When Republicans in Congress finally passed a bill extending the payroll tax cut in December, they booby-trapped it with an unrelated provision. The bill required President Barack Obama to decide within sixty days whether to allow construction of a seventeen-hundred-mile oil pipeline that would run from the tar sands of western Canada to refineries on the Gulf Coast. In January the president wisely accepted the State Department’s recommendation that the project be rejected, at least for now. He argued that the “rushed and arbitrary” congressional deadline did not give the government enough time for a thorough study of the pipeline’s environmental impact.
The president was half right: the deadline was indeed rushed, but it wasn’t exactly arbitrary. In fact, it was carefully chosen to give Republicans an occasion for facile outrage in an election year. A spokesman for House Speaker John A. Boehner (R-Ohio) said the president “is about to destroy tens of thousands of American jobs and sell American energy security to the Chinese.” Republican presidential candidate Mitt Romney claimed the decision was “as shocking as it is revealing.... If Americans want to understand why unemployment in the United States has been stuck above 8 percent for the longest stretch since the Great Depression, decisions like this one are the place to begin.” After the president announced in November—before Congress enacted the deadline—that a final decision about the pipeline would not be made until 2013, Texas Governor (and former presidential candidate) Rick Perry was so indignant that he annexed our neighbors to the north: “Every barrel of oil that comes out of those sands in Canada is a barrel of oil that we don’t have to buy from a foreign source.” You’re welcome, Canada.
Of course, the president’s decision didn’t really “destroy” any jobs. It didn’t even prevent “tens of thousands” of new jobs from being created. Experts say the Keystone XL pipeline would generate at most six thousand jobs, many of them temporary. As for American energy security, that has more to do with how much oil Americans use than with where it comes from. Most of the world’s oil is sold to the highest bidder; prices are determined by demand, not geography. As Michael Levi, a senior fellow at the Council on Foreign Relations, has pointed out in the Washington Post, “oil prices depend on how much oil is produced—not who sells to whom.... What ultimately matters to our economy is not whether the United States or China buys oil from Canada—it’s whether Canada produces and sells that oil at all.” Oil from the proposed pipeline might be refined in Texas, but much of it would be sold overseas. That’s how the oil industry works, as the governor of Texas ought to know.
Canada has 174 billion barrels of proven oil reserves—only Saudi Arabia has more—and, according to the Canadian government, 170 billion of those barrels are in the tar sands of Alberta. To extract oil from those sands and turn it into gasoline is a dirty process, requiring between 5 and 15 percent more greenhouse gas emissions than the production of gasoline from conventional oil. One leading climate scientist has warned that if the Keystone pipeline is built, “essentially, it’s game over for the planet.” That may be hyperbole, but the pipeline would certainly be a step in the wrong direction: toward greater reliance on fossil fuels and away from the development of alternative sources of energy. Because tar-sand bitumen contains benzene, arsenic, and other toxins, the pipeline could also threaten the water supply of several states in the Midwest, which is why the project has been opposed not only by environmentalists but also by ranchers and farmers.
TransCanada, the corporation that wants to build the pipeline, is not about to give up. Its CEO says the company plans to reapply for a permit, and he expects the U.S. government to expedite its review process so that he can have the pipeline in service by 2014. Given the oil industry’s power in Washington, this is not an unreasonable hope. Despite celebrations on the left and lamentations on the right, the president’s decision may end up only delaying the $7-billion project, not stopping it. Still, a delay is better than nothing. It will give independent experts a chance to finish their assessment of the pipeline’s impact without undue haste, and it will give citizens another chance to mobilize against an industry that is too accustomed to buying whatever political support it needs. Now that the federal government has learned to tell Big Oil “not yet,” maybe it can learn to tell it “no.”