The facts about Keystone XL pipeline confirm President Obama rejected it for all the right reasons. The oil industry’s allies in Congress will continue lobbying for this project—even entangling it in the extension of the payroll tax holiday once again. But we will continue to fight back, because we know that no version of the Keystone XL pipeline will serve America’s national interest.

The pipeline would have endangered American communities. It would have cut through six states, across hundreds of miles of crop and rangeland, and over the Ogallala Aquifer—the source of fresh water for millions of Americans. Tar sands oil is highly corrosive, and a tar sands pipeline operated by the same company behind Keystone XL experienced 35 leaks its first year and had to be temporarily shut down by the Department of Transportation.

Building and operating this risky project would have created few Americans jobs. Even representatives of TransCanada, the company behind the pipeline, acknowledged in sworn testimony that the project will only generate “hundreds” of permanent jobs. The State Department estimated the pipeline would create between 5,000 and 6,000 short-term jobs. In contrast, more than 150,000 Americans now have jobs building fuel efficient cars that reduce our dependence on oil and save drivers money.

Supporters like to say the pipeline would deliver a secure supply of oil, but the fact is Keystone XL was designed to be an export pipeline. By rerouting tar sands oil out of the Midwest and into the “Foreign Trade Zone” in Port Arthur, Texas, companies could ship it anywhere in the world. Indeed, companies get incentives to export from there. In Congressional testimony, TransCanada refused to support a condition that the oil in Keystone XL would be used in the United States.

Finally, this tar sands oil pipeline would have accelerated climate change. Extracting tar sands oil produces three times as much global warming pollution as conventional crude. By rejecting the pipeline, President Obama is helping move America down a cleaner, safer path.

As usual, I am speaking on my own:

The XL pipeline decision was driven by politics, and not very good politics at that. So a few environmental extremists drummed up some emotional arguments based on mostly data points that lack rigorous study. If the issue was the increase in CO2 produced by the oil sands, indeed that is the case: maybe another 15 percent more CO2 would be produced during the life cycle of the oil sands from extraction to the final burning of the petrol by the transportation vehicles or other end uses. So, if the worry were that increased CO2 that might add to global warming then how would stopping the pipeline change this? The oil may now most likely go to a country the will burn the refined products from this oil sands in a less efficient and less regulated way than in the US: China. In addition, China will move a lot faster in getting funding to help build a pipeline going across the northern route of Canada to a port or ports on Canada’s west coast. The Chinese and others have already invested heavily in the tar sands fields and in tar sands production in Canada. The logic of the market that will get this oil flowing.

In addition, speaking of the logic of the market, more and more of the oil sands oil is being shipped by rail out of Canada into the US. This is more expensive, more CO2 producing and far less safe environmentally and otherwise than sending it by pipeline.

The big winners so far look to be China and the railroad companies. Good call by some NGOs.

TransCanada was willing to change the pipeline route so it would go around and not through some of the most environmentally sensitive areas, such as the large aquifers along the way. When it reapplies for the license in the future it will likely have that same better route, but it will take more years of probably the same research all over again at great cost to all to get back to step one again.

So some of the big winners now include the environmental consulting companies and the lawyers.

Calling our good friends to the north, the Canadians, producers of “dirty oil” and hailing insults at them surely did not improve our relations with the most important country to the US in so many ways. We have the closest trading, military, and other relations with the Canadians. They are a democracy. They are mostly good folks. They have environmental regulations. Alberta, where most of these oil sands would have come from was looking forward to applying stricter environmental regulations. Canada was looking toward working on some of the climate change issues. So one of the results of the hammering by the extremist environmentalists was that the Canadians have left Kyoto. Nice going for some NGOs.

One of the spurious arguments against the pipeline was that “all” of the oil that would go through it would be exported. This is based on the increase in exports of refined products from the US Gulf Coast in the last few years to places like Brazil. Refineries have been looking for markets overseas in countries that are growing, like Brazil. Why do so many people think it is a bad idea to export things? This is an idea right out of the USSR or some tin-pot dictatorship like Bolivia. Exports are good for economic development and growth for a country and this applies to natural gas as well.

The number of jobs that could have been produced from the building of the pipeline, its follow on maintenance and the businesses that could sprout up along its pathway now are stopped cold. This was one of the biggest jobs makers out there when it comes to an infrastructure project and it was stopped.

So the unemployment offices are added to the winners on this. The unions and everyday workers, plumbers, mechanics, drivers, welders and more are losers. Maybe they can move up to Canada to build the pipeline for the Chinese. That is a bit of a twist of fate for the American worker, eh?

Then there are the hopes that the Bakken oil fields in North Dakota could have used this pipeline and a spur to it to get that all important oil out. North Dakota is the fastest growing oil producing state in the country. Its unconventional oil could be one of the things that may help develop the hopes for greater energy independence for the US. One could also say the same thing for the oil shale, shale oil and oil sands in Utah, Colorado, Wyoming, Tennessee, Kentucky, Indiana and Ohio. Much like the massive unconventional gas reserves we can now get at via fracking, we can now get at gigantic resources of oil in many places in the country, even some people usually do not think of as oil states. That oil from Bakken will need to be sent via train or another pipeline internal to the country.

Many people would like to see the western and Midwestern unconventional oil developed for economic and job security reasons. We have the resources and it would be best to use the properly. It also would cut back on our trade deficit.

Our trade deficit? Yes. Often more than ½ of our trade deficit is from oil imports. Can we please get real? Then, maybe we cannot. The people who stopped this pipeline are mostly against oil, gas, coal, and anything that has the word hydrocarbon in it. (They sometimes support biofuels, which are economically, technically, and environmentally less amenable than some hydrocarbons. However, let us not let the facts get in the way.

Then there are the issues surrounding getting oil from unstable or potentially unstable areas and the risk our allies and we face if these areas get worse. I do not mean just the Arab world, but also Venezuela, Nigeria, and Russia. By developing the oil sands, we may also not need to develop some of the Arctic resources. Now we may have to if he political risks and political realities get far worse in some areas.

There are so many overwhelming reasons to support this and other unconventional oil projects for the medium run. One of the main overriding reasons is energy security. The second one is economic security. In addition, these two are big parts of national security.

We have the very harsh short-term problems of our debts. We could help reduce these debts by taking the huge amounts of oil that could be produced out of these massive reserves that we have. This could add up to trillions of dollars over the next couple of decades. There would also be other tax possibilities form the increased incomes in some regions and from the increased employment in some regions. Developing oil fields can be a big economic spark to an area. There is a reason why North Dakota has the lowest unemployment rate in the US: shale oil.

Surely, there are environmental effects to developing unconventional oil resources. However, there are social and other effects in keeping people unemployed and having an increasing trade deficit due to oil price hikes due to political stress, civil conflict or whatever. Nigeria, a major source for our light, sweet crude could be heading into a civil war. There is a lot more out there to throw off these markets than one might think.

Some will say that if world oil prices spike we will still pay the higher prices. Sure, but if we develop these resources the oil will be more and more here, not outside. There is some security in that in economic, political, and even military terms.

Yes, this is complex. Yes, there are many difficult and emotional tradeoffs. However, we need to use some common sense and not have the perfect be the enemy of the good or the ideological be the enemy of the reasonable.

