President Rejects Keystone XL, America Loses

Mark Green
Posted November 6, 2015

With President Obama’s unfortunate decision to reject the Keystone XL pipeline, look for a number of reports and analyses advancing the notion that the president’s decision is a “stunning defeat” for our industry, Canada and members of Congress who support the project. We disagree.

Canadian oil sands development that Keystone XL would have helped facilitate will continue. As an IHS study detailed earlier this year, oil sands production is critically important to North American supply and U.S. security, and it will go on – as will efforts to get Keystone XL off the drawing board, built and operating – creating jobs and increasing energy security.

The real defeat in the president’s decision has been inflicted on the American people. It’s their present and future that have been dealt a severe blow by a White House that ultimately valued out-of-the-mainstream political interests over the national interest. This is clear from strong, bipartisan support for Keystone XL substantiated in recent polling:

These numbers show that after more than seven years of studying the Keystone XL project – during which President Obama had to know that upwards of seven in 10 Americans support the pipeline’s construction – the president decided to stand with the two in 10 opposed to it.

The president chose the politics of a few over sound science and fundamental economics, ideology over the national interest, to cause a stunning defeat for the United States, American energy security and America’s energy partnership with Canada – and a stunning victory for countries like Venezuela, which will benefit from the U.S. saying no to the oil Keystone XL would bring from Canada and the U.S. Bakken region. API President and CEO Jack Gerard discussed these issues during a conference call with reporters:

“It is an understatement to say that we are disappointed by today’s decision. The bigger disappointment and loss is being felt today by our nation’s workers who have been awaiting these well-paying jobs, and American consumers who will instead rely upon oil from less stable regions of the world … This decision will cost thousands of jobs. It’s an assault on American workers. It’s politics at its worst.”

Gerard, who was joined on the call by Sean McGarvey, president of North America’s Building Trades Unions, said President Obama put “extreme ideology over American opportunity” by rejecting Keystone XL:

“Five of his own administration’s reviews have determined the project to be safe and environmentally sound, yet the administration has turned its back on our closest ally and trading partner in favor of professional activists who are advocating a ‘leave it in the ground’ approach to energy. It’s ironic that the administration would strike a deal to allow Iranian crude onto the global market while refusing to give our closest trading partner, Canada, access to U.S. refineries.”

Specifically, the president’s denial of Keystone XL denies these benefits, as detailed in a State Department review of the project:

• About 42,000 jobs created during Keystone XL’s construction phase
• Approximately $2 billion in earnings throughout the U.S.
• Contribution of about $3.4 billion to U.S. gross domestic product

McGarvey said unemployment in the construction sector remains in the double digits and that the 3 million men and women in the U.S. and Canada represented by his union need the jobs Keystone XL would generate:

“We just do not quite understand why it took seven years to come to this decision. … If you can’t build that pipeline, how can you build any energy infrastructure in this country? … These jobs were still critical for our membership and their families to maintain their place in the middle class. At this point, it’s sad to say, we’re out of hope.”

Gerard said there is a leadership void created by the president’s handling of Keystone XL. He said it will hinder private investments in other energy infrastructure projects the country needs – estimated at $1.1 trillion over the next decade by IHS. Gerard:

“This has a chilling effect on all those other investments, because they’re now not confident that the administration will adhere to the law and the requirements [to] look at the national interest of these projects. … At a time when our nation needs leadership to secure America’s position as a global energy superpower, through commitment to U.S. resources and infrastructure, the administration has chosen to delay, defer and now defeat a critical energy project that serves the interest of our nation, our workers and our families.”

The Keystone XL fight will go on. As Gerard said, the American people – 71 percent of whom said in a recent poll that they’re more likely to back a political candidate who supports producing more oil and natural gas here at home – will decide whether decisions like the president’s on Keystone XL will go unchallenged:

“Voters sizing up the candidates for 2016 are looking for true leadership on energy issues because energy affects our daily lives from how much we pay at the pump to the plastics in our smart phones and the performance of our retirement accounts. … We look at this from an American perspective, American worker opportunity perspective. We work together. There are no divides, partisanship, no Republicans, no Democrats. This is all about America. … Extreme ideologies shouldn’t prevail over American opportunity.”