U.S. Chamber of Commerce link

Energy Blog

Abram Olmstead Image of White House with veto banner

President Barack Obama on Tuesday rejected bipartisan legislation to approve the Keystone XL oil pipeline — and missed a chance to bring many sides together.

Of all the chances to put politics aside and offer a productive gesture of bipartisan compromise, it's hard to not see this as a lost opportunity. The measure was approved by 266-153 in the House, and nine Democrats joined 53 Republicans to pass the bill in the Senate. Furthermore, both labor unions and business leaders came together — along with a broad majority of the public — in support.

After a long journey through every procedural hurdle, Keystone XL has become a poster-child for a larger issue.

Our permitting process makes it virtually impossible to build anything. Clearly we need regulatory and permitting reform.

Yes, we still need Keystone XL — along with a host of other infrastructure projects — but more importantly, we need to fix the system that has allowed progress to get so regularly lost in translation.

The Golden Gate Bridge, the Hoover Dam, and the Pentagon were all built in less time than it's taken for this project to get through the review process.

It shouldn't take 6-plus years to approve (or block) the creation of 42,000 new jobs:

022314_ss_keystone.jpg Infographic highlighting timeline of Keystone KL review process
Sean Hackbarth Pipe to be used for the Keystone XL pipeline in a field in Gascoyne, ND.Pipe to be used for the Keystone XL pipeline in a field in Gascoyne, ND. Photo credit: Sean Hackbarth.

Congress is sending the bill approving the Keystone XL pipeline to the White House on Tuesday. Expect it to dominate coverage in Washington.

I’ve been following the saga for over three years and even traveled with the U.S. Chamber's Institute for 21st Century Energy along the proposed pipeline’s route last fall.

I'll be chatting about Keystone XL pipeline Tuesday, 10:30am ET on Facebook.

Until then, here are some things to read to help you catch up before President Obama is expected to veto the legislation:

6 reasons why the Keystone XL pipeline is in the national interest. If the president is as concerned with minimizing greenhouse gas emissions, then he should approve the pipeline. I talked to Jim Doolittle and his wife, Karen Wagner. The pipeline will travel across their ranch in South Dakota. If the pipeline is denied, a Glasgow, MT resident told me that she hopes someone from the administration comes to her town to explain why he did it. While Canada continues developing its oil, America is losing out on the jobs, economic growth, and local tax revenue that would be generated by the Keystone XL pipeline.
Sean Hackbarth Breaking Up With Fossil Fuels is Hard to Do

Yale University anti-energy activists may hate fossil fuels, but they do like staying warm.

The latest snowstorm to hit the Northeast forced Fossil Free Yale to cancel its event for Global Divestment, the Yale Daily News reports:

FFY Project Manager Mitch Barrows ’16 said the delay is due to unfavorable weather conditions and other logistical issues, including some cancellations from speakers and performance groups. The postponement was made final as of Thursday evening.

As part of Global Divestment — a two-day coordinated outreach effort spanning campuses and communities in five continents — FFY had organized a series of events to rally support for its cause, including performances from student groups, guest speakers and a collaborative art installation.

The movement’s irrational mission is to force institutions, like Yale University, to make bad financial decisions [subscription required] by selling their investments in companies that develop oil, natural gas, and coal.

One of the leaders of this movement is author Naomi Klein. Hot Air’s Jazz Shaw linked to a web chat by Klein—that was presumably run on computers powered by a coal- or natural gas-fired power plant--where she declared energy producers to be a “rogue sector” of the economy, and we must nationalize them in order to wipe them out of existence

[For more on Klein's extremism, read my post on what she calls, "Blockadia," a movement to block fossil fuel projects.]

Such an extreme position conflicts with reality. As you can see in this Energy Information Administration chart, Americans will use fossil fuels for decades to come.

eia_energyoutlook2014_energyconsumption_800px.jpg  1980-2040 Energy Information Administration chart on primary energy consumption: 1980-2040

Because of their high energy density, fossil fuels offer a lot of energy at an affordable cost. Cooking, cleaning, communicating, commuting, and living our modern lives would be more expensive, if not impossible, without fossil fuels.

As the video above shows “breaking up with fossil fuels is hard do to.”

Thomas Pyle of @AEA: Fossil fuel divestment campaign wants Floridians to “‘divest’ from modern life.” https://t.co/r6x6b3HqyQ

— America's Power (@AmericasPower) February 13, 2015

Sean Hackbarth A man in a t-shirt supporting the Keystone XL pipeline at a Laborers' International Union of North America rally.A man in a t-shirt supporting the Keystone XL pipeline at a Laborers' International Union of North America rally. Photo credit: Andrew Harrer/Bloomberg.

In the shadow of President Obama’s expected veto, Keystone XL pipeline supporters continued advocating for the energy infrastructure project.

Terry O'Sullivan, president of the Laborers' International Union of North America (LIUNA), a long-time backer of the pipeline, lambasted the President and Congressional Democrats for distorting the approval process and “cowardly politicking”:

To back up his expected veto, the President has correctly stated that there is “a well-established process in place” to consider approval of major infrastructure projects such as the Keystone XL Pipeline. What he didn’t say is that he and too many job-killing Democrats have perverted that process.

We remain hopeful that this lifeline to good careers and energy independence will be built. If it is, it won’t be due to a legitimate review process for pipelines – it will be because it managed to survive a destructive distortion of the approval process and cowardly politicking.

