Energy Blog

Energy Blog

US Chamber of Commerce Blog

Sean Hackbarth  Daniel Acker/Bloomberg.A welder near Atoka, Oklahoma. Photo credit: Daniel Acker/Bloomberg.

I'm keeping my fingers crossed that it'll be lucky number seven for the Keystone XL pipeline. This month marks seven years since TransCanada first applied for a State Department permit to transport U.S. and Canadian crude oil.

Icons of American engineering like the Golden Gate Bridge, Hoover Dam, and the Pentagon have all be completed faster than the time the State Department has taken to send a decision to President Obama.

In fact, so much time has passed that the Secretary of State who received the permit application is now running for president.

These delays have turned an ordinary infrastructure project--millions of miles of energy pipelines already run under the U.S.--into an ideological lightning rod.

Only took 7 years to build the Hoover Dam from design to opening (80 years ago). https://t.co/Ijv9xoBhGa

— Steve Milloy (@JunkScience) September 18, 2015

The seven-year delay has denied our country considerable economic benefits. When the pipeline when is finally built:

42,100 new direct and indirect jobs will be created. $3.4 billion will be added to the economy. $55.6 million in annual property taxes will be generated in the first year of operation.

Although the pipeline has been in regulatory limbo, public support for it continues to be strong, an American Petroleum Institute poll finds.

Sixty-eight percent of registered voters support building the Keystone XL pipeline. These majorities stretch across parties lines: 91% of Republicans; 62% of Independents; and 52% of Democrats.

api_kxl_poll_overall_support_9_17_15.jpg API poll on Keystone XL pipeline--9/17/2015API poll on Keystone XL pipeline--9/17/2015Source: American Petroleum Institute.

Mark Green at Energy Tomorrow points out other important findings from the poll:

78 percent agree Keystone XL should be built because it would strengthen U.S. economic security by helping create jobs here at home while keeping energy dollars in North America. 78 percent agree that building Keystone XL will help maintain a stable supply of oil from North America to U.S. refineries. 76 percent agree that it's in the United States' best interest to approve Keystone XL, because it would increase supply from North America instead of other regions of the world. 67 percent agree that approving Keystone XL will help the U.S. become more of an energy power in the world and help with U.S. foreign policy. 66 percent of voters said they would be more likely to support a candidate who supports building Keystone XL.

Seven years of debate is long enough. President Obama should end this drama and approve the Keystone XL pipeline.

American taxpayers lose as a result of @POTUS's #KeystoneXL delays - @BmtEnterprise agrees https://t.co/fSNhaQji8h pic.twitter.com/JlUf3NevwZ

— Energy Institute (@Energy21) August 24, 2015

Sean Hackbarth BHP Billiton CEO Andrew Mackenzie. BHP Billiton CEO Andrew Mackenzie. Photo credit: David Bohrer / © U.S. Chamber of Commerce.

In 1776, Scottish-native Adam Smith laid down the economic logic of free trade:

If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage.

With global trade growth trailing world economic growth, a reaffirmation of the benefits of free trade for workers and consumers is needed again nearly 250 years later.

Who better to do so than a fellow Scot?

Speaking at the U.S. Chamber's CEO Leadership Series, Andrew Mackenzie, head of BHP Billiton, applied Adam Smith's timeless insights today:

Opponents of open markets argue that they harm working people and their families and protectionism is the right response to resource scarcity. But I say free trade doesn't take jobs. It makes them.

In the U.S. right now, trade secures over 40 million jobs (or a quarter in U.S. manufacturing) and these pay about 15% more than purely domestic work. Despite warnings when NAFTA was negotiated, U.S. manufacturing exports to Canada and Mexico have more than doubled and the U.S. has increased its manufacturing trade surplus.

In total, trade liberalization has added $1.5 trillion to the U.S. economy since World War Two and made the average American almost 10% better off. So today, middle class Americans gain more than a quarter of their purchasing power from trade.

We need not fear the global trade that makes the growth of China, India and other emerging economies possible. Their continued development will create jobs, raise productivity and lift living standards here in the U.S and beyond.

Today, over 95% of the world's consumers, and three-quarters of its purchasing power, live outside the U.S.  Within five years, China's e-commerce market (which is already the world's largest) will double to a trillion dollars.

Other countries are following suit. By 2030, two billion people who don't have a bank account today will store money and make payments by mobile phone. This will create demand globally and market opportunities for the countries that embrace open markets.

If the U.S. eliminates the remaining trade barriers to these new markets, the economy would grow by hundreds of billions of dollars and 1.5 million jobs.

The principles of free trade also apply to commodities. Specifically Mackenzie urged lifting the U.S. oil export ban, calling it "a relic of the 70s oil-shock that today cuts jobs, profits, and pay in the US and worldwide."

Repeal would add hundreds of thousands of jobs to the U.S. economy and the economic consensus says prices at the pump would fall.  Importantly, it would show the world that the U.S. remains committed to economic freedom and the promotion of global growth.


In his Wealth of Nations, Smith called free trade, "not only the best palliative of a dearth, but the most effectual preventative of a famine." Fellow Scot Mackenzie would agree. Breaking down trade barriers of all kinds creates jobs and more economic opportunity. 

Sean Hackbarth White House press secretary Josh Earnest. White House press secretary Josh Earnest. Photo credit: Andrew Harrer/Bloomberg.

It's an age-old tactic that when you can't win a policy argument, you attack the messenger.

The Greater Houston Partnership hosted a speech by House Majority Leader Kevin McCarthy (R-Calif.) calling for an end to the oil export ban. "The time is right, from an economic basis," to end it, he said.

This didn't sit well with White House Press Secretary Josh Earnest. In announcing that President Obama would veto any bill that lifted the 40-year-old ban because the Commerce Department and not Congress should make that decision, Earnest took a potshot at the Houston business group:

This policy announcement is being made by Leader McCarthy in front of an organization in Houston that is largely funded by four or five of the biggest oil companies in the United States.


With Houston being an energy hub, no one should be shocked that the Greater Houston Partnership supports ending a 40-year-old policy that impedes American energy development. The organization, made up of 1,200 member companies and organizations, shouldn't feel ashamed for taking that position.

But Earnest's ad hominem attack ignores the fact that Houston is the fourth-largest city in the U.S. with a diversified economy that includes manufacturing, construction, retail, international trade, and a thriving startup community. Ending the export ban will benefit businesses across the board by lowering fuel costs and creating jobs.

It's obvious that Earnest and his colleagues need to be educated about oil export ban--a policy created by Congress that now needs to be ended by Congress.

This video, "Oil Exports 101" from Producers for American Crude Oil Exports (PACE), is a good place to start.

Oil Exports 101

Maybe then the White House can have a serious discussion about ending this outdated energy policy.