For more on this you can see my testimony to Congress on this issue at: http://foreignaffairs.house.gov/hearing_notice.asp?id=1229. You may also read my analysis of this in the Geopolitics of Energy of November-December 2011, “US-Canadian Relations, The Arab Spring, Dictators and the XL Pipeline”. See also the panel I was on at the Wilson Center on this: http://www.wilsoncenter.org/event/the-proposed-keystone-xl-pipeline-the-national-interest-0.

There is a lot more to this issue and to other pipelines, railways, and more that could go around this issue. Oh, yes, I did not mention that one. Other pipeline companies, like TransCanada’s competition Enbridge will also win from turning down this pipeline. They have already made moves to buy pipelines, set up alternatives in certain areas for the XL, and to reverse a pipeline system from Cushing, Oklahoma to the coast of Texas.

Some NGOs get some points. They may also get a lot of funding inflows after this win. In addition, look out; they are now full of adrenalin to stop other important energy projects.

America loses.

US-Canadian relations lose. Canada until now sent about 99 percent of its oil to the US. I do not think that will be the case in the next many years.

The environment will not win form the delays. Eventually the XL or another pipeline will be passed through and complete.

American workers lose.

Energy security loses.

National security loses not just from this, but also from some knock-on effects from this decision.

There is just so much more to say. That will be in my next debate or paper on these subjects.

Whatever the symbolic importance of the Keystone XL decision, it is only one of several climate-related policy decisions facing the Administration this year – and arguably one of the less significant ones. The Environmental Impact Statement on the project produced by the U.S. Department of State estimates that stopping the pipeline would avoid between 3 and 21 MMT CO2e (carbon dioxide equivalent) in U.S. greenhouse gas emissions annually. While environmental commenters have suggested that this estimate may understate these benefits, they haven’t yet provided alternatives.

The bar chart below compares the CO2e emissions of the Keystone XL project (showing the highest estimate for that project) with several other current opportunities to reduce greenhouse gases:

Last year, EPA Administrator Jackson promised to promulgate a New Source Performance Standard (NSPS) for greenhouse gases from new and existing coal-fired power plants. According to EPA estimates, a policy that achieves a 15 percent reduction in coal plant CO2 by 2020 merely by relying more on existing, cleaner generation resources, would reduce annual GHG emissions by 305 MMT CO2e. At this point, it is unclear whether the EPA will propose a final NSPS rule this year, although a long-overdue court-ordered draft rule is about to be released.

In August 2011, US EPA proposed a significant update to the New Source Performance Standards (NSPS) for the oil & gas industries. EPA is scheduled to issue a finalized rule by 3 April 2012. EPA estimates that these rules will reduce annual methane emissions from the oil production and the entire natural gas industry by 3.1 MMT of methane, or 78 MMT CO2e per year (using a 100-year global warming potential for methane).

While this an important start, there are a number of feasible measures to reduce emissions from this sector that EPA could have included in the proposed NSPS, but did not. These include: covering emissions sources unregulated under the proposed NSPS, such as oil wells, conventional (non-fracked) gas wells, and gas distribution systems; more aggressive measures to mitigate some sources; and requiring mitigation measures for the equipment existing prior to August 2011. CATF estimates that implementation of these additional measures could reduce methane emissions by up to an additional 6.1 MMT of methane, or 152 MMT CO2e, per year (beyond the amount of emissions than will be mitigated by the NSPS, if finalized as proposed).

Lastly, the Energy Independence and Security Act (EISA) of 2007 mandated a substantial ramp-up of the minimum annual consumption of corn ethanol (Renewable Fuel Standard 2 or RFS2). Corn ethanol, as it is currently produced, has a much higher lifecycle impact on climate than gasoline, so this mandate substantially increases the lifecycle impact of burning US transportation fuels. If US drivers used gasoline instead of an energy equivalent amount of the corn ethanol being produced and consumed in 2010-2012 in accordance with the EISA-mandated ramp-up, the avoided GHG emissions during that period would have averaged 121 MMT CO2e per year. In theory at least, carbon re-sequestration by subsequently planted energy crops could eventually offset that difference -- but that process will take about 40 years, according to an analysis of EPA data by CATF.

Whatever one’s view of Keystone, all of us in the environmental community need to not lose focus on other, much greater opportunities to slow climate change. The Obama Administration this year can take an important first step in the battle to significantly ramp down our CO2 emissions by proposing strong greenhouse gas performance standards for coal plants.

Our nation is still struggling to recover from one of the worst economic downturns in its history. Fourteen million Americans remain out of work. Yet the president is now telling us that procedural niceties are preventing him from granting a permit that could put thousands of people to work without spending a single taxpayer dollar?

Let’s dispense with the nonsense that the deadline, which the President signed into law, was “arbitrary” or impossible to meet. The pipeline was in its fourth year of review, well beyond the 18 months to two years the approval process typically takes. During that time the project cleared three consecutive environmental reviews conducted by the State Department -- including multiple public hearings, consideration of 14 different routes and 57 special conditions exceeding current federal pipeline regulations that were agreed to by builder TransCanada.

TransCanada has indicated that it will apply for a new project permit, but the fact remains that the president blocked a multi-billion dollar oil infrastructure project stretching across five states just one day after his own Jobs Council suggested that such projects are critical to helping our economy improve.

Regarding the idea that blocking the pipeline will boost renewable resources, the Energy Information Agency just this week forecast that oil and natural gas will still provide 57 percent of the energy our economy needs by 2035. And that even with increased domestic production 36 percent of our liquid fuels will be imported that same year. It makes no sense to deny a project that would help secure those imports from our largest trading partner when it is becoming more and more apparent that the security of our international oil supplies is under serious threat.

Last week Michael Levi from the Council for Foreign Relations, in talking about the Keystone XL decision, noted: "If we get into the habit of having a lot of politics involved in what used to be fairly routine approvals and developments then that will become a larger economic problem."

Unfortunately, with a permitting slowdown in the Gulf that has led to the departure of 11 rigs and the loss of more than $21 billion in capital investments; with a permitting, leasing and drilling slowdown on federal lands in western states that has cost us production, jobs and millions in federal and state tax revenues, royalties and lease payments, with a five-year plan that raises royalty rates and places most of our offshore resources off-limits, and with eight federal agencies now considering new and unnecessary regulations on hydraulic fracturing, the technology necessary to produce 70 percent of future natural gas production; politics trumping approvals and development is already routine, and we find ourselves facing that larger economic problem.

President Obama’s politically-motivated decision to turn down the Keystone XL pipeline probably shouldn’t have been a surprise, but it’s informative to learn how the president weighs an economic no-brainer versus a political opportunity. With stubbornly high oil prices and unemployment, his refusal to grant approval for Keystone is easily an embarrassment to our national energy policy. With the progressive green wing already in his camp, it’s a speculative move, at best. Lesson learned: a small probability of political self-promotion trumps the national interest – and the law.

Blaming Congressional conservatives for imposing a “rushed and arbitrary” 60 day deadline to decide on Keystone, the president said that the State Department didn’t have time to fully assess the pipeline. Unfortunately for the president, this accusation is toothless. The State Department has been considering the pipeline route for more than 3 years, and the final Environmental Impact Statement for the pipeline – demonstrating no significant environmental threat – was completed last summer. The 60-day deadline wasn’t arbitrary, it was a sad necessity to counter undue delays and pointless dithering.