Joining O’Sullivan are 24 Republican governors who sent a letter to President Obama, asking him to sign the bill:

With one stroke of a pen, you have the power to give thousands of Americans the shot at a good-paying job that will help them provide for their families and get ahead in a tight economy. Approval would also demonstrate a sincere interest from your Administration in building bipartisan support for a truly all-of-the-above energy policy, and strengthen our economic relationship with Canada. Alternatively, you also have the power to veto the jobs, economic growth, and increased energy security the Keystone XL  pipeline represents.

The bipartisan support reflected by labor unions and Republican leaders is seen in polling on the Keystone XL pipeline. A December 2014 Fox News poll found that majorities of Democrats, Republicans, and Independents think the Keystone XL pipeline should be built. Such broad-based support for the project has been the norm.

Karen Harbert, President and CEO of the U.S. Chamber’s Institute for 21st Century Energy sums it up in a statement released after the House of Representatives approved the Keystone XL bill:

President Obama has a choice—side with the vast majority of the American people, more jobs, and more revenue, or say no to appease a vocal minority who are using this issue to wage a larger fight. It is time for the president to stop holding our economy back and to sign the bill, grant the permit, and greenlight jobs and investment in America.

According to the State Department, the Keystone XL pipeline will create more than 42,000 jobs, add $3.4 billion to the economy, and generate more than $5.2 billion in property taxes for local communities.

Sean Hackbarth Laborers' International Union of North America (LiUNA) hold up signs in support of the Keystone XL pipeline. Photographer: Andrew Harrer/Bloomberg.Laborers' International Union of North America (LiUNA) hold up signs in support of the Keystone XL pipeline. Photographer: Andrew Harrer/Bloomberg.

The House of Representatives has an important vote ahead of them Wednesday. They can accept the factually-challenged arguments of anti-energy zealots who oppose the Keystone XL pipeline, or they can support the jobs and economic benefits that will come from it.

In the last few days, the Huffington Post piled on with two poorly-argued posts against the project.

First, Mark Weisbrot, co-director of Center for Economic and Policy Research, declared that “ditching” the pipeline would be a “no-brainer.”

In fact, the real “no-brainer” would be not approving it. Weisbrot writes:

The 1,179-mile pipeline extension would carry some of the world's dirtiest oil from the tar sands of Alberta, Canada to the Gulf Coast of Texas.

Stop right there. The truth is from a greenhouse gas emissions perspective, Canadian oil is similar to Venezuelan and Nigerian oil. Either that type of oil will come from a friendly neighbor like Canada, or it will come from less-friendly sources. That’s the choice.

Weisbrot continues:

Supporters of the pipeline have tried to argue that the oil from Canada's tar sands will be exploited anyway, with or without the pipeline. There wasn't much to that argument a year ago, but after a 50 percent fall in oil prices, there is nothing left of it. This oil is expensive to produce, and without a guarantee of cheap transportation, oil companies are not going to invest in expanding production in the 170-billion barrel reserves of Canada's tar sands.

The truth is oil price volatility isn’t stopping development. BloombergBusiness’ Matthew Philips writes, that oil sands production is more akin to mining. “An oil sands project, once up and running, can continue to chug along, even in the face of lower prices, since its costs are spread out over a decade or more,” he writes. Philips then notes that new production isn’t letting up:

A total of 14 new oil sands projects in Canada are scheduled to start next year with a combined capacity of 266,000 barrels a day, according to data published by Oilsands Review. That’s 36 percent more than were started in 2014. Since most of those investments have already been made, those projects are probably safe. Even for projects that are only partially paid for, investors will still probably be loath to stop halfway.

Next, we have Tom Steyer, bankroller of all things anti-Keystone. He argued that the pipeline is a “bad deal.” Ironically while griping that pipeline proponents toss out “tired talking points,” he throws out a misleading talking point of his own that only a few dozen permanent jobs along will be created.

Steyer, the supposedly savvy investor, ignores the thousands of construction jobs and local economic development the pipeline will create. Only this isn’t a talking point. It’s based on the construction of the southern leg of the pipeline.  Southern Methodist University's Maguire Energy Institute found that in Oklahoma and Texas, the project resulted in

Over $5.7 billion in new economic activity. Over 42,000 person years of new employment. Over $217 million in additional state and local taxes.

Terry O'Sullivan, General President of Labors International Union of North America (LIUNA), hasn't taken lightly to Steyer and others (including the President) disparaging the thousands of "temporary" construction jobs the Keystone XL pipeline will generate. In a 2014 Washington Post op-ed, O'Sullivan pushed back at Steyer [emphasis mine]:

It's not completely surprising that a hedge-fund manager would fail to understand the kitchen-table economics of a pipeline or its value to working people. Or that construction work is, by nature, temporary and that millions of construction workers lead middle-class lives, own houses and put their children through college by moving from one union construction job to the next.

And in a letter to House Members in January, O'Sullivan added:

Regardless of the lies and mischaracterization of construction jobs as somehow being inferior because of the temporary nature of the industry, this legislation is a jobs bill for the thousands of union construction workers that will build this Pipeline.

The State Department concluded that the Keystone XL pipeline will create 42,000 jobs with minimal environmental impact.

When voting, Members of Congress can either side with facts or fiction.

Tell your Representative to support the Keystone XL pipeline.