Keystone, Our Missed Opportunity

Jon Kyl, November 30, 2011

Earlier this year, President Obama delivered a speech at Georgetown University where he bemoaned our continued reliance on oil imported from the Middle East and unsavory regimes. "Politicians of every stripe have promised energy independence, but that promise has so far gone unmet," he said. "That has to change."

Of course, most Americans would like to reduce the extent to which we must look to a very unstable part of the world for the energy that runs our cars and heats our homes. But dig deeper, of course, and thereís a difference between the president saying he wants to do something and then actually putting the policies in place to make it happen. On that front, the president recently fumbled a no-brainer that could have moved us closer to meeting this objective.

In 2008, the TransCanada oil company applied for government permission to construct the Keystone XL project, a pipeline that would transport 830,000 barrels of oil per day from the Canadian province of Alberta to refineries in the southern United States. According to the Congressional Research Service, the pipeline would also provide a boost to our economy of up to $600 million per year and create as many as 343,000 U.S. jobs. The State Department had planned to make a final decision by the end of this year, and all signs pointed to an easy approval. That is, until November 10, when the Obama Administration announced that it would delay making a decision on the pipeline until -- conveniently enough -- right after the 2012 presidential election.

The problem is, by then it may be too late.

Canadian Prime Minister Stephen Harper said the presidentís decision had caused "extremely negative reactions," and indicated that his government might be forced to simply reroute the oil to be sent to China instead. This is concerning for numerous reasons. Not only might we now miss out on this important opportunity to secure more North American oil from a friendly neighbor -- oil thatís likely going to be extracted whether we take it or not -- but we may have just needlessly forfeited a strategic resource to China and, in the process, greatly disappointed the most staunchly pro-American neighboring leader weíve seen in decades.

It is very difficult to see a viable policy reason for the delay. Indeed, as Obama said in the same Georgetown speech, "when it comes to the oil we import from other nations, obviously weíve got to look at neighbors like Canada," which he called a "stable and steady and reliable" source. Moreover, environmental concerns had mostly been addressed and waved off by the experts. As a columnist recently put it in The Washington Post, "[The State Department] had subjected Keystone to three years of review -- the most exhaustive study of any oil pipeline in U.S. history -- and twice concluded in voluminous studies that there would be no significant environmental harm."

The presidentís stated goal of increased stability in our energy supply is one that I share. But, by putting on ice one of the most promising projects in years with a friendly, democratic neighbor like Canada, the president doesnít seem serious about the goal. And it is no answer to simply point to so-called alternative forms of energy; even aggressive estimates tell us that these sources will, at best, take decades to make any real impact on U.S. energy supply. Moreover, most of these alternatives generate electricity -- they donít power the vehicles that most of us drive.

So, we should get serious about developing more resources closer to home. In these times of high unemployment, large budget deficits and uncertainty abroad, America needs policies that will lower fuel prices, provide more revenue to the Treasury, enhance our energy security, and put thousands of Americans back to work.

The Keystone XL pipeline is just such a policy, and it should be promptly approved and constructed.

Senator Jon Kyl, a Republican, represents Arizona in the U.S. Senate. He serves on the Senate Judiciary Committee, the Finance Committee, and the Energy and Natural Resources Committee.

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