The Wall Street Journal yesterday explained the Obama administration’s astonishing decision.
The central conflict of the Obama Presidency has been between the jobs and growth crisis he inherited and the President’s hell-for-leather pursuit of his larger social-policy ambitions. The tragedy is that the economic recovery has been so lackluster because the second impulse keeps winning.
Yesterday came proof positive with the White House’s repudiation of the Keystone XL pipeline, TransCanada’s $7 billion shovel-ready project that would support tens of thousands of jobs if only it could get the requisite U.S. permits. Those jobs, apparently, can wait.
Unless the President objected, December’s payroll tax deal gave TransCanada the go-ahead in February to start building the pipeline, which would travel 1,661 miles from Alberta to interconnections in Oklahoma and then carry Canadian crude to U.S. refiners on the Gulf Coast.
The State Department, which presides over the Keystone XL review because it would cross the 49th parallel, claimed yesterday that the two-month Congressional deadline was too tight “for the President to determine whether the Keystone XL pipeline is in the national interest.” The White House also issued a statement denouncing Congress’s “rushed and arbitrary deadline,” which merely passed with overwhelming bipartisan support.
This is, to put it politely, a crock.
Keystone XL has been planned for years and only became a political issue after the well-to-do environmental lobby decided to make it a station of the green cross. TransCanada filed its application in 2008, and State determined in 2010 and then again last year that the project would have “no significant impacts” on the environment, following exhaustive studies. The Environmental Protection Agency chose to intervene anyway, and the political left began to issue ultimatums and demonstrate in front of the White House, so President Obama decided to defer a final decision until after the election.
Robert J. Samuelson, in the Washington Post, calls the decision to block the pipeline an act of insanity, noting that it is an act of pure symbolism, no utility, not even supposititious enviro-utility is actually thereby served. But reality is never allowed to stand in the way of ideology by this administration.
President Obamaâ€™s rejection of the Keystone XL pipeline from Canada to the Gulf of Mexico is an act of national insanity. It isnâ€™t often that a president makes a decision that has no redeeming virtues and â€” beyond the symbolism â€” wonâ€™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 wonâ€™t get much. Stopping the pipeline wonâ€™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, Obamaâ€™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 Obamaâ€™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, Obamaâ€™s decision forgoes all the projectâ€™s jobs. Thereâ€™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 â€œjob years,â€ 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, itâ€™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.