President Obama also ignored the expressed will of Congress by failing to make a determination of whether the pipeline is in the national interest. As WSJ editorial board member Mary O’Grady wisely points out in an opinion piece this week, the well-crafted language requiring the president’s decision on Keystone XL in 60 days expressly excludes additional considerations of environmental impact. Indeed, in his statement, the president says that his decision, “is not a judgement of the merits of the pipeline,” but reflects a timeline that “prevented a full assessment of the pipeline’s impact” on the environment. We’re well aware of Obama’s determination to bolster his support among the green lobby, but his action to refuse Keystone directly contravened the will of Congress. How does he expect any future investment in American infrastructure if he so flippantly dismisses the letter of the law?

It’s important to note that the Alberta oil sands will be developed whether or not we build a pipeline to take advantage of that new production. Refusing the permit for Keystone doesn’t diminish the immense value of Canadian oil; it simply opens up opportunities for Asian markets. We cannot look at this pipeline as a burden of oil reliance; it is an opportunity to compete for resources, expand trade with a friendly neighbor, and increase our profile in the international energy market. More than that, it’s a private-sector venture that will require skilled labor in a bleak job market. Sure, we’re striving to reduce our dependence on foreign oil, but it’s our fuel of choice right now, and Canada is an ideal supplier.

The president’s own Jobs Council released their Road Map to Renewal a day before the Keystone decision. This series of recommendations for accelerating job creation and promoting long-term American competitiveness expressly promoted expeditious construction of pipelines to deliver fuel and support jobs. They also condemn “regulatory and permitting obstacles” that threaten the development of energy projects as negatively impacting jobs and weakening our energy infrastructure. This is exactly the kind of obstacle they were referring to.

So why doesn’t the president listen to the advice of the very council he created to coach him on these decisions? If access to energy creates jobs and economic growth, why turn down a major energy infrastructure investment? A day after Obama turned down the pipeline his reelection campaign sent an email asking North Dakotans and Minnesotans for their support on his decision. Setting aside the bold callousness of asking support from the very people the pipeline would have employed – and that his decision on Keystone skirted legality – it’s clear that the campaign is doing their best to turn a bad policy decision into a profitable political point. Capitulating to the demands of the leftist environmental community may well galvanize support for the president in the next reelection, even if that support is gained on the backs of the unemployed.

Thankfully, TransCanada is indicating that they will reapply for the permit to build Keystone XL. After exhaustive study of the pipeline, its route, and any potential environmental impacts, this permit should be approved. The private sector is interested in a major investment to our energy infrastructure; unfortunately they need a green light from an administration that is openly hostile to traditional forms of energy. Rather than currying the favor of environmental activists, the President should stand back and let us invest in job creation, economic growth, national security, and a bright future for American energy.

(These comments were submitted by Kim Huynh, Federal Dirty Fuels Campaigner at Friends of the Earth.)

Last week, President Obama showed bold leadership in rejecting the Keystone XL pipeline. In an iconic battle of David versus Goliath, the climate movement took on one of the most moneyed and access-rich industries on Earth, Big Oil, and won— demonstrating its burgeoning strength.

But let’s make no mistake—President Obama didn’t make this decision because he wanted to. Public interest groups’ work to shine a light on a corrupted State Department review process and sustained grassroots pressure aimed at holding the president accountable to the people forced President Obama’s intervention and, ultimately, his rejection of the pipeline.

Despite the president’s determination that Keystone XL is not in the national interest—a significant feat and warning to corporate polluters the world over— we must remain vigilant to ensure he continues to reject any and all proposals that would allow expansion of the tar sands industry. Unfortunately, the president made no mention of the pipeline’s likely contributions to destabilizing our climate to the point of no return by ferrying through our heartland the world’s dirtiest oil, tar sands oil. The country’s top climatologist, Dr. James Hansen, has called the pipeline the continent’s ‘biggest carbon bomb.’

We know that TransCanada and its sidekicks in Congress aren’t giving up their marquee project and billions of dollars in potential profits that easily, no matter what havoc they may wreak on our land, water, and climate. They’re already angling to begin construction on the southern segment of the pipeline stretching from Cushing, OK to the Gulf Coast—and connecting Canada’s dirty tar sands with international markets— without a rigorous, independent, science-based review of the likely impacts [http://www.eenews.net/Greenwire/2012/01/19/6]. And they’re seeking to overturn the president’s permit rejection and hijacking the approval process with Big Oil-backed bills in Congress [http://www.reuters.com/article/2012/01/21/us-usa-pipeline-legislation-idUSTRE80K04320120121].

U.S. demand for oil has been declining since 2007 and new fuel-efficiency standards will reduce our oil consumption by 1.7 million barrels per day by 2030. That’s twice what Keystone XL would carry at maximum capacity [http://priceofoil.org/wp-content/uploads/2012/01/KXL_undermine_energy_security_2page_Web.pdf]. The only way to put America on the path towards energy independence, ensure our national security and economic prosperity, and solve the climate crisis is by making investments to reduce U.S. dependence on oil altogether. The Keystone XL pipeline would have been dirty at both ends, dangerous in between, and certainly not in our national interest. Big Oil and its bought-and-paid-for confederates in Congress can’t drown this dirty reality despite all of their threats and bullying.

President Obama's rejection of the Keystone XL Pipeline showcases the administration's misplaced priorities when it comes to energy policy and job creation. This much needed project would provide thousands of construction and manufacturing jobs and would reduce U.S. dependence on oil imports from the middle east and other unstable parts of the world. U.S. refinery production would be enhanced by access to secure oil supplies from Canada.

Delay is unnecessary. If a reroute of the Keystone pipeline through Nebraska’s ecologically sensitive areas is needed, pipeline construction can certainly begin on other segments. It is puzzling that the administration chose to reject this job creating private sector initiative yet continues to gamble on risky taxpayer funded renewable energy projects that have yet to produce a meaningful number of new jobs. Preventing the pipeline’s construction will not strengthen the demand for energy from solar or wind power since they are used for electricity generation rather than for transportation fuel. As for critics who make the weak case that Keystone Pipeline XL jobs are only temporary should watch today's CNBC segment with special representative of the united association pipeline division and union representative who explains that pipeline workers are not unlike any other industry including Hollywood movie actors that finish a job and move on to the next project. President Obama should reconsider his stance on the Keystone pipeline. If the U.S. does not import oil from the Canadian oil sands, other countries like China certainly will.

President Obama will have a difficult time convincing voters he’s a job creator heading into this year’s election. Unemployment has been greater than 9 percent for most of his term, he’s discouraged domestic investment by creating regulatory uncertainty, he’s allowed the national debt to skyrocket above $15 trillion, and he pushed a $700 billion stimulus bill that failed to create any long term jobs. Still, as Obama hit the campaign trail last week, he was well positioned to capitalize on the recent dip in the unemployment rate. Then he vetoed the Keystone XL pipeline.

This pipeline that would have delivered more Canadian oil to U.S. refineries represented more than just a piece of energy infrastructure; it represented a commitment to strengthen North American energy security. The U.S. is home to 148 refineries, more than any other country. High U.S. energy demand requires imports of crude oil from other countries; but our huge domestic refining capability ensures that jobs and revenue are created here. What’s more, America has become a major exporter of refined petroleum products in recent years.

So why is Keystone so important?

Canada’s vast oil sands are a prolific generator of wealth, but this oil must be refined. The rationale for building the Keystone XL pipeline is to make this diluted bitumen available to refineries along the Texas/Louisiana Gulf Coast that are equipped to process this type of crude oil. At present, Gulf Coast refineries are supplied primarily by Mexico and Venezuela, both of whose production is declining. Other countries certainly would be happy to refine these resources, but the proximity and close ties Canada shares with the U.S. make us the most logical destination for their oil.

