The Redhunter

On Wednesday, the State Department announced that it recommended rejecting the application of TransCanada Corp. to build the Keystone XL oil pipeline, and Mr. Obama concurred. The project would have transported heavy, oil-like bitumen from Alberta -- and, potentially, from unconventional oil deposits in states such as Montana -- to U.S. refineries on the Gulf of Mexico coast.

Environmentalists have fought Keystone XL furiously. In November, the State Department tried to put off the politically dangerous issue until after this year's election, saying that the project, which had undergone several years of vetting, required further study. But Republicans in Congress unwisely upped the political gamesmanship by mandating that State make a decision by Feb. 21. Following Wednesday's rejection, TransCanada promised to reapply -- so the administration has again punted the final decision until after the election.

We almost hope this was a political call because, on the substance, there should be no question. Without the pipeline, Canada would still export its bitumen -- with long-term trends in the global market, it's far too valuable to keep in the ground -- but it would go to China. And, as a State Department report found, U.S. refineries would still import low-quality crude -- just from the Middle East. Stopping the pipeline, then, wouldn't do anything to reduce global warming, but it would almost certainly require more oil to be transported across oceans in tankers.

Environmentalists and Nebraska politicians say that the route TransCanada proposed might threaten the state's ecologically sensitive Sand Hills region. But TransCanada has been willing to tweak the route, in consultation with Nebraska officials, even though a government analysis last year concluded that the original one would have "limited adverse environmental impacts." Surely the Obama administration didn't have to declare the whole project contrary to the national interest -- that's the standard State was supposed to apply -- and force the company to start all over again.

Environmentalists go on to argue that some of the fuel U.S. refineries produce from Canada's bitumen might be exported elsewhere. But even if that's true, why force those refineries to obtain their crude from farther away? Anti-Keystone activists insist that building the pipeline will raise gas prices in the Midwest. But shouldn't environmentalists want that? Finally, pipeline skeptics dispute the estimates of the number of jobs that the project would create. But, clearly, constructing the pipeline would still result in job gains during a sluggish economic recovery.

There are far fairer, far more rational ways to discourage oil use in America, the first of which is establishing higher gasoline taxes. Environmentalists should fight for policies that might actually do substantial good instead of tilting against Keystone XL, and President Obama should have the courage to say so.

Ok, so if killing Keystone was dumb, why did he do it? Post columnist Robert Samulson gives us the answer; to placate the envirocrazy left:

Rejecting the Keystone pipeline is an act of insanity
By Robert J. Samuelson
Published: January 19

President Obama's rejection of the Keystone XL pipeline from Canada to the Gulf of Mexico is an act of national insanity. It isn't often that a president makes a decision that has no redeeming virtues and -- beyond the symbolism -- won't even advance the goals of the groups that demanded it. All it tells us is that Obama is so obsessed with his reelection that, through some sort of political calculus, he believes that placating his environmental supporters will improve his chances.

Aside from the political and public relations victory, environmentalists won't get much. Stopping the pipeline won't halt the development of tar sands, to which the Canadian government is committed; therefore, there will be little effect on global-warming emissions. Indeed, Obama's decision might add to them. If Canada builds a pipeline from Alberta to the Pacific for export to Asia, moving all that oil across the ocean by tanker will create extra emissions. There will also be the risk of added spills.

Now consider how Obama's decision hurts the United States. For starters, it insults and antagonizes a strong ally; getting future Canadian cooperation on other issues will be harder. Next, it threatens a large source of relatively secure oil that, combined with new discoveries in the United States, could reduce (though not eliminate) our dependence on insecure foreign oil.

Finally, Obama's decision forgoes all the project's jobs. There's some dispute over the magnitude. Project sponsor TransCanada claims 20,000, split between construction (13,000) and manufacturing (7,000) of everything from pumps to control equipment. Apparently, this refers to "job years," meaning one job for one year. If so, the actual number of jobs would be about half that spread over two years. Whatever the figure, it's in the thousands and thus important in a country hungering for work. And Keystone XL is precisely the sort of infrastructure project that Obama claims to favor.

The big winners are the Chinese. They must be celebrating their good fortune and wondering how the crazy Americans could repudiate such a huge supply of nearby energy. There's no guarantee that tar-sands oil will go to China; pipelines to the Pacific would have to be built. But it creates the possibility when the oil's natural market is the United States.

There are three things to remember about Keystone and U.S. energy policy.

First, we're going to use lots of oil for a long time. The U.S. Energy Information Administration (EIA) estimates that U.S. oil consumption will increase 4 percent between 2009 and 2035. The increase occurs despite highly optimistic assumptions about vehicle fuel efficiency and bio-fuels. But a larger population (390 million in 2035 versus 308 million in 2009) and more driving per vehicle offset savings.

The more oil we produce domestically and import from neighbors, the more we're insulated from dramatic interruptions of global supplies. After the United States, Canada is the most dependable source of oil -- or was, until Obama's decision.

Second, barring major technological breakthroughs, emissions of carbon dioxide, the main greenhouse gas, will rise for similar reasons. The EIA projects that America's CO2 emissions will increase by 16 percent from 2009 to 2035. (The EIA is updating its projections, but the main trends aren't likely to change dramatically.) Stopping Canadian tar-sands development, were that possible, wouldn't affect these emissions.

Finally, even if -- as Keystone critics argue -- some Canadian oil were refined in the United States and then exported, this would be a good thing. The exports would probably go mostly to Latin America. They would keep well-paid industrial jobs (yes, refining) in the United States and reduce our trade deficit in oil, which exceeded $300 billion in 2011.

By law, Obama's decision was supposed to reflect "the national interest." His standard was his political interest. The State Department had spent three years evaluating Keystone and appeared ready to approve the project by year-end 2011. Then the administration, citing opposition to the pipeline's route in Nebraska, reversed course and postponed a decision to 2013 -- after the election.

Now, reacting to a congressional deadline to decide, Obama rejected the proposal. But he also suggested that a new application with a modified Nebraska route -- already being negotiated -- might be approved, after the election. So the sop tossed to the environmentalists could be temporary. The cynicism is breathtaking.