A Keystone Veto Puts America at Risk
The Keystone XL pipeline has now been approved by both houses of Congress and will be sent to the president’s desk within the next ten days. Obama has vowed to veto the bill, and it will be interesting to hear his excuse for doing so. Having stated time and again that he “has not made up his mind,” he will have to come up with something decisive that has occurred within the past few weeks. Or perhaps he is just a slow thinker.
The reality is that Obama seems to have made up his mind a long time ago. He remained “undecided” so as to avoid the issue during the 2012 and 2014 elections. Now that he is a lame duck, his true colors are coming out. Obama opposes the pipeline because his big-money environmental backers oppose it. End of story.
Not that the president is going to admit that his veto is payback for his largest campaign contributions -- or a down payment for future donations to his party. Tom Steyer, the Democratic Party’s biggest donor in the 2014 election cycle, ponied up an estimated $80 million. Even though that money failed to retain control of the Senate, environmentalists made their point. If Democrats want to have a chance in 2016, they need to suppress fossil-fuel development over the rest of Obama’s term. That is what the expected veto is all about.
Whatever the president says in support of his veto, it won’t focus on environmentalist influence-peddling. What Obama might say is that the pipeline is no longer needed. The world is awash in oil, so who needs a pipeline to bring “dirty oil” from Canada’s oil sands to U.S. refineries on the Gulf of Mexico? Domestic drillers are supplying us with most of what we need. OPEC seems eager to sell us the rest at rock-bottom prices. The recent decline in oil prices seems to have provided Obama the excuse he needs. But not really.
The truth is that we do need that supply of Canadian oil, or will sometime soon. Even with the technological advances of fracking, domestic producers are now supplying only about 60% of the oil that Americans use. According to the U.S. Energy Information Agency, net imports accounted for 40% of U.S. oil in 2012 (the last full year of figures available from EIA). Of this 40%, almost a third came from the Middle East, with another 15% coming from Russia and Venezuela -- not exactly the most reliable suppliers.
Increased domestic production has brought jobs and prosperity to our economy, but it may never be enough to supply 100% of our needs. The U.S. Energy Information Agency predicts net imports of 26% in 2020. 2015 reductions in rig counts may raise that figure, and significant dependence on imports will continue well beyond 2020.
That is important, because U.S. oil demand is unlikely to decline significantly until mid-century, if then. That is because conservation measures, including stricter mileage standards, will be balanced by a growing population and a greater number of total miles driven.
As for the electric car, it is still just a tiny sliver of the U.S. car market, reliant on state and federal subsidies for its continued existence. Contrary to the opinion of green car enthusiasts, the U.S. will continue to rely on fossil fuels for transportation well into this century.
According to Exxon’s “Outlook for Energy: A View to 2040,” oil consumption will remain roughly at current levels in the developed nations, including the U.S., over the next 25 years. Meanwhile, as a result of a growing middle class, global demand will increase for all forms of energy, including a 30% increase in demand for petroleum -- and U.S. consumers will be competing with the rest of the world for that oil.
In their “World Energy Outlook 2014 FactSheet,” the International Energy Agency presents a similar scenario, though with a somewhat lower rate of increase. IEA predicts that global demand for oil will rise from 2014 levels of 92 million barrels per day to 104 mb/d by 2040. It also emphasizes that “only the large producers of OPEC can meet long-term demand.” The U.S. is still at the mercy of OPEC, only less so than in the past. The only thing that can diminish our dependence on OPEC is Canadian oil.
None of these facts will likely make their way into the president’s justification for vetoing the Keystone XL pipeline. But none of his excuses can hide the fact that his veto puts our country at risk.
With an estimated long-term dependence on foreign oil suppliers of 25%, the president should be doing everything possible to secure future sources (as well as supporting domestic drilling, particularly on federal lands). Instead, he is putting us at the mercy of oil-rich nations that are unstable or hostile. The list of unreliables includes nearly every oil supplier in the Middle East along with Russia, Venezuela, and Nigeria. The only truly dependable foreign supplier is Canada.
Approving the Keystone XL pipeline is an insurance policy in terms of our national security. Canadian oil is not subject to a blockade or terror threat. It is unlikely that Canada will deploy oil as a means of political blackmail. The flow of oil from Canada to the U.S. benefits both countries and binds the countries together even more tightly than at present. And Canadian oil sands hold proven reserves of 168 billion barrels, enough to last for generations. Yet Obama is forcing Canada to ship that oil to Asian buyers. It is one of the greatest policy mistakes in modern history.
If politicians would only put the country first, a rational energy policy, including the promotion and streamlining of oil and gas production by government agencies, could be arrived at. Instead, we have a president signaling his intention to veto a major pipeline project on the basis of nothing more than political expediency. That is not a rational energy policy. It is nothing but political expediency disguised as environmental stewardship.
Jeffrey Folks is the author of many books on American politics and culture, including Heartland of the Imagination (2011).