David Holt

The decision to shudder the Keystone XL pipeline makes little sense. The President rejected the proposal on the grounds there wasn’t enough time to assess its environmental impact shortly after a three year review by the State Department found the project would “ be the safest in the history of constructed pipelines”.

In addition, the pipeline enjoys strong bi-partisan congressional support and the backing of influential groups like the U.S. Chamber of Commerce and the Laborers International Union of North America. Adding to this, recent polls indicate over 70 percent of Americans support the pipeline’s completion. This widespread acceptance exists because the undertaking would create over 20,000 jobs, provide a reliable source of energy from a trusted ally, and would limit our exposure to price shocks emanating from constrained oil supplies on the global market-like those occurring now.

All of these facts should have led to an approval, instead the President said no. How could this be?

It’s simple. The U.S. environmental lobby made this project a line-in-the-sand. As they see it, stopping the pipeline blocks the development of Canada’s oil sands- the second largest source of carbon in the world. This will facilitate the development of renewable energy and eliminate, or reduce, the need for a carbon alternative.

This view is dangerously naïve and is unsupported by the realities of the world. Blocking the project will not reduce the carbon footprint of the human race; it actually might increase due to carbon shuffling. Worse, denial of the pipeline alienates a trusted ally and provides an opportunity for one of our Nation’s most ardent competitors to gain significant regional influence.

But the decision has been made, and for now at least, we are left to deal with the consequences. Those consequences include a steady increase in the average U.S. gas price by twenty cents per gallon since the project’s denial. American households spent over $4,000 on gasoline in 2011 and current prices indicate this number could jump significantly this year. While the Keystone XL project isn’t a panacea against rising oil prices its completion would have buffered us from this and future increases.

The other consequence is needed employment for workers in our nation’s most struggling economic sectors. While TransCanada has indicated it will continue to pursue the project with a later completion date; the immediate consequence is 20,000 American jobs at a time of stubbornly high unemployment and continued economic malaise.


David Holt

David Holt is President of the Consumer Energy Alliance.