U.S. CHAMBER OF COMMERCE

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US Chamber of Commerce Blog

Sean Hackbarth President Obama rejects Keystone Pipeline President Barack Obama announces he rejected the Keystone XL pipeline.Photo credit: Andrew Harrer/Bloomberg.

President Obama tossed economics and science out the window and onto the White House lawn when he rejected the Keystone XL pipeline.

After leaving it in bureaucratic limbo for seven years, the president claimed the project--which would safely transport Canadian and American crude oil to Gulf Coast refineries--would have little economic effect and would hurt U.S. leadership in reducing carbon emissions.

Both claims are bunk, as the State Department’s analysis shows.

Let’s first take up President Obama’s economic argument.

“The pipeline would not make a meaningful long-term contribution to our economy," President Obama said at a White House event.

The State Department’s analysis disagrees:

42,000 jobs would be created. $3.4 billion would be added to the U.S. economy. $405 million would be earned by workers building the pipeline in Montana, South Dakota, and Nebraska. $55 million in property tax revenue would go to local communities.

What America lost when @POTUS denied the #KeystoneXL pipeline: pic.twitter.com/rDa8D9Pjui

— Energy Institute (@Energy21) November 6, 2015

Not only did President Obama tossed aside the Keystone XL pipeline’s economic benefits, he also ignored the science showing that the project’s environmental effects will be minimal.

"America is now a global leader when it comes to taking serious action to fight climate change," President Obama said. "And frankly, approving this project would have undercut that global leadership."

The only thing the Keystone XL pipeline would undercut it America’s reliance on oil from unfriendly countries. It certainly wouldn’t undercut efforts to reduce carbon emissions.

In fact, the State Department found that not building the pipeline would result in higher greenhouse gas emissions, increases ranging anywhere from 28%-42%.

StateDepartment_KeystoneXL_Alternatives.png Impacts of Keystone XL alternatives [table]Impacts of Keystone XL alternatives [table]

But as Phil Kerpen tweeted, the administration is more concerned about perception than real science.

#KeystoneXL was rejected not because it ACTUALLY increases global warming but because of PERCEPTION that it does. pic.twitter.com/HsAHt2sgO6

— Phil Kerpen (@kerpen) November 6, 2015

The truth is, our president--a “science geek” according to his top science advisor--rejected science and instead chose to side with anti-energy opponents of the pipeline.

The reaction to President Obama’s decision was strong and swift.  

“In rejecting the Keystone XL pipeline, President Obama has put politics before the best interests of the country,” said U.S. Chamber President and CEO Tom Donohue. “Rejecting Keystone breaks two promises the president made—to put jobs and growth first and to seek bipartisan solutions.”

President and CEO of the American Petroleum Institute Jack Gerard said: “This decision will cost thousands of jobs and is an assault to American workers. It’s politics at its worst.”

Labor union leaders were beyond disappointed.

Terry O’Sullivan, general president for Laborers’ International Union of North America (LIUNA), said President Obama threw “hard-working, blue-collar workers under the bus.”

On a press call, Sean McGarvey, president of the North America's Building Trades Unions, called the Keystone XL pipeline, “a victim of the radical environmental movement.” The jobs lost by President Obama’s decision “are real jobs for real people supporting real families.”

Before he flies off to Paris, President Obama should order Air Force One to head west. He himself should visit people living along the pipeline’s route and explain why they can’t have the jobs, the economic growth, and the local tax revenue that would come from the pipeline. As I wrote in 2014:

Bonnie Davidson of the Glasgow Courier said that local residents were scratching their head as to what the controversy is with the pipeline. She told me she hopes that if the Obama administration denies the permit someone should come to Glasgow and tell them why.

Those people deserve to be told why he took those opportunities away from them.

Different kind of November chill ... a chill on the kind of #energy #infrastructure investment US needs. #KXL https://t.co/lN0yjKsLlC

— Mark Green (@mdgreen1956) November 6, 2015

Sean Hackbarth Construction of the Gulf Coast Project, part of the Keystone XL pipeline near Ada, Ok. Construction of the Gulf Coast Project, part of the Keystone XL pipeline near Ada, Ok. Photo credit: Daniel Acker/Bloomberg.

The State Department will continue its seven-year review of the Keystone XL pipeline and rejected TransCanada’s request to pause it while questions about the proposed route are worked out in Nebraska.

The reaction from pipeline supporter Sen. Heidi Heitkamp (D-N.D.) to the State Department’s decision speaks volumes:

So now the administration wants to make a decision about the Keystone XL pipeline? It’s been stalling and delaying such action for seven years now – politicizing an energy infrastructure project and blowing it completely out of proportion.

