Eight Reasons to Love the Keystone XL Pipeline

by Marlo Lewis on August 26, 2011

in Features

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The State Department is expected as soon as today to release its final environmental impact statement (FEIS) on the proposed 1,700-mile Keystone XL pipeline to bring up to 850,000 barrels per day (bpd) of Canadian heavy crude from Alberta’s oil sands down to refineries on the U.S. Gulf Coast.

According to anonymous sources at State, the FEIS will confirm the agency’s earlier finding that construction and operation of the pipeline will have “limited adverse environmental impacts,” reports Juliet Eilperin in the Washington Post. This will remove a key obstacle to State issuing an assessment that the pipeline is in the U.S. national interest. Then, presumably, this $7 billion, shovel-ready project could start creating thousands of high-wage jobs.

In July, the House passed H.R. 1938, the North American-Made Energy Security Act, by 279-147. The bi-partisan bill would require President Obama to issue a final order granting or denying a permit to construct Keystone XL by no later than November 1, 2011. The Center-Right is putting pressure on Team Obama, in the run-up to an election year, to expand U.S. access to oil from our friendly, democratic, politically stable neighbor to the north.

At the same time, Eilperin notes, Keystone XL “has strained President Obama’s relationship with his environmental base and become a proxy for the broader climate debate. Protesters from across the country have gathered daily in front of the White House since Saturday, resulting in 275 arrests so far.”

First to be arrested was Canadian actress Margot Kidder, who played Lois Lane in several Superman films. Her top reason for opposing the pipeline: “It’s bound to leak, there’s no way it’s not going to…. They always assure us these things are safe, and they never are.” By that logic, no pipeline should ever be built, and all should be dismantled. And then we could all live in Medieval squalor. Planet Saved!

I’ve been a Keystone booster for some time, but the fracus at the White House has taught me new reasons to love the pipeline.

Here are my original reasons for loving Keystone XL:

  1. Keystone XL is totally market-driven. This $7 billion shovel-ready project will be funded entirely by private investment. Taxpayers will not be on the hook for any new government spending or loan guarantees.
  2. Keystone XL will help alleviate pain at the pump. As the Perryman Group explains, a stable expectation of “incremental supplies from reliable sources leads to lower costs, thereby putting downward pressure on prices.” Or, as James Burkhard of IHS Cambridge Energy Research Associates puts it, “A more flexible and robust supply system is better able to manage supply and demand developments, which is a big positive for the U.S. economy and consumers.”
  3. Keystone XL will help stabilize gasoline prices. As former Canadian Energy Minister Murray Smith observes, unlike tanker oil, which may be traded several times and marked up by speculators, the price of pipeline oil is mostly fixed at the start of its journey to the refinery.
  4. Keystone XL will stimulate the ailing U.S. economy. The Perryman Group estimates the pipeline will induce $20.9 in new business expenditures, add $9 billion to U.S. GDP, increase personal incomes by $6.5 billion, generate $2.3 billion in retail sales, and create 118,935 person years of employment.
  5. Keystone XL will enhance U.S. energy security. It will deliver up to 850,000 bpd of crude from a friendly, stable, democratic neighbor. Every barrel of oil we import from Canada is a barrel we don’t have to import from despotic, unfriendly, or volatile countries like Saudi Arabia, Venezuela, or Nigeria.

Here are my new reasons:

  1. A win for Keystone XL is a defeat for the global warming movement. Green groups view Keystone as an opportunity to regain momentum and offset their losses after the death of cap-and-trade. If friends of affordable energy win this fight, which seems likely, the greenhouse lobby will take another hit to its prestige, morale, and influence.
  2. Keystone XL strains relations between Obama and his environmentalist base. If Obama approves the pipeline, greenies will be less motivated to work for his re-election. If he disapproves, Republicans and moderate Democrats will hammer him for killing job creation and increasing pain at the pump. Either way, the prospects for new anti-energy legislation should be dimmer.
  3. Keystone XL is bringing aging, New Lefties out of the woodwork, where they can misbehave and get themselves arrested.



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