President Obama’s decision to reject the application of Canadian firm TransCanada to build the Keystone XL pipeline drew harsh criticism from GOP primary candidates, especially Mitt Romney. As Felicia Somnez reported:
Mitt Romney’s response to the Obama administration’s decision to deny a permit for the construction of the Keystone XL oil sands pipeline?
The move is ”as shocking as it is revealing.”
“It shows a President who once again has put politics ahead of sound policy,” the former Massachusetts governor and GOP presidential frontrunner said in a statement Wednesday afternoon. “If Americans want to understand why unemployment in the United States has been stuck above 8 percent for the longest stretch since the Great Depression, decisions like this one are the place to begin.”
In announcing the decision, President Obama said the government did not have enough time to review the oil pipeline, which would have crossed the United States from Canada to Texas. The administration will allow builder TransCanada to reapply for a permit after it alters the route to sidestep Nebraska’s Sandhills.
Romney echoed congressional Republican criticism by charging that the move to deny the pipeline permit was based on political rather than policy calculations.
“By declaring that the Keystone pipeline is not in the ‘national interest,’ the president demonstrates a lack of seriousness about bringing down unemployment, restoring economic growth, and achieving energy independence,” Romney said. “He seems to have confused the national interest with his own interest in pleasing the environmentalists in his political base.”
Industry lobbying groups and environmentalists are battling over the pipeline. There are many misconceptions about its impact both on domestic energy prices and the environment. As Michael Levi wrote:
Is the decision a boon for the environment or a slap at an already weak economy? Let’s separate fact from fiction.
1. The pipeline would have been catastrophic for global climate change.
For opponents of the Keystone XL pipeline, the issue was one of simple math: The project would have facilitated increased production of Canadian oil sands, and a gallon of gasoline derived from oil sands produces 5 to 15 percent greater greenhouse gas emissions than a gallon of gasoline made from a typical barrel of conventional oil. Also, they noted, Canada’s oil sands are the second-largest petroleum deposit in the world, and if burned completely, it would have been “game over” for the planet’s fight against climate change, in the words of NASA scientist James Hansen, a leading climate specialist.
That is all technically true — but it misses the point. The additional emissions generated by replacing conventional oil with the crude that the pipeline could have carried would have been no more than a small fraction of 1 percent of total annual U.S. greenhouse gas pollution. Meanwhile, it would take more than 1,000 years to burn all the oil sands, even if extraction were ramped up threefold from its current pace. The fate of the climate will be determined long before that.
2. The pipeline would have reduced U.S. reliance on oil from the Middle East.
Worries about dependence on Middle Eastern oil have long animated U.S. energy policy — and the Keystone XL pipeline would have transported almost as much oil each year as the United States currently imports annually from Saudi Arabia.
But U.S. vulnerability to turmoil in the Middle East is linked to how much oil we consume, not where we buy it from. The price of oil is set on world markets: When convulsions in Libya sent the price of crude up 30 percent last year, prices for Canadian heavy oil (similar to what is produced from oil sands) rose by nearly 55 percent.
Some pipeline proponents also pointed out that Canadian oil currently sells at a discount compared with oil supplies from the rest of the world. Keystone XL, however, wouldn’t have led Canada to start offering greater amounts of crude at reduced prices — instead, Canadian producers would have gained more leverage and would have been able to sell their oil at the world price.
According to some, President Obama’s decision will be a boon for the GOP, which can use the decision to criticize him on energy policy. As Jennifer Rubin wrote in her opinion blog Right Turn:
President Obama’s decision to block the Keystone XL pipeline puts in perspective the misstep by House Republicans at the close of the year. It’s hard to even remember the rotten reviews House Republicans got for initially refusing and then agreeing to the Senate’s two-month payroll tax cut extension. But the Republicans did keep language forcing the president to make a decision on the project before November, and his rejection is being greeted with glee by Republicans.