Construction and maintenance of the pipeline as well as refining would have created 20,000 new private sector domestic jobs: 13,000 in construction and 7,000 in manufacturing. During a time when good paying jobs are scarce, this influx of blue collar work would have offered a lifeline to the unemployed and underemployed. But the project was deferred solely for political reasons and not for any financial or environmental considerations.

After three years of analysis, the U.S. State Department determined that the Keystone XL pipeline would have “no significant environmental impact” to the states it would traverse, and it promised a decision by the end of 2011. Environmentalists deeply opposed to all hydrocarbons responded to the pending approval by threatening to hold back their financial support from President Obama’s 2012 re-election campaign. This blatantly political decision enraged pro-pipeline advocates because it was made at the expense of jobs and energy security. In response, Congress essentially rejected the stall tactic and gave the President a February deadline to make a decision.

The plan backfired.

Disregarding the jobs this project would have offered and the rigorous environmental analysis already completed, the President imposed a de facto veto. As justification for his decision the President claimed the pipeline needed a more detailed environmental impact assessment. He did leave the door open by allowing the pipeline company to resubmit plans that he would reconsider after election.

The fallout has been quick and furious. Labor unions, trade associations, and elected officials on both sides of the aisle are criticizing the White House for this economically unsound decision. With growing tension between the U.S. and Iran, failing to secure additional oil supplies from a friendly source would seem especially unwise.

Seemingly unfazed, the President must now explain why he’s stymieing the creation of thousands of high-wage jobs, putting our energy security at risk, and losing an opportunity to temper the rise in fuel costs. Not the easiest way to kick off a re-election campaign.

The decision to reject TransCanada’s Keystone pipeline raises some interesting policy questions.

Opposition to the pipeline (which was planned to bring Alberta oil down to the heart of the U.S. distribution network and refinery infrastructure) was driven by two main factors:

• Concerns over pipeline safety and construction impacts related to the pipeline crossing major Midcontinent aquifers
• Concerns about the process of oil-sand development and the greenhouse-gas effects of that development

In order to truly understand them, each issue needs to be examined individually: Could the pipeline be built safely, perhaps with some degree of rerouting? And, what is the overall impact of delaying or prohibiting an outlet for the oil to the United States?

The U.S. energy industry has been able to build hundreds of thousands of miles of oil and gas pipelines across the country, creating one of the largest and most flexible energy-transfer networks in the world. Current issues in Congress involving pipeline safety have primarily focused on older pipelines, not new construction (which has a track record of safe and successful construction and operation). Thus, it is hard to believe that this particular pipeline could not have been rerouted and safely built.

As to the second and larger issue, the impacts the pipeline would have on the pace of development of the oil sands, on the U.S. economy, and on the achievement of our major policy goal of energy independence, are significant to say the least. It is difficult to see the logic in not putting the pipeline in place. There must be a really good story underneath the Administration’s decision to forego such a potentially strong policy-enhancing project.

We need a brilliantly skilled researcher, such as dragon-tattooed Lisbeth Salander, to come forth and unearth the information and analysis that led to the termination of the project. It seems obvious that in the absence of the Keystone pipeline, the resulting oil will go primarily to export markets including Japan, Korea, and China—displacing oil these countries presently buy from the Middle East. As long as the U.S. is importing any Middle Eastern oil, the loss or gain of a single barrel from Canada has a direct impact on the requirement or displacement of an equal amount of Middle Eastern oil. Consequently, any Pacific Rim oil from the Middle East displaced by the Alberta exports will likely find its way to the U.S.—leaving the U.S. even more dependent on imports from geographic regions much less friendly than Canada.

Therefore, we need not just the investigative skills, but more importantly the math skills of Lisbeth to decipher the Administration’s underlying compelling policy issues. Perhaps the American public should consider kicking the hornet’s nest?

What is fast-becoming the main talking point against the Keystone XL Pipeline (KXL) is the claim that greater access to Canadian crude would not enhance energy security but would instead increase pain at the pump.

According to pipeline opponents (here, here, and here), most of the petroleum products made from Keystone crude would be exported by Gulf Coast refiners to Europe, South America, and Asia rather than sold in U.S. domestic markets. Thus, opponents contend, Canadian oil coming through the pipeline would displace little if any oil imported from unstable, undemocratic, or unfriendly countries like Nigeria, Saudi Arabia, or Venezuela.

Rep. Ed Markey (D-Mass.) raised this criticism at a House Energy and Commerce Committee hearing last month. Keystone, he said, would not “back out” any oil we import from the Middle East if it simply turns the USA into a “middle man” for exporting diesel fuel and other finished petroleum products made with Canadian dilbit.

Markey challenged TransCanada exec Alex Pourbaix to support legislation prohibiting Gulf Coast refiners from exporting petroleum products made from Keystone crude. Clever! If Pourbaix endorsed Markey’s proposal, he would jeopardize the long-term sales contracts on which KXL’s commercial viability depends. If he rejected Markey’s proposal, he would appear insincere in claiming the pipeline would reduce oil imports from “unfriendly regions.”

Pourbaix rejected Markey’s proposal, and for good reason – it is a mischievous ‘fix’ for a non-problem.

To begin with, a ban on exports of petroleum products made from Keystone crude would violate one of the basic principles of the international trading system: “National Treatment” – treating foreigners and locals equally. The World Trade Organization (WTO) provides a succinct explanation:

“Imported and locally-produced goods should be treated equally — at least after the foreign goods have entered the market. The same should apply to foreign and domestic services, and to foreign and local trademarks, copyrights and patents. . . .National treatment only applies once a product, service or item of intellectual property has entered the market. Therefore, charging customs duty on an import is not a violation of national treatment even if locally-produced products are not charged an equivalent tax.”

Under the National Treatment principle, once Canadian oil has entered the U.S. market via KXL, it must be treated the same as oil produced from U.S. wells. Only if Congress were to ban exports of petroleum products sourced from domestic crude would Markey’s proposal pass muster under the General Agreement on Tariffs and Trade (GATT).

If Congress chose to ignore GATT and enacted Markey’s plan, the restriction would put U.S. refiners at a competitive disadvantage. They could not export products made from Canadian crude, but foreign refiners would be under no such restriction. This kind of reverse protectionism makes no sense, especially for folks like Markey, who view trade deficits with alarm.

Markey claims that without an export ban, Keystone crude will bypass rather than supply the domestic U.S. motor fuels market. That is implausible. Of the more than 2 billion barrels of finished petroleum products refined in the Gulf Coast region (PADD III) from January through October 2011, approximately 74% was sold in domestic markets. New supplies of Canadian oil will undoubtedly increase exports but not dramatically unless KXL creates a glut in PADD III. That's not in any credible forecast, because PADD III imports of Mexican and Venezuelan crude are declining.

As DOE analyst Carmen Difiglio observes:

“Taken together, U.S. imports of crude oil from Mexico and Venezuela are about 1 million barrels/day lower than their previous peak levels. With an expected decline of Mexican crude oil production of 500,000 barrels per day and the likelihood of increased exports of Venezuelan crude to Asia, current heavy imports to PADD III are likely to decrease by a significant amount within the next five years.”

KXL opponents note that PADD III exports of finished petroleum products have increased rapidly in recent years. No dispute there. According to the U.S. Energy Information Administration (EIA), total U.S. exports of finished petroleum products “increased more than 60% since 2007 as markets have become more globally integrated,” and most of those exports came from PADD III. But that is exactly why KXL would displace imports from the Middle East.

