The People of America's Oil and Natural Gas Indusry

The President and Keystone XL: No Laughing Matter

Mark Green

Mark Green
Posted December 11, 2014

Near the end of his appearance on the “Colbert Report” earlier this week, President Obama tells host Stephen Colbert that getting things done is the real satisfaction he takes from his job:

“I love the job, and it’s an incredible privilege. But when you’re in it you’re not thinking about it in terms of titles. You’re thinking about how do you deliver for the American people?”

Ironically, the remark about delivering for the American people comes just a few minutes after the president offers up familiar excuses for failing to deliver for the American people on the Keystone XL pipeline. With Americans backing the pipeline by more than 3 to 1, it looks like President Obama isn’t listening to the people he’s supposed to serve – or is simply ignoring them.

The president’s Keystone XL rhetoric remains starkly at odds with the facts – including those proffered by his own State Department. State has completed five separate environmental reviews on Keystone XL over more than six years, all of which cleared by the pipeline. Whether President Obama is talking to business executives or cutting up with Colbert, he’s startlingly disconnected with fact on Keystone XL. Let’s look at a couple of examples.

Job creation – As he has other times, the president used his Colbert appearance to dismiss Keystone XL’s job-creating potential, saying the project’s environmental performance must be weighed against the “amount of jobs it’s actually going to create, which aren’t a lot.”

What would the president consider “a lot” of jobs? His State Department says the project would support more than 42,000 jobs during its construction phase, generate $2 billion in workers’ earnings and add $3.4 billion to the U.S. economy.

Sounds like a lot, and others agree. The Washington Post’s Fact Checker chided the president for “low-balling” Keystone XL’s job potential and for relying on the talking points of a group that doesn’t want the pipeline built. The Fact Checker:

Ordinarily, we would expect the president to cite an estimate from his own State Department, rather than a think tank opposed to the project.

falseLikewise, the Tampa Bay Times’ PolitiFact rated the president’s Keystone XL jobs statement “false.” It  noted that the State Department included part-time jobs and “folds in the ripple effects as spending moves throughout the economy…” In other words, State’s estimate reckons the real-world economic and job-creating impact of an infrastructure project the size of Keystone XL.

We’ve posted before on the reaction of America’s working men and women to the president’s statements on Keystone XL – especially his dismissiveness of construction jobs as temporary jobs. International Brotherhood of Teamsters General President James P. Hoffa in a piece for the Detroit News:

It is understandable that many elected officials have wanted to move forward with care on the Keystone XL pipeline. But enough is enough. Seven years of review by 10 federal agencies, as well as numerous state and local agencies, is sufficient. Keystone has had the most exhaustive review and analysis of any infrastructure project in U.S. history. … There are even more positives, as the pipeline would allow greater oil security for North America and make us rely less on other oil-rich parts of the world, where conflict continues to reign. That shouldn’t be discounted. America needs more good-paying jobs that support middle-class families. This project supplies them.

Canadian oil passing throughEarlier in his exchange with Colbert, President Obama says that the pipeline will funnel Canadian crude oil through the United States so it can be exported to other countries, suggesting little or no benefit for the U.S. The president:

Essentially, it’s Canadian oil passing through the United States to be sold on the world market. It’s not going to push down gas prices here in the United States. It’s good for Canada.

Setting aside the demonstrated benefits to the United States of maintaining a robust trading relationship with Canada, our neighbor and ally (detailed here and here), President Obama is either misinformed or deliberately misstating things when he says Keystone XL is an export pipeline. The Post’s Fact Checker recently evaluated this assertion, rating it Three Pinocchios on Fact Checker’s four-Pinocchio scale:

three… the president leaves out a very important step. The crude oil would travel to the Gulf Coast, where it would be refined into products such as motor gasoline and diesel fuel (known as a distillate fuel in the trade). As our colleague Steven Mufson reported more than two years ago, the refineries in the Gulf Coast are “eagerly waiting” for the Canadian crude, since there isn’t enough oil in the area anymore to feed the refineries …

Indeed, the State Department’s final environmental impact statement on the Keystone XL project specifically disputed claims that the oil “would pass through the United States and be loaded onto vessels for ultimate sale in markets such as Asia,” saying it was not economically justified. … In Obama’s telling, however, the refined Canadian oil goes “everywhere else” and “not to the United States.”  But that’s not right either, according to the State Department report. U.S. exports are not affected by various pipeline scenarios but instead by market conditions, such as “domestic demand versus domestic refining capacity, the cost of natural gas, and refining capacity abroad, including in foreign markets currently importing U.S. refined products such as Mexico, Brazil, Chile, and Europe,” the report said. The demand for exports, in other words, is completely unrelated to building the Keystone XL pipeline.

The president seriously overstates the percentage of Canadian crude that might be exported if the Keystone XL pipeline is built. He suggests all of it would be exported, without mentioning that it first would stop in the Gulf Coast to be refined into products. On top of that, current trends suggest that about one-third of that refined product would be exported. … All of this is laid out in the extensive report issued by the State Department earlier this year. The president might want to study it before he addresses the Keystone question again.

Looks like the president didn’t follow through on the study advice. Instead, he continues to distort and dither, holding up a shovel-ready infrastructure project – the kind he is always talking about as good for America. Along with it, President Obama is holding up job creation, economic growth and greater energy security through a stronger relationship with Canada.

Keystone XL would be part of a broader energy strategy in which the U.S. could see 100 percent of its liquid fuel needs met by North American sources in about 10 years. The pipeline and other infrastructure projects are essential to an American energy revolution that is creating jobs, stabilizing prices, boosting manufacturing and improving our balance of trade

The president should heed U.S. voters who last month called for an end to petty political fights and a renewed focus on jobs and the economy.  As LIUNA President Terry O’Sullivan put it:

The majority of Democrats in the Senate and the White House just don’t get it, even though the recent election results surely should have sunk in by now. They have lost their way, their purpose and their base.  Americans want action, they want jobs and they want leadership.

Indeed they do.

ABOUT THE AUTHOR

Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.