(CNSNews.com) – The proposed Keystone XL pipeline to carry crude oil from Canada will only benefit our northern ally, and will neither lower gas prices in the U.S. nor entail a “massive jobs bill for the United States,” President Obama said while traveling in Asia last week.
During a press conference Friday in Yangon, Burma, Obama was asked about the project, which has been under review by the State Department for six years and faces a Senate vote on Tuesday.
“Understand what this project is,” he replied. “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 U.S. gas prices,” he added.
Obama’s remarks contradict other assessments – including those of the Departments of State and Energy – that the 1,179-mile pipeline could not only create thousands of American jobs and pump billions of dollars into the U.S. economy but also increase the nation’s energy security.
The American Petroleum Institute, the trade association that advocates on behalf of the U.S. oil and gas industry, on Monday issued a plea to Obama about the pipeline and its benefits.
“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,” API President and CEO Jack Gerard said in a statement.
“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,” he added.
In a commentary on Friday the Wall Street Journal questioned Obama's understanding of global economics and the oil trade.
“Someone should tell the President that oil markets are global and adding to global supply might well reduce U.S. gas prices, other things being equal,” it said. “A tutor could add that Keystone XL will also carry U.S. light oil from North Dakota’s Bakken Shale.
“So even if he thinks that bilateral trade only helps Canada, he’s still wrong about Keystone.”
TransCanada, the company in charge of the Keystone XL pipeline construction, calls it “the definition of shovel-ready infrastructure project,” and cites the State Department’s own findings. (The department is in control of the project’s destiny because of its “international” element.)
“Almost overnight, Keystone XL could put 9,000 hard-working American men and women directly to work,” TransCanada says on its website. “The U.S. State Department’s Final Supplemental Environmental Impact Statement found that the project would support more than 42,000 direct and indirect jobs nationwide.”“In addition to construction jobs, an estimated 7,000 U.S. jobs are being supported in manufacturing the steel pipe and the thousands of fittings, valves, pumps and control devices required for a major oil pipeline,” it states.
“TransCanada has contracts with more than 50 suppliers across the U.S., including companies in Texas, Missouri, Pennsylvania, Michigan, Oklahoma, South Carolina, Indiana, Georgia, Maryland, New York, Louisiana, Oklahoma, Minnesota, Ohio, Arkansas, Kansas, California and Pennsylvania.”
TransCanada also cites a Canadian Energy Research Institute prediction that Keystone XL will add $172 billion to America’s gross domestic product by 2035 and will create an additional 1.8 million person-years of employment in the United States over the next 22 years.
The pipeline will also make the U.S. less dependent on foreign oil, thus increasing energy security, it says, citing a Department of Energy study.
“Keystone XL Pipeline will have the capacity to transport 830,000 barrels per day of crude oil from Canada and the continental United States to refineries on the Gulf Coast, where it can displace much of the higher-priced oil those refineries currently import from overseas,” TransCanada says.
“This view is backed up by a December, 2010 U.S. Department of Energy study which states: ‘Increased Canadian oil imports will help reduce U.S. imports of foreign oil from sources outside of North America.’”
In a move seemingly unheard of just weeks ago, the U.S. Senate is set to vote on Tuesday on legislation that would approve the Keystone project, a bill passed by the House of Representatives last week.
Obama has said he has not changed his position on the pipeline but has not specifically said he would veto the bill if it reaches his desk.
Asked again about the project at the end of a G20 summit in Brisbane, Australia on Sunday, Obama raised another potential objection – climate change.
“We’re going to let the process play itself out,” he told reporters. “And the determination will be made in the first instance by the Secretary of State. But I won’t hide my opinion about this, which is that one major determinant of whether we should approve a pipeline shipping Canadian oil to world markets, not to the United States, is: does it contribute to the greenhouse gases that are causing climate change?”