efstathiou, Jim. Keystone XL Pipeline Seen Moving Ahead on Alternative Route. Bloomberg.com. January 19, 2012. 

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