Rejecting the Keystone pipeline is an act of insanity

Posted by on Jan 20, 2012 at 8:24 am

Finally, Obama’s decision forgoes all the project’s jobs. There’s some dispute over the magnitude. Project sponsor TransCanada claims 20,000, split between construction (13,000) and manufacturing (7,000) of everything from pumps to control equipment. Apparently, this refers to “job years,” meaning one job for one year. If so, the actual number of jobs would be about half that spread over two years. Whatever the figure, it’s in the thousands and thus important in a country hungering for work. And Keystone XL is precisely the sort of infrastructure project that Obama claims to favor.

The big winners are the Chinese. They must be celebrating their good fortune and wondering how the crazy Americans could repudiate such a huge supply of nearby energy. There’s no guarantee that tar-sands oil will go to China; pipelines to the Pacific would have to be built. But it creates the possibility when the oil’s natural market is the United States.

There are three things to remember about Keystone and U.S. energy policy.

First, we’re going to use lots of oil for a long time. The U.S. Energy Information Administration (EIA) estimates that U.S. oil consumption will increase 4 percent between 2009 and 2035. The increase occurs despite highly optimistic assumptions about vehicle fuel efficiency and bio-fuels. But a larger population (390 million in 2035 versus 308 million in 2009) and more driving per vehicle offset savings.

The more oil we produce domestically and import from neighbors, the more we’re insulated from dramatic interruptions of global supplies. After the United States, Canada is the most dependable source of oil — or was, until Obama’s decision.

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