World demand for liquid fuels will increase from 85.7 million bpd in 2008 to 112.2 million bpd 2035, EIA projects. U.S. exports of finished products will also increase to help meet that demand. Refiners will source increasing amounts of crude from domestic producers. Nonetheless, refiners will continue importing millions of barrels daily from foreign producers. Every barrel they import from Canada is barrel they do not have to import from OPEC.

How, according to opponents, would KXL increase Midwest gasoline prices? KXL would relieve the “Cushing Congestion” – the glut of Canadian oil in PADD II caused by a shortfall of outgoing pipeline capacity. TransCanada estimates that by removing the glut, KXL will raise PADD II crude oil costs by $1.37 billion in 2013. PADD II refiners will then pass those costs onto consumers at the pump. It's the last step of this argument that's the problem.

DOE’s Difiglio explains:

“Eliminating transportation constraints from Cushing to Houston would not adversely affect Midwest gasoline consumers. While Midwest refiners are currently benefiting from high crude discounts compared to PADD I [East Coast] and PADD III refiners, Midwest gasoline consumers are not benefiting from them. Retail gasoline prices reflect the wholesale price of marginal gasoline supplies. In 2010, marginal gasoline supplies to the Midwest were from PADD III (310 thousand barrels/day) and PADD I (I80 thousand barrels/day). With substantial additional volumes of light-sweet and other crudes accessible to Gulf Coast refineries . . . [c]rude costs to PADD I and PADD III refiners would be lower. Gasoline prices in all markets served by PADD I and III refiners would decrease, including the Midwest.”

KXL opponents have chutzpah. They argue with a straight face that reliable access to expanding supplies of Canadian oil would not enhance our self-reliance on North American energy, and would increase rather than help stabilize gasoline prices.

Why push this talking point to the fore now? I suspect it’s because the public isn't buying opponents' even more over-the-top claims that KXL will ruin the Ogallala aquifer and wreck the climate system.

On January 19th, President Obama announced his decision to deny an application by Trans-Canada for construction of the proposed Keystone XL pipeline that would have brought crude oil and tens of thousands of jobs from the tar sands of Alberta and North Dakota's Bakken field to refineries in Texas and Louisiana. Despite the devastating consequences of this action, we at CFACT were not surprised.

Mr. Obama blamed Republicans in Congress, saying he did not have enough time to review routing changes through Nebraska that have yet to be finalized. The truth is that his Senate allies blocked language that would have given him until 30 days after the new route through Nebraska was finalized.

This President who talks about "shovel-ready jobs" has had, since 2008 when the application was first filed, plenty of time to "study" it. Some still hold out hope that, should Mr.Obama be reelected, he will revisit his decision and issue the permits in 2013.

We beg to differ, taking our cue from the public statements and actions of Mr. Obama and key Administration officials, for example:

• Interior Secretary Ken Salazar suspended 60 of 77 oil and gas leases in Utah in 2009. U.S. News [1/13/12] reports that, despite Administration propaganda, lease sales in offshore areas have plummeted by more than $9.4 billion since President Obama took office. Deepwater permits are being issued at less than half the rate of pre-moratorium levels, and shallow water permits are down 40%.

• President Obama ignored a federal judge's ruling to continue his moratorium on deepwater drilling in the Gulf of Mexico. Now, a new American Petroleum Institute study, cited in International Business Times [1/12/12] says the moratorium [plus the longer offshore permitting processes] will cost the U.S. more than $24 billion in lost oil and gas investment over the next several years.

• Energy Secretary Stephen Chu , back in 2008, stated, "Somehow we have to figure out how to boost the price of gasoline to the levels in Europe." While he has yet to succeed, gasoline prices today are twice as high as when he and President Obama took office. Meanwhile, Secretary Chu defended the billions of dollars in loans to failed companies like Solyndra that have increased the national debt and done nothing to lower the price of energy.

What is President Obama’s rationale? Perhaps it is as CFACT Senior Fellow Paul Driessen put it -- that Mr. Obama's real goal is to "reduce energy supplies, raise energy prices, and destroy jobs" other than government-subsidized "green jobs" using taxpayer dollars that to date have mostly lined the pockets of campaign contributors.

The Administration, its radical environmentalist allies and major U.S.-based foundations seem to be working in lockstep to shut down the U.S. fossil fuel industry. As CFACT's Duggan Flanakin and Redmond Weissenberger pointed out, "Killing Keystone is just one part of a grand strategy that includes closing off Asian and U.S. markets from [Canada's] oil; banning exploration and production across Canada and the United States; and even shutting down existing operations."

Canadian journalist Vivian Krause [Financial Post, 1/17/12] exposed how the Hewlett, Packard, Pew, Sea Island, Tides and other groups funneled at least $300 million to efforts in Canada that would foreclose port construction and other economic activities, effectively returning much of our northern neighbor to First Nations indigenous peoples who have led the battle against Keystone and the Northern Gateway pipeline that would send Canadian oil toward Asia.

Canada's Natural Resources Minister, Joe Oliver, has further denounced efforts to "exploit any loophole they can find, stacking public hearings with bodies to ensure that delays kill good projects." Canada, he said, needs the jobs and revenues from expanding its oil markets.

Meanwhile in Washington, President Obama tries to have it both ways: talking about the need to create jobs on one hand, while proceeding to kill every shovel-ready job in sight on the other.

Today, almost 40 years since the Arab oil embargo, we find ourselves confronted by oil prices in the range of $100/Bbl., a dependency upon imported oil that results in annual gross capital outflows from the US in excess of $300 B, a military stretched to its limits as it seeks to project sustainable power in the Persian Gulf, a resilient recession that has kept unemployment unacceptably high and facing the consequences of global climate change, but without a plan of action.

It can be reasonably argued that any combination of adverse outcomes would place the US economy in considerable distress. However, in contrast to the decisive action taken by other countries in other times in response to comparable or greater risks, we seem to be content with verbal jousting rather action, with competing diatribes rather than constructive proposals and otherwise simply content with malaise awaiting a Presidential election where issues will no doubt be reduced to sound bites. In light of the Administration’s decision of last week to reject the application for the Keystone Pipeline, I believe that it is important to re-consider the entirety of the debate surrounding this issue.

Let’s begin by trying to understand what I will call the “dynamics” of the debate itself. First, a debate where the proponent of a specific action has not proffered a clear policy framework and is not therefore in a position to describe how the action supports the policy leaves the party open to a free-for-all, since any critic can represent anything it wishes with respect to proponent’s objectives. It would appear that this is what has occurred in the debate surrounding the Keystone Pipeline. Specifically, absent an oil policy which describes how the US intends to manage the dynamics of oil markets and reconcile these with specific economic, environmental and foreign policy objectives, it is more than difficult to assess the role of Canadian oil sands or the Pipeline and to consequently balance the advantages and disadvantages.

