On March 1, 2013, the U.S. Department of State released a Draft Supplementary Environmental Impact Statement (Draft SEIS) on Keystone XL that determined “there would be no significant impacts to most resources along the proposed Project route.” There would also be no impact on climate because (as the SEIS noted) Canada’s Alberta tar sands will be developed with or without the Keystone pipeline.
The United States consumes over 22 million barrels of oil a day. This has an enormous negative effect on our balance of trade, and, equally frustrating, we import oil from nations that are unstable, unreliable or downright unfriendly, such as Venezuela and the fiefdoms dotting the Persian Gulf. Oil has traded as high as $150 a barrel during the last three years, although it is now trading under $100. There are two options available to make us, not only less dependent on expensive foreign oil, but, quite possibly, a net exporter of oil, thereby improving our balance of payments at the same time. They are: approval of the Keystone XL pipeline and “fracking”, the technology that squeezes untapped oil out of shale rock.
The SEIS confirms that the White House has run out of excuses to keep delaying approval of a $5.3 billion private investment that would provide anywhere from 3,500 to 16,000 direct jobs (depending on whose estimates we read) and more downstream, and make no mistake, these are “shovel ready” jobs. The Wall Street Journal points out that the “oil sands contribute a mere 0.01% of global carbon emissions, and if that sort of thing bothers you, Canada is offsetting that with carbon‑reduction policies elsewhere.” The issue for the United States is not whether the oil will flow, but how much Americans will benefit.
Again, according to The Wall Street Journal, the “rule of thumb is that for every dollar of imported foreign oil, North America receives about 10 cents of the economic benefit.” The unreliable and often hostile states to which we referred earlier, pocket the balance. The Keystone XL has also reserved space for about 250,000 barrels a day of oil produced in the U.S., which means a new and environmentally safer outlet for oil from the booming Bakken fields of North Dakota. All of this has been known for some time, but in 2011 President Obama opposed the project in the face of strong objections by the Sierra Club whose PAC, according to the Federal Elections Commission, contributed over $1,000,000 to reliable politicians during the 2012 election cycle. The Pipeline’s builder, TransCanada, applied again with a new, less objectionable route, so now the President faces another choice. Even his labor supporters favor the pipeline, because it will produce many union jobs. Mr. Obama and Secretary of State John Kerry should also be thinking about the impact of rejection of the pipeline on U.S‑Canadian relations. Rejection of the pipeline would be an insult to Canada, which is our largest trading partner and has stood shoulder-to-shoulder with America in the war on terrorism. It also would be a step back from the integration of the North American economies.
Industry groups say the State Department’s analysis confirms that it is time to stop delaying the pipeline. “The Keystone XL project has become one of the most closely examined infrastructure projects in our nation’s history ‑‑ and it continues to pass with flying colors,” said U.S. Chamber of Commerce’s energy spokeswoman Karen Harbert. Once again, the State Department has confirmed that this project is environmentally sound. Moreover, notwithstanding presidential claims to the contrary, production of oil on federal lands is down 33% in the last two years.
Fracking would further increase America’s oil production. Oil production grew by the fastest pace in U.S. history last year, and will accelerate in 2013, as horizontal drilling and hydraulic fracturing (that is what fracking is) unlocks crude oil trapped in formations such as North Dakota’s Bakken shale. According to the Department of Energy, North Dakota boosted production 40% last year through October. Texas oil production was up 23 percent, and production in Utah rose 11 percent. U.S. oil production is on track to surpass the Saudi’s by 2020. Saudi Arabia, the world’s largest oil exporter, pumped 9.57 million barrels in a single day in December of 2012, according to data compiled by Bloomberg.
While many environmentalists abhor the prospect of trying to harvest oil from shale, there should be no further delay by the Obama administration. In 2012, according to “U.S. Imports of Crude Oil and Petroleum Products”, we imported 3,878,250,000 barrels of crude oil and petroleum products. Based on the Brent Crude Oil Average Price Per Barrel for 2012 of $111.67, that amounts to nearly a half trillion dollars spent on imported foreign oil in 2012. That comes out to about $824 thousand per minute.
President Obama, it is time to approve the Keystone Pipeline.