There's No Good Reason to Hold Up Keystone
The Keystone XL pipeline faces an uncertain future. The White House sits in its fifth year of indecision, and a court recently struck down a Nebraska law that allowed the state's governor to authorize the portion of the pipeline that would run there.
These holdups do not stem from a desire to protect Americans' best interests.
Keystone would carry crude oil from Canada's northwest down to Cushing, Okla., and from there to Louisiana, where oil refineries are plentiful. From the Louisiana refineries, existing pipelines would supply gasoline to American consumers. The project has been subjected to an intense environmental-impact study by the State Department, which found the pipeline would cause no material environmental damage but would create 42,000 jobs.
Further, the use of fracking in Canada and the U.S. has made for a remarkable increase in crude-oil production. If we maintain our rapid progress, we may achieve self-sufficiency in about seven years. Aggressive production in the U.S. and buying from Canada would quickly limit our dependence on importing from unstable or hostile suppliers.
Keystone should be a simple, quick decision -- reduced supply risk, no material environmental risk, and well-paying jobs. Unfortunately, much of the policy industry in D.C. is devoted to tightening the regulatory chokehold over petroleum, regardless of the consumer's interest, regardless of the nation's economic security, and regardless of any private-sector employment.
Regulators claim their objections to Keystone have to do with environmental concerns such as global warming and endangered species. The State Department's conclusion that Keystone presents no threat to the environment is embarrassingly out of step with standard talking points. It will be interesting to see how the administration squirms to dismiss State's annoying conclusion.
Further, while regulators are legally obligated to conduct a cost-benefit analysis on major regulations, petroleum regulators have a special stacked deck called the "social cost of carbon" that can counterbalance good jobs or low prices for consumers. The administration recently hiked the social cost of carbon 60 percent to outweigh consumer benefits from energy use.
And if that fails, regulatory agencies have experience with the "sue and settle" tactic : An environmental group sues the agency, which in turn happily negotiates a "settlement" involving draconian new regulations. Keeping politicians and regulators in line are the big political donors who devalue saving families dependent on private-sector jobs in rural areas. Most consumers don't have enough money for political donations to fight back.
Fortunately, there is life beyond D.C. Consumers notice when they must pay higher out-of-pocket costs for transportation and home heating and cooling. And they gradually notice higher prices in other goods and services. They care a lot when our neighbors and other fellow Americans can't find jobs, and they are very annoyed whenever jobs are crushed by heavy-handed regulators. They favor protecting the environment and wildlife, but not by regulations that impoverish working families.
For consumers, economic effects matter more than a stylish political calculus.
Alan Daley is a retired businessman who writes for the American Consumer Institute Center for Citizen Research.
