Obama Is Desperately Trying To Find A Way To Approve The Keystone Pipeline

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Photo: AP Images

On Sunday, the leader of the Canadian Province that is home to “the Saudi Arabia of dirty oil,” Alberta’s tar sands, returned home to Alberta, after spending the weekend in Washington DC, meeting with more than 20 U.S. Senators, plus many state Governors, and with Administration officials.She was lobbying for approval of the Keystone XL Pipeline to be built, to carry this oil onto the global market.

In deciding what to do about the proposed Pipeline, President Barack Obama is caught between two sides. On the one side are environmentalists, such as NASA’s James Hansen who warned about the Canadian tar-sands oil that this Pipeline would transport, “It Will Be Game Over for the Climate” if this Pipeline to a Texas port ever gets built.

On the other side are the Pipeline’s proponents, and they are big and powerful: the American Petroleum Institute, Business Roundtable, U.S. Chamber of Commerce, National Association of Manufacturers, and the other big Republican lobbying organisations, all of which are pouring millions into promoting this – the onlycheap way to transport the world’s dirtiest oil onto the global oil market.

The Premier of Canada’s Province of Alberta, Alison Redford, was visiting Washington in order to lobby these Governors, Senators, “and outgoing U.S. Secretary of the Interior Ken Salazar,” so that President Obama will approve this 25% Koch-owned Pipeline. If the XL Pipeline is approved, it will carry this super-dirty tar-sands oil (virtually liquid coal), all the way from Alberta, to Galveston Texas, for shipment to Europe and to Latin America.

The Koch brothers are expected to earn an additional billion dollars a year if the Pipeline gets built. So, the stakes here are huge: billionaires, on the one side; the public (and actually the entire planet), on the other.

President Obama, in return for allowing this Pipeline to be built, allegedly wants Canada to express an even stronger verbal commitment to oppose global warming than Canada already has verbally done. According to the Calgary Herald, “the United States … is seeking confirmation of Alberta action on the climate change front before it approves the pipeline,” as if mere “confirmation,” or other such verbal assurances, would mean anything in this context.

Obama allegedly wants these verbal assurances not really in order to prevent destruction of the climate by the global release of this extremely carbon-laden tar-sands oil, but rather in order to quell concerns from America’s environmentalists, before he decides whether to grant the go-ahead. He is “expected to rule in the June-to-September time frame whether to green light the project.”  

It has long been known that this Pipeline, while it would add the world’s dirtiest oil to the international oil market, will actually increase oil prices slightly within the United States. On Tuesday 25 January 2011, the AP headlined “Keystone XL May Mean Higher Canadian Crude Prices,” and opened: “TransCanada Corp. said Tuesday that it expects to see an increase in prices for Canadian heavy crude oil in the Midwest if its Keystone XL pipeline is approved. … TransCanada spokesman Terry Cunha said Tuesday that the $3-a-barrel increase is still expected.”

There would be less of a price-hike impact in other areas of the U.S. than the Midwest. Anyway, we’ll be paying more for oil if this Pipeline is built. However, the price of oil in foreign markets would go down very slightly. America’s competitive position would thus actually be hurt by the building of this pipeline. Nonetheless, Obama finds this a difficult decision to make, because the planet, and this country’s competitive position, are evidently not determinative for him.

A study was issued in September 2011, by the Cornell University Global labour Institute, concerning specifically the employment impacts of the proposed Keystone XL pipeline, titled “Pipe Dreams? Jobs Lost,Jobs Gained.” Republicans were saying such things as (House Speaker John Boehner on 10 December 2011) that it “will create tens of thousands of jobs,” but this study (which Republicans ignored) found that “The project will create no more than 2,500-4,650 temporary direct construction jobs for two years.” Furthermore, the allegations by Republicans that spinoff jobs would be far larger were also false. The Conclusion said: “Employment potential from KXL is little to none.”

This study also further documented that the Pipeline would raise U.S. oil prices: “According to TransCanada, KXL will increase the price of heavy crude oil in the Midwest by almost $2 to $4 billion annually. … It will do this by diverting major volumes of Tar Sands oil now supplying the Midwest refineries, so it can be sold at higher prices to the Gulf Coast and export markets. As a result, consumers in the Midwest could be paying 10 to 20 cents more per gallon. … Even one year of fuel price increases as a result of KXL could cancel out some or all of the jobs created by KXL,” and those would be only temporary jobs.

On 7 September 2011, the Nobel Women’s Initiative sent Obama a letter signed by all six female Nobel Peace Prize winners, and by three additional male Nobel Peace Prize winners, urging him “to do the right thing for our environment and reject the proposal to build the Keystone XL” Pipeline, and “to turn your attention back to supporting renewable sources of energy.”

This letter noted that, “another pipeline … built by the same company … already leaked 14 times over its first year of operation,” and that, “Like you, we understand that strip-mining and drilling tar sands from Alberta’s Boreal forests and then transporting thousands of barrels of oil a day from Canada through to Texas will not only hurt people in the US, but will also endanger the entire planet.”

On 16 January 2013, Rob Wile at businessinsider.com bannered “A Major New Oil Pipeline Is Going To Raise Half The Country’s Gas Prices,” and he reported that “Last week, a major new oil pipeline was completed to connect processing facilities in Oklahoma with port refineries near Galveston, Texas, according to Platts. Drillers are celebrating. But many Americans will soon begin to feel some pain at the pump.”

He explained why: “Because of the supply glut [in the U.S.], … states with easy access to Cushing [OK] product, especially in the Midwest, have enjoyed lower prices in recent years,” but that now this oil would be exported and lower world prices a small amount, while it would increase substantially the gas prices in the centre of the U.S. “By the way, analysts also expect something similar if the final section of the Keystone XL Pipeline – which also runs through Cushing – gets built.”

Alberta Canada has invested heavily in tar-sands development, and wants to get its money back. Reuters reported on February 22nd, just before the Premier’s visit, that, “Alberta warned this week that depressed prices for its oil sands crude, due partly to the lack of new pipeline space, could help push this year’s budget deficit to C$4 billion, more than four times higher than initial projections.”

The major lobbyists pushing for Obama to give the Pipeline the go-ahead are the U.S. Chamber of Commerce, the American Petroleum Institute, the National Association of Manufacturers, and the Business Roundtable – all lobbies that overwhelmingly contribute to Republican candidates. In addition, there are labour unions that signed project agreements with TransCanada to participate in the construction of the pipeline, such as the Building and Construction Trades unit of the AFL-CIO.

On 13 November 2011, Henry Blodget at his businessinsider.com headlined “There’s No Way In Hell The Keystone Pipeline Will Create 20,000 Jobs” (as its promoters were claiming), and he linked to numerous sources of documentation, including “a TransCanada executive admitted on camera that permanent jobs would only number ‘in the hundreds.'”

However, key union chiefs had their own personal finances to consider, and the billions of dollars that were behind this campaign constituted lots of “free speech” (to paraphrase the Supreme Court’s Citizens United ruling), and were very persuasive to the people who count. Of course, individuals who didn’t think that the President himself is corrupt might feel confident that Obama wouldn’t partake of any of that. 



Investigative historian Eric Zuesse is the author, most recently, of They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.


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