With this said, we are faced with the question of whether there is a basis for resolving the impasse with respect to the Project approval and potentially, even more importantly, can this debate serve as foundation for moving from confrontation to consensus on a broader set of energy initiatives. My answer is that we can and we should. In an effort to be constructive, I suggest that a constructive first step to building such consensus is to identify shared goals, possibly starting with:

• Fostering private sector investment and job creation in the US
• Reducing US reliance upon imported oil
• Improving environmental quality

· Although there may be a number of paths we can take which will achieve these objectives, I would hope that there might be general agreement that reducing US oil demand will materially address all of these goals. However, it is also important to recognize that it will take decades of sustained federal policy and focused effort to significantly reduce the use of oil products, particularly in the transportation sector. The salient question is what happens during the intervening years when the US will remain vulnerable to the economic and environmental consequences of continued reliance upon oil? I believe that the answer is an oil policy that will seamlessly integrate our short to mid-term needs for secure oil supply with initiatives that support the commercial deployment of viable long-term alternatives.

What might be one of the key elements of such an oil policy? Well, it would appear to be both important and very feasible to further diversify oil supply to North America by increasing supply from countries such as Canada and Mexico and away from the Persian Gulf and Venezuela. The challenge then becomes how to reconcile such supply diversification with national economic and environmental goals.

First, although numbers on jobs and investment can be interpreted and used differently, it is important to recognize that a significant portion of the dollar outflows associated with the purchase of Canadian oil and especially supply from the oil sands are “recycled” back to the US in the form of purchases of US equipment, services and labor. Therefore, quite aside from the direct and indirect economic impacts of the Keystone Pipeline itself, the development of Canadian oil sands contributes to significant economic activity in the US. For example, the Canadian Energy Research Institute (CERI) has projected that over the next decade and a half oil sands development could add upwards of 340,000 new jobs and contribute over $30 B annually to US GDP. Putting aside what is the inevitable criticism of any particular study, it appears that aside from increasing US domestic oil production, there is no more effective way of promoting economic development in the US than through Canadian purchases.

This brings us to the environmental component. Since it is always good to begin with facts, it appears that early stage oil sands development based upon open cast mining and surface processing had significant environmental impact including GHG emissions in excess of the life cycle emissions associated with conventional light crudes. However, the oil sands industry has continued to drive down these impacts and there strong potential that overall environmental impacts associated with oil sands development will be comparable to crude oil, particularly crudes produced from wells in Venezuela, Nigeria and even some in the US. Therefore, as we move forward into this decade it is possible to think about increasing Canadian supply under conditions that are positive for US economic growth, represent acceptable environmental impacts and do not preclude or otherwise undermine our efforts to improve automobile efficiency or otherwise displace conventional transportation fuels with alternatives. This is not a zero-sum game, we need to be successful in all these undertakings such that taken together we can comprehensively manage the transition to a clean energy future.

What are the key elements of a “package” which might constitute a basis for a consensus on Keystone? Well, I would propose the following:

• Use the 2009 “Clean Energy Dialogue” between the US and Canada as a potential basis for an agreement with Government of Canada which:

o Creates a declining trajectory for GHG emissions from oil sands and potentially water use and other issues (land disturbance/reclamation and tailings disposal management)

o Establishes actionable goals for procurement of US origin goods and services associated with oil sands development and pipeline construction/operation

• An alternative routing for the pipeline which avoids environmentally sensitive areas and thereby reduces the impact of pipeline construction and operation

The heightened concerns about a potential disruption of oil supplies from the Persian Gulf only emphasize the importance of the role of the Keystone Pipeline and oil sands derived crude supply in enhancing US energy security and supporting economic recovery. Notwithstanding the merits of alternative fuels in the long-term, we must act today to protect the vital interests of the United States over the next years to come. With this in mind, let’s use the disapproval of the Keystone application as an opportunity to convert the issue from a source of vitriol to a basis for consensus building. This can be done by having stakeholders come together to support approval by the State Department based upon a new project submittal and developing a schedule for project review that allows for full assessment of the Pipeline’s environmental impact and the negotiation of an acceptable agreement that would address key environmental and economic issues surrounding both oil sands and the pipeline.

Although the confrontational politics of the last several months suggests that it is not likely that any material progress can be achieved on almost any matter of significance, there is strong indication that the American public wants its political leadership to place country over partisanship. Constructive and timely action on the Keystone Pipeline would represent a good first step toward to demonstrating that we have functional and responsive government willing to act in the best interests of the public. Further, an agreement around Keystone could serve as a foundation for a broader consensus that could allow us to make progress around other energy initiatives.

As we move in 2012 facing the prospect of upside pressure on fuel prices as well as uncertainties around world supply, it is important to develop new policy that will drive down our demand for conventional oil products, particularly in the transportation sector. CAFE standards and electric vehicles have significant long term potential, but the timescale for turning over the fleet makes policies that rely solely upon technology transformations insufficient to the task. The Renewable Fuel Standard is another potentially good tool but again the time frame for significant market penetration by advanced biofuels makes this initiative also insufficient to the task.

However, the US is not without resources. Specifically, the “shale gas revolution” provides the US with the opportunity to displace conventional gasoline, diesel and jet fuel with lower carbon, alternative fuels from domestic natural gas. US industry has the technology, capital and competency to execute projects involving an array of such alternatives including but not limited to drop-in fuels (Gas-to-Liquids), methanol/other substitute fuels and using natural gas directly in modified vehicles (CNG/LNG). The role of government here is not to pick the “winners” but to provide a thoughtful policy construct that effectively internalizes the geopolitical, economic and environmental externalities associated with conventional fuels and integrates these into a market based policy which is off-budget to the federal government.

In 2011, we saw how the politics of confrontation can stall progress and create malaise. However, as we enter 2012 we have a clear choice between continuing the politics of confrontation and shifting to the politics of consensus, not for the sake of consensus alone, but as part of an important effort to address critically important issues that have vexed the US for some 40 years.

Now is the time for consensus, now is the time for action.

President Obama not only made the right decision in denying the Keystone XL permit, he made the only possible logical decision.

Let’s quickly review the events since early November. Environmentalists, youth and landowners expressed to the President, in creative ways, their opposition to the pipeline. It was revealed, among other flaws, that the pipeline route in Nebraska was opposed even by the Republican Governor and Senator. As Nebraska convened a special session of its legislature, the Obama Administration announced a delay to study a new route. Since there is no shortage of oil or any emergency, that delay was reasonable.

At that point the House Republicans decided to play political football with the project by attaching an expediting bill to the most important piece of year end legislation, the tax cut extension. In doing so, they knew that the timeline of 60 days would force the Administration to reject the pipeline. Then, having forced this decision, they acted outraged when it came down.

This act of political theatre of the absurd passes for normal in Washington.

It’s depressing, because this country really needs a debate about the future of marginal oil sources. We could start with a simple question: Do we even need tar sands given that consumption is down and must continue to decline if we are to address climate change?

Instead we have the President of API absurdly claiming that KXL will facilitate the creation of 500,000 jobs by 2035 and pipeline proponents vowing to turn the pipeline into an election issue. That means instead of debate we will hear talking points – 20,000 jobs, shovel ready project – repeated without regard for accuracy or relevance. They are both false, but in an election campaign talking points must be hit and hit again.

Had Congress allowed a serious National Interest Determination, the issues to look at would have included industry’s plans to offset the demand decline by increasing exports from Gulf refineries. It’s quite clear that the Keystone XL plan is in the interest of some Gulf refineries and of Canadian tar sands producers. But is it in interest of the United State of America? That is the question the oil industry doesn’t want the President to consider.

