Sen. Wyden’s Anti-Keystone Amendment Goes Down in Flames

by Marlo Lewis on March 8, 2012

in Blog, Features

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The Senate just voted down two highway bill amendments on the Keystone XL Pipeline: the Hoeven amendment to permit the pipeline (56-42) and the Wyden amendment prohibiting exports of Keystone crude and petroleum products made from it (34-64). Both amendments required 60 votes for passage. Hoeven’s amendment missed by four votes, Wyden’s by 26.

Eleven Democrats voted for Hoeven’s amendment: Kay Hagan (N.C.), Joe Manchin (W.Va.), Mary Landrieu (La.), Jim Webb (Va.), Claire McCaskill (Mo.), Mark Pryor (Ark.), Jon Tester (Mont.), Mark Begich (Alaska), Bob Casey (Pa.), Kent Conrad (N.D.) and Max Baucus (Mont.). Bottom line: There is now clear majority support in both the House and Senate for expeditious approval of the Keystone XL Pipeline.

As this blog has argued previously, proposals like Wyden’s to ban exports of U.S. petroleum products would violate U.S. treaty obligations under the General Agreement on Tariffs and Trade (GATT) and the North American Free Trade Agreement (NAFTA).

Wyden claims an export ban would increase domestic supplies of gasoline and diesel fuel and, thus, lower prices, benefiting consumers. But the ban would likely backfire, increasing pain at the pump. It would drive refining-related investment, production, and jobs out of the USA, curbing production at home while making higher-priced foreign imports more competitive.

Banning petroleum product exports is also just plain dumb if you’re one of those people — like Wyden — who deplore America’s trade deficit with China. Well, okay, what Wyden deplores most (or only) is America’s trade deficit in “environmental goods” like solar panels. If you don’t understand the economic logic behind this selective indignation, it’s because there is none.

Gross self-contradiction is not uncommon in politics, but the angst and handwringing over Keystone XL as an “export pipeline” by many self-styled trade hawks is material suitable for a Monty Python skit. In the meantime, sober commentary will have to do. ExxonMobil’s Ken Cohen hit the key points in a recent post.  

From Cohen’s article:

What is a surprise is that commentators like [Bill] O’Reilly would choose to criticize the export of gasoline and diesel instead of treating them like any other U.S. exports – exports that are typically celebrated by policymakers and commentators as examples of U.S. economic capacity and strength in a competitive global economy.

In fact, in 2010 President Obama set a national goal of doubling exports of products “Made in America” by 2015. One of the reasons that the nation is still on track to achieve this goal is that petroleum products were a top U.S. export in 2011.

“More exports mean more jobs,” President Obama said just last week in his weekly address at a Boeing plant in Washington. “We know what we need to do. We need to strengthen American manufacturing. We need to invest in American-made energy and new skills for American workers.”

Furthermore, in the Economic Report from the President released a few days ago, the White House touted the fact that “the growth of U.S. exports over the past year has been a particular bright spot” in the economy – and it recognized the positive role petroleum product exports have played in this growth.

“Many factors are contributing to this fast pace of growth, including continued productivity growth in manufacturing, a shift in unit labor costs that favors U.S. businesses over those in other advanced countries, and technological innovation in the energy sector, which is improving America’s trade balance in petroleum products,” the report said.

In every sector of the U.S. economy, you hear about the importance of exports and trade balances. You certainly don’t hear calls to restrict the export of U.S. cars as a means to reduce the price of buying a new car; so why apply such flawed logic to gasoline and diesel?


kafantaris March 9, 2012 at 9:50 pm

The Wyden Amendment makes sense. If we would be taking the risk of an oil spill on our homeland from the Keystone XL Pipeline, then all the oil it transports should stay here. And the pipeline should be built and be maintained by American workers — with American made materials.
Otherwise, we would be relegating our land to be a 30 year stepping stone for Canada to transport its dirty oil to foreign markets.
Moreover, the Wyden Amendment should be used as a model for all offshore and public land drilling. If our country incurs the long term risk of a spill, then it should also get the maximum benefit.
The “free market” will have to take a back seat on this one.
Our environment ain’t free — even to the free market.

Gary Meyers March 9, 2012 at 10:07 pm

Why does it not take a simple majority to pass? Were there any Republicans who voted against it?

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