The Wall Street Journal reports on how Obama’s Environmental Protection Agency is trying to block a pipeline from Alberta that would create 100,000 jobs and lower oil prices at the pump.
With 9.1% unemployment and gasoline prices in the stratosphere, President Obama must sometimes wish that some big corporation would suddenly show up and offer a shovel-ready, multibillion-dollar project to create 100,000 jobs and reduce U.S. reliance on oil from dictatorships.
Oh, wait. His Secretary of State has had that offer sitting on her desk since she was sworn in. The trouble is that the Administration can’t approve it without upsetting its anti-fossil fuel constituency. And so the proposal sits.
In September 2008 TransCanada applied to build a new pipeline—the Keystone XL—to bring diluted bitumen from the oil-rich tar sands of Alberta to thirsty American refineries on the Gulf Coast. It is hardly a radical proposal. Canadian crude has been flowing to the U.S. for decades. Another Canadian company—Enbridge—operates the Clipper pipeline across the Canadian border to Chicago. In July 2010 TransCanada began operating its Keystone pipeline from Alberta to Cushing, Oklahoma, which is a major storage and pricing depot.
The Keystone XL would cut a slightly different path, through the American heartland to Port Arthur, Texas. Judging from its past experience and that of Enbridge, TransCanada expected that permitting would take roughly 23 months. Thirty-three months, two State Department studies and 208,000 public comments later, TransCanada is still waiting. On current trend, the company will be lucky to get its permit by January, or after 40 months. But even that is far from certain.
If Mr. Obama were drawing up a plan from scratch to boost union employment and deflate Iranian-ally Hugo Chávez of Venezuela, it might look like the Keystone XL. TransCanada estimates that building the pipeline will mean more than $20 billion—$13 billion from TransCanada itself—in investment and 13,000 new American jobs in construction and related manufacturing. The company also expects more than 118,000 “spin-off” jobs during the two years of construction.
TransCanada says it has signed building contracts with four major U.S. unions. It projects that construction will generate $600 million in new state and local tax revenue and that over its life the pipeline will generate another $5.2 billion in property taxes. The Energy Policy Research Foundation in Washington estimates that by linking to the XL, oil producers in North Dakota’s Bakken region will enjoy efficiency gains of between $36.5 million and $146 million annually. Lower transport costs will mean savings for Gulf Coast refiners of $473 million annually if the pipeline meets conservative expectations of shipping 400,000 barrels per day.
Today those refineries are highly dependent on imports from Mexico and Venezuela, which have decreased output in recent years. TransCanada would help to provide Gulf Coast refiners with a more reliable source of supply from a U.S. ally.
Obama wants to create jobs – he just wants to create jobs in Mexico, Venezuela and the Middle East.