We already have a Keystone pipeline that supplies the US with plenty of oil, which we refine at Midwestern refineries or store the crude at Cushing, Ok. The current spat concerns a second phase of Keystone which seeks to send that tar sands crude to Gulf Coast refineries, where the gasoline and diesel can be exported. This Keystone fight has nothing to do with US energy security, or supplying the US market – it is all about importing Canadian crude to export the gasoline. Big Oil wants more pipeline capacity to serve its new, very profitable export markets. For the first time in 62 years, America is now a net exporter of refined petroleum. These rising US exports keep domestic gasoline prices higher than they otherwise would be. And a completed Keystone pipeline exacerbates this trend. That’s why Public Citizen supports efforts to place the same export licensing requirements we currently have for crude oil on refined products like gasoline and diesel. We all know that Tar Sands oil is bad for our health and bad for the climate – but it turns out it’s bad for our pocketbooks. And families in the Midwest – a pretty crucial Presidential battleground – have the most to lose.

In rejecting the Keystone XL pipeline, President Obama clearly made a political calculation that his route to re-election lies more with his favored environmental constituency than by creating real blue-collar jobs. His environmental constituency operates under the belief that if government just cuts off oil and other fossil fuels, renewables will be set free and quickly fill in for fossil fuels. Since oil supplies 94% of America’s transportation needs, cutting off a pipeline from Canada simply means less oil from a friendly nation and more imports from Russia, Saudi Arabia and Venezuela. Renewables will not flourish by cutting off the energy that powers our economy today, but by technological innovation to develop truly efficient, reliable energy sources that can compete in the market.

Not only has the President snubbed our friends to the north and delayed a source of high-paying jobs, he’s also nixed a solution for western producers. Keystone XL would have enabled American producers in North Dakota and Montana to occupy 25% of the capacity. With the oil boom in the Bakken and limited pipeline capacity, American producers are having to rail and truck oil to market, which is less efficient than the state-of-the-art Keystone pipeline. Keystone XL would relieve some of the bottlenecks and encourage more domestic production.

After three years of analysis and the government’s own Environmental Impact Statement finding of no significant environmental impacts, it’s time to approve the Keystone XL pipeline. Clearly it’s in our nation’s interest to create jobs and increase energy security now.

The Keystone XL Final Assessment, prepared for the U.S. Department of Energy’s Office of Policy and International Affairs by the consulting firm EnSys Energy, suggests President Obama’s denial of TransCanada’s permit for the pipeline will have almost no impact on U.S imports of Canadian crude oil. In its report, EnSys modeled imports under a number of scenarios, finding “almost identical” levels of imports whether or not the pipeline is built. If these results are surprising, it’s because of an oft-downplayed, yet key, aspect of the pipeline: that it is meant to transfer oil from the tar sands to the Gulf of Mexico for export to other markets, not to transport the oil for use in the U.S. Furthermore, a recent report by Cornell University Global Labor Institute suggests that, if anything, approval of the pipeline would have a negative impact on domestic oil prices, as some of the tar sands oil currently being transported to refineries in the Midwest would instead to shipped further south for export, increasing local gasoline and diesel prices by as much as twenty cents per gallon.

Proponents of the pipeline’s construction are quick to point out the job creation potential of Keystone XL. In an era of consistently high unemployment, the 4,650 construction jobs that stand to be created if the pipeline is approved would be a welcome development for those seeking work, even if these jobs are but temporary in nature. However, approving an energy project solely on the basis of its job creation potential lacks foresight and represents a shirking of our responsibilities to our children and future generations.

Pursuing renewable and efficiency-based solutions to our energy needs will contribute substantially to America’s economic recovery (providing 16.7 jobs per $1 million in investment, as opposed to the 5.3 jobs created per $1 million of investment in fossil fuels) and prevent us from becoming further locked into a fossil-fuel based economy that promotes geopolitical instability, threatens our national security, and exacerbates the impacts of global climate change.

Accusations that the decision was the result of the President caving to political pressure from “extreme elements” are themselves political in nature. Factual inaccuracies and omissions (such as the suggestion that the oil transported through the pipeline will be consumed in the U.S.) found in these claims indicate that the petroleum industry has its own interests in mind, which, incidentally, are not those of the American people.

Even if oil imports to the U.S. increased and prices fell, reliance on a friendly nation to meet our energy needs is still exactly that – reliance. The exploitation of domestic resources is the key to energy independence, the sustainability of which hinges directly on excluding or drastically limiting nonrenewable resources from the energy equation. Our wealth of homegrown renewable energy resources, along with the energy efficiency improvements waiting to be made in our homes and in the vehicles we drive, provide us with the means by which we can achieve long-term energy independence.

Though we have a near infinite renewable energy supply, the time we have to use these resources to avert the worst of global climate change is finite. Keeping global temperature increases below 2 degrees Celsius requires that industrialized nations reduce their greenhouse gas emissions 80% by 2050. Instead of approving projects that will increase global emissions, we should focus our efforts on adopting and implementing policies that will ensure these targets are met. President Obama’s rejection of the Keystone XL permit can provide advocates of a clean energy economy with additional momentum to keep pushing for the policies and energy projects that will protect future generations and continue to push back against those that threaten them.

While not entirely a surprise, the President’s decision to not approve the Keystone XL pipeline, a project that has the potential to create 20,000 immediate jobs and to deliver 700,000 barrels of oil per day to US markets, is extremely disappointing. But more than that, it’s a huge blow to American workers who were looking forward to, and even desperate for, the jobs that the project would provide. And the fact that the Administration made this announcement less than 24 hours after the President’s own Council on Jobs and Competitiveness specifically called for growth in the energy sector is truly mystifying.

With gasoline prices at record annual highs and Iran threatening the Straits of Hormuz, there is simply no excuse for the Administration not to move forward with this project now. If you look past the politics of this decision, it is clear that the pipeline is in the best interest of all Americans – for our economy, for our energy security and for job growth.

The pipeline, and the many scientific and environmental reports that support its development, has been under review at the State Department since 2008 and the final EIS was issued last August when the State Department said a decision would be made by the end of 2011! The claims that the ‘arbitrary’ deadline could not be met frankly seem like arbitrary excuses.

Until this pipeline is constructed, the US will continue to import millions of barrels of oil from the Middle East, Venezuela and other foreign countries that do not share the values of Americans and Canadians. The rejection of this pipeline will do nothing to stop the Canadian oil sands from being developed. If the US rejects this oil, there are plenty of foreign buyers lining up to take advantage of it.

Rejecting this pipeline means that we will continue to import a significant amount of foreign oil, our energy sector will continue to struggle for needed jobs and our energy demand will continue to grow. We need all forms of energy – renewable energy sources like wind and solar are critical to a diverse energy portfolio but we cannot continue to ignore the fact that the US, and the rest of the world for that matter, will continue to consume fossil fuels regardless of whether or not this pipeline is built.

TransCanada has made clear their intentions to reapply for the Keystone XL Pipeline in the near future. Let’s put our countries energy and economic needs, and not politics, at the forefront of our decision making process next time.

(Note: NPRA is changing its name to AFPM, the American Fuel & Petrochemical Manufacturers, on Jan. 25).

Energy is a strategic commodity vital to the functioning of every society. When energy is in short supply, every family suffers, workers lose their jobs, and a nation is crippled and subject to foreign threats and intimidation.

Even the prospect of energy shortages causes massive and painful price escalations in the world market and disruptions in the world economy. We have experienced these calamities since the first oil embargo of 1973. Since then, military and political tensions in the Middle East have become routine.

Today Americans are understandably worried about current Iranian threats to block the vital oil supply artery of the Strait of Hormuz, as well as threats to the availability of oil produced in other unstable nations around the world.