This screams of political gamesmanship.

In 2014, the same State Department that today “wants that work to continue” on the pipeline review, said a decision on the project would be delayed because of “the uncertainty created by the on-going litigation in the Nebraska Supreme Court which could ultimately affect the pipeline route in that state.”

The Washington Post’s editorial board called that decision “embarrassing.”

The United States continues to insult its Canadian allies by holding up what should have been a routine permitting decision amid a funhouse-mirror environmental debate that got way out of hand. The president should end this national psychodrama now, bow to reason, approve the pipeline and go do something more productive for the climate.

Why the double-standard by the Obama administration? Ed Crooks, an energy editor for The Financial Times speculated on Twitter that President Obama wants to make a big splash at next month’s Paris climate talks by announcing he’s rejecting the pipeline.

Sudden insight: Blocking Keystone XL is going to be President Obama's big announcement when he goes to Paris, isn't it? #COP21 #KXL

— Ed Crooks (@Ed_Crooks) November 4, 2015

I hope not, but it’s not out of the question. Allowing politics to trample sound energy policy has been the name of the game throughout this regulatory ordeal.

timeline-keystone-pipeline-xl-talks-1132015.png Timeline of Keystone Pipeline XL Talks Timeline of Keystone Pipeline XL Talks
Sean Hackbarth A coal-fired electric power plan in Datong, China.A coal-fired electric power plan in Datong, China. Photo credit: Stefen Chow/Bloomberg.

Two stories about coal use in Asia highlight the futility of EPA’s efforts to reduce global carbon emissions by straightjacketing the U.S. economy with draconian carbon regulations.

First, there’s The New York Times story that China has been using more coal than anyone thought:

China, the world’s leading emitter of greenhouse gases from coal, has been burning up to 17 percent more coal a year than the government previously disclosed, according to newly released data. The finding could complicate the already difficult efforts to limit global warming.

Even for a country of China’s size, the scale of the correction is immense. The sharp upward revision in official figures means that China has released much more carbon dioxide — almost a billion more tons a year according to initial calculations — than previously estimated.

The increase alone is greater than the whole German economy emits annually from fossil fuels.

The new data, which appeared recently in an energy statistics yearbook published without fanfare by China’s statistical agency, show that coal consumption has been underestimated since 2000, and particularly in recent years. The revisions were based on a census of the economy in 2013 that exposed gaps in data collection, especially from small companies and factories.

Illustrating the scale of the revision, the new figures add about 600 million tons to China’s coal consumption in 2012 — an amount equivalent to more than 70 percent of the total coal used annually by the United States.

 

To borrow from the management mantra, "You can't manage what you can't measure."

China has pledged to reduce its carbon emissions from a peak level “around” 2030--assuming anyone knows how much is being produced by then.  However, this pledge isn’t anything exceptional. It’s “little more than business as usual,” writes the Institute for 21st Century Energy’s Stephen Eule. “In other words, the Chinese have committed to doing what they are doing already.”

 

The second story is that Asia’s appetite coal for it isn’t letting up [h/t GWPF]:

While much attention has been given to a potential peak in China's coal demand and worries about emissions, in Asia alone this year power companies are building more than 500 coal-fired plants, with at least a thousand more on planning boards. Coal is not only cheaper than natural gas, it is often available locally and has no heavy import costs.

"Electricity is increasing its share in total energy consumption and coal is increasing its share in power generation," said Laszlo Varro, head of the gas, coal and power markets division for the International Energy Agency (IEA).

Some of the biggest growth in coal use is in India, where it meets 45 percent of total energy demand, compared with just over 20 percent each for petroleum products and biomass/waste.

"We're absolutely sure India's coal demand will continue to grow," Varro said.

Coal will continue to be used in developing countries because it’s a cheap source of electricity. To think U.S. negotiators at upcoming climate talks in Paris will be able to convince China and India to abstain from using cheap energy to better the lives of their citizens is living in a fantasy world.

These facts won't stop the Obama administration from touting EPA's Clean Power Plan as the United States' key contribution to the Paris talks. For them it's full speed ahead to push aside cheap and abundant coal as a source of electricity no matter the costs to our economy.

As Eule writes:

What’s more of a mystery is why the administration is content to throw away the United States’ energy edge in favor of an agreement that will put us at a competitive disadvantage for no discernible environmental impact. In fact, when other nations choose not to impose carbon restrictions as stringent as those in the U.S., we will be likely to see “carbon leakage,” where emissions are not reduced at all, and instead simply moved (along with the jobs that come with them) to our global competitors.