The Keystone XL Test

Mark Green
Posted November 14, 2014

Friday’s bipartisan U.S. House vote to advance the Keystone XL pipeline, the ninth time the House has voted to support the project, sets up next week’s expected vote in the Senate – and most likely a big decision point for President Obama. API President and CEO Jack Gerard:

“The strong, bipartisan support for the Keystone XL pipeline demonstrates lawmakers from both parties in the House, as well as the Senate, are listening to the American people. A vote for KXL tells Americans their jobs matter, their futures matter and that our nation’s energy and national security are a clear priority.”

Now the question: Is President Obama listening?

If he is he will decide to agree with the 72 percent of American voters who supported Keystone XL in a recent survey. In doing so he would be deciding in favor of job creation, infrastructure spending and greater U.S. energy security – and he would end more than six years of federal review.

Yet, the president could decide otherwise, that he’s with the 19 percent in that recent poll that opposes Keystone XL. In that case he would be deciding for less of all of the above.

President Obama says he’s for trade, jobs and greater opportunity for Americans, which everyone can support. From Asia, the president talked this week about working toward those goals with Republicans, who in January will control both houses of Congress. ABC News quotes the president:

“They're interested in promoting trade that will create jobs and opportunity for US workers and US businesses? All over it. It's part of what this Asia trip's been all about. They're interested in rebuilding our roads, our bridges, our ports, our airports, putting people back to work, making sure we're competitive. I'm game.”

Unfortunately, the president also said things about Keystone XL – things that squarely contradict his stated support for trade, jobs and more opportunity for Americans. He sounded some of the talking points of those whose views on the pipeline are clearly out of step with the vast majority in this country:

“Understand what this project is: It is providing the ability of Canada to pump their oil, send it through our land, down to the Gulf, where it will be sold everywhere else. It doesn't have an impact on US gas prices.”

Here the president is simply wrong about Keystone XL, trade with Canada and the effect that increased supplies of North American crude oil have on the global cost of crude, to the benefit of U.S. consumers at this very moment.

In a couple of recent posts we’ve discussed the benefits of trade with Canada, our No. 1 source of imported oil. These trade benefits include tens of thousands of U.S. jobs supported because of the relationship – U.S. exports to Canada as well as the import of Canadian goods, including crude oil.

Trade with Canada also means support for our economy. According to the U.S. Census Bureau, in 2013 U.S. goods imports from Canada  – including oil – totaled more than $332.5 billion, $54.9 billion higher than in 2010. Goods exports to Canada in 2013 totaled $301.6 billion, $52.3 billion higher than in 2010. For every dollar spent on increased goods imports from Canada, the United State received 95 cents in return via goods exports to Canada.

Bottom line: When the president dismisses the Keystone XL as a transporter of “Canadian oil,” he displays a misunderstanding of the value of free trade with America’s best trading partner – to our economy, to jobs here at home and for America’s energy security. (He also misses the fact that about 25 percent of the oil Keystone XL would bring to our refineries would come from the U.S. Bakken region.

America deserves better energy leadership from this president. His latest words on Keystone XL aren’t the words of a pro-energy, pro-jobs, pro-trade president. They echo the positions of an extreme, anti-American energy, anti-jobs, anti-growth, anti-progress agenda that’s wholly disconnected from marketplace realities, the United States’ security priorities in a complex, ever-changing world and the needs and wishes of most Americans.

We’ve said that Keystone XL would be a test for the president, testing whether he will advance bipartisanship and sound energy policy, and whether he will work for the interests of most Americans. Gerard:

“Mr. President, do not outsource the 42,000 American jobs this pipeline represents, to move Canadian and U.S. energy resources from North Dakota and Montana, to U.S. refineries on the Gulf Coast. … The House today passed a job-creating infrastructure bill that aligns with the president’s own jobs plan, and the Senate will almost certainly pass an identical bill next week. Five affirmative reviews from the State Department, and strong majority support among voters of every party, give the president a glide path to an easy yes on KXL. Americans are embracing our domestic energy renaissance but they can't fully benefit from it unless there is a robust infrastructure system to transport the fuels they demand. The president said he heard the voters last week. If he did, American workers and consumers could have a lot to be thankful for this Thanksgiving.”