Americans are worried by the stubbornly high U.S. unemployment rate, which is causing immense suffering for millions of families, reducing government revenue and weakening our economy.

It does not and should not have to be this way.

Unfortunately, instead of acting to lessen the severity of all these problems, President Obama has made them even worse by his refusal to allow construction of the Keystone XL pipeline.

The president’s rejection of a construction permit for Keystone XL harms American consumers who need fuel, American workers who need jobs, and America’s economic and national security.

It’s hard to believe that President Obama has rejected a steady, secure and reliable supply of oil from our close friend and neighbor Canada. Fortunately for our nation, right now 99 percent of Canada’s crude oil exports go to the United States. This is a tremendous blessing, but President Obama is treating it like a curse.

Canada’s oil reserves are second only to Saudi Arabia. America imports more oil from Canada than from all Persian Gulf countries. We couldn’t have a better neighbor.

But Canada’s leaders have made clear that if the U.S. won’t buy their oil, they won’t abandon development of their oil sands. Instead, they have said they will ship Canadian oil across the Pacific to China and other Asian nations. That will result in America having to import more oil from other countries. Sending Canadian oil to Asia would actually increase global greenhouse gas emissions, according to a 2010 study by Barr Engineering.

President Obama’s action to block construction of Keystone XL is just the latest example of a war he and his administration have been waging against the fossil fuels that have provided the American people with proven and reliable energy for more than 100 years. The main casualties of this war are American consumers and workers.

The president has made no secret of the goal of his anti-fossil fuels policy. He wants to raise the cost of gasoline and diesel fuel for American consumers and businesses so that so-called “alternate” energy sources are more competitive. Never mind that these so-called alternates are expensive, impractical, and in some cases don’t even exist.

Another example of this anti-fossil fuels policy is overregulation of the refining and petrochemical manufacturing industries. This overregulation is destroying jobs, raising consumer costs, and making America more reliant on foreign suppliers – some of them in countries hostile to America. The overregulation has no significant environmental benefit, and sometimes actually harms the environment.

The Keystone XL pipeline proposal has been studied exhaustively for more than three years and has been shown beyond any doubt to be safe and in America’s vital national interest.

The United States already relies on a network of more than 168,000 miles of liquid pipelines to safely and efficiently transport oil to serve the American people, and the Keystone XL pipeline would be a valuable addition to this network.

Building the $7 billion Keystone XL pipeline would create 13,000 construction jobs and 7,000 manufacturing jobs. Construction would create another 118,000 spin-off jobs.

Unions favor this project. Both the Laborers’ International Union and the Building and Construction Trades Department of the AFL-CIO have issued statements that have condemned President Obama’s decision to block the pipeline.

Even President Obama’s own Council on Jobs and Competitiveness recently issued a report calling for moving forward quickly with projects that deliver electricity and fuel, including pipelines.

It’s a national disgrace that President Obama has given in to political pressure from extremist opponents of fossil fuels. Rejecting a construction permit for the critically important Keystone XL pipeline may be good politics to appeal to fringe protest groups, but its bad policy for the American people.

Congress needs to act on a bipartisan basis to find a way to bring the Canadian oil our nation needs to America to serve American consumers and business and to create jobs for our citizens.

The Keystone Pipeline has been mired in controversy from the very beginning, due to major lost of ancient forests, insatiable consumption of water as well as its pathway over critical aquifers under the US bread basket, and exaggerations over the actual employment numbers. An unusual coalition of conservative farm groups, environmental scientists, and environmentalists joined forces to raise alarms. The only non-industry employment study dropped the project's claims of millions of jobs to 2,500 part time jobs to build the pipeline. While carbon intensity is extremely higher, the proponents have claimed that it's a small part of overall US fuel, so it will have minimal emissions impact; and then claim the opposite stance that the pipeline delay will have major energy impact. But the temporary killer is that Congress tried to accelerate the regulatory process during an election year which oversteps Administration authority - and there was no way that was going to work, no matter what the merits. The President made a smart decision - do not undervalue risk, review judiciously, suggests ways to mitigate harm, and consult to a greater degree with State and local governments. Oil projects have very little impact on renewable electricity such a solar and wind, because oil accounts for less than 5 percent of electric generation.

The President’s decision to reject the Keystone XL project is an insult to the intelligence of anyone familiar with the issue. The justification that the Congressional deadline failed to provide enough time for him “to determine whether the Keystone XL pipeline is in the national interest” doesn’t withstand scrutiny. In the 3 years, 4 months, 5 days that have passed since TransCanada first filed the permit, the administration has reviewed over 10,000 pages of environmental studies, which showed the proposed pipeline posed no significant risk (a conclusion the State Department has reached twice).

For a point of reference, recall the TransAlaskan Pipeline (TAP). Congress approved the project in just around a year in 1974. And it was built in less than three. The TAP project was far more environmentally and technically challenging. In the decades that have followed, our understanding of engineering and environmental protections has improved.

Despite these advances and the years of positive environmental reviews on Keystone XL, EPA Administrator Jackson, the Jobs Terminator, weighed in and the White House retreated.

This is clearly a case of over-analyze and under-decide for political purposes. President Obama’s track record has made clear he harbors a bias against fossil energy and the benefits it provides. Just a week before rejecting this shovel ready project that would immediately create tens of thousands of jobs, the President embraced his Jobs Council report, which emphasized energy development and, in particular, the timely development of pipeline infrastructure.

Objections raised by the President’s environmental base don’t hold water. Regardless of America’s involvement, Canada’s oil sands will be developed. The question is whether that oil ultimately transported to the U.S. or Asia. Transporting the oil to Canada’s west coast and shipping it to Asia where it will be processed in refineries that are not as efficient or clean as ours carries with it far greater environmental risks. Further, the President could have approved the project on the condition that Nebraska and TransCanada agree on a route through the state. The Nebraska legislature unanimously approved legislation granting approval authority to the Governor. Of course, the threat to the Ogallala Aquifer was not a serious one as shown by a University of Nebraska geology professor.

Like Presidents before him, President Obama has given lip service to reducing imports from unstable regions of the world. In three years in office, he has done little beyond talk, instead giving large subsidies to alternative energy projects that have failed. The Keystone XL pipeline gave him an opportunity to substitute 400,000 barrels of Canadian oil for oil from the Persian Gulf. Even Iran’s bluster about shutting the Strait of Hormuz was not enough to get him to say ‘no’ to his environmental constituency.

The President’s failure to act to strengthen our alliances, reduce the risks associated with Persian Gulf imports and to promote a major job creation project is a dereliction of duty. Canada is one of our strongest allies. But the shabby treatment by this Administration on the Keystone issue puts an unnecessary strain on our relationship. A time will come when we need Canada’s cooperation and support. President Obama has made getting that harder. Moreover, 20 to 25 million Americans are un- or underemployed. The national unemployment rate is north of 8% and would be higher if those who have given up looking for jobs were counted.

The U.S. Chamber of Commerce recently released a study entitled “Progress Denied” that documented the economic loss of energy projects that are being delayed. While the Chamber acknowledges that not all of the projects it reviewed would be completed in the absence of regulatory barriers and obstructionist actions, the study demonstrates that the private sector is prepared to make substantial investments that would contribute hundreds of billions of dollars to economic growth and create a significant number of new jobs. Keystone XL is just one example of the Administration’s failure to walk the walk when it comes to job creation and restoring healthy economic growth.