ON TUESDAY, President Obama’s Jobs Council reminded the nation that it is still hooked on fossil fuels, and will be for a long time. “Continuing to deliver inexpensive and reliable energy,” the council reported, “is going to require the United States to optimize all of its natural resources and construct pathways (pipelines, transmission and distribution) to deliver electricity and fuel.”
It added that regulatory “and permitting obstacles that could threaten the development of some energy projects, negatively impact jobs and weaken our energy infrastructure need to be addressed.”
Mr. Obama’s Jobs Council could start by calling out . . . the Obama administration.
On Wednesday, the State Department announced that it recommended rejecting the application of TransCanada Corp. to build the Keystone XL oil pipeline, and Mr. Obama concurred. The project would have transported heavy, oil-like bitumen from Alberta — and, potentially, from unconventional oil deposits in states such as Montana — to U.S. refineries on the Gulf of Mexico coast.
Environmentalists have fought Keystone XL furiously. In November, the State Department tried to put off the politically dangerous issue until after this year’s election, saying that the project, which had undergone several years of vetting, required further study. But Republicans in Congress unwisely upped the political gamesmanship by mandating that State make a decision by Feb. 21. Following Wednesday’s rejection, TransCanada promised to reapply — so the administration has again punted the final decision until after the election.
We almost hope this was a political call because, on the substance, there should be no question. Without the pipeline, Canada would still export its bitumen — with long-term trends in the global market, it’s far too valuable to keep in the ground — but it would go to China. And, as a State Department report found, U.S. refineries would still import low-quality crude — just from the Middle East. Stopping the pipeline, then, wouldn’t do anything to reduce global warming, but it would almost certainly require more oil to be transported across oceans in tankers.
Environmentalists and Nebraska politicians say that the route TransCanada proposed might threaten the state’s ecologically sensitive Sand Hills region. But TransCanada has been willing to tweak the route, in consultation with Nebraska officials, even though a government analysis last year concluded that the original one would have “limited adverse environmental impacts.” Surely the Obama administration didn’t have to declare the whole project contrary to the national interest — that’s the standard State was supposed to apply — and force the company to start all over again.
Environmentalists go on to argue that some of the fuel U.S. refineries produce from Canada’s bitumen might be exported elsewhere. But even if that’s true, why force those refineries to obtain their crude from farther away? Anti-Keystone activists insist that building the pipeline will raise gas prices in the Midwest. But shouldn’t environmentalists want that? Finally, pipeline skeptics dispute the estimates of the number of jobs that the project would create. But, clearly, constructing the pipeline would still result in job gains during a sluggish economic recovery.
There are far fairer, far more rational ways to discourage oil use in America, the first of which is establishing higher gasoline taxes. Environmentalists should fight for policies that might actually do substantial good instead of tilting against Keystone XL, and President Obama should have the courage to say so.