Columns » Ernest Dumas

Keystone: Fight ignores fact

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From all the fear campaigns launched around the election season — Obamascare death panels, secret Benghazi plots, Islamic State crazies storming the Mexican border to cut American throats, an Obama-led Ebola epidemic, national bankruptcy and all the rest — it would be hard to pick the flimsiest.

Just for academic purposes, let's choose the Keystone XL Pipeline, which Republicans jumped on four years ago when it appeared that President Obama, who had already approved one Canadian oil pipeline into the United States, might not approve the northern leg of TransCanada's proposed line from the Alberta tar sands to Oklahoma.

The president wouldn't say two years ago whether he would authorize the transnational pipeline and he still won't, although many believe that he eventually will, perhaps for a deal with the Republican Congress. It is less likely that, even then, the pipeline will be built because it is the costliest way for the Canadians to get their bitumen, the foulest pitch on earth, to the buyers around the world who might bid on it. Nebraska ranchers are in court to block it, and, if it is ever authorized, federal litigation will commence to challenge its environmental compatibility.

The Keystone follies deserve a good study by the ablest political scientists. How did a purely business issue of concern to Canadian producers and royalty owners and U.S. refinery interests (can you say "Koch brothers"?) become a burning issue to average Americans who will never be affected by it, unless it turns out to be true, as NASA's James Hansen warned, that the full development of the Canadian tar pits would be the final nail in the Earth's global-warming coffin? Even that is problematical because the Alberta tar is being developed with or without the pipeline.

But here in Arkansas and in other red venues it is a frenzied issue. Every Republican in Congress and candidate for virtually every contested office in Arkansas promised voters they would defy Obama and get the pipeline built, and fearful Democrats fell in line, too. Letters to newspapers, in save-the-world tones, cry for Obama, the pipeline tyrant, to be stopped.

The Arkansas Democrat-Gazette, which took up the pipeline cause when the president first said he wasn't sure, regularly and righteously cudgels him. After the House passed and the Senate defeated a pipeline bill this month, the newspaper characterized the president as a virtual idiot because he did not embrace it as the economic salvation of the country and for buying the palaver about the environmental harms from fossil-fuel pollution. The paper's editorialists, who think global warming is a hoax, accused the president of believing that fossil fuels were bad and that clean, renewable energy was good. And he was wrong?

Keystone began as a jobs issue. In 2012, recovery from the great Bush recession of 2007-09 was still sluggish. Unemployment was still close to 8 percent and only 2.2 million new jobs were created that year, which was better than only six of George Bush's eight years. So Republicans said Obama's dalliance on the pipeline showed that he was not interested in jobs or the suffering of the unemployed. Estimates of the jobs that the pipeline would create soared — TransCanada claimed 130,000 — and finally settled happily at 42,000. That is based on the economic model that says if I buy a big hamburger and fries at McDonald's I create six new jobs when my five bucks flushes through the economy. A Cornell University business school study put the number at 20 permanent jobs and hundreds of temporary construction jobs.

But if it indeed were 42,000 jobs, that's the number created every five days in the current so-moribund economy.

It has been a year since TransCanada completed the 485-mile segment of the Keystone from Oklahoma to refineries on the Gulf coast, the key part for U.S. interests because it ended the bottleneck of oil from tar sands in the upper Plains at the giant tank farms around Cushing. Now, all that U.S.-produced dilbit is feeding the refineries around Houston and Port Arthur that have been modified to process the heavy sludge.

The refineries would like to get the dirty, thick Canadian tar because it is so much cheaper than, say, the high-quality sweet Texas crude, and the Canadian crude, unlike domestic oil, can be exported to the highest bidder, probably China. The viscous Canadian tar is cheaper because it is expensive to refine into fuel, burning one BTU in the process of making it suitable for piping and of refining it for each three BTUs of energy that the fuel will produce.

But Keystone has become less about jobs and more about global warming. Environmentalists and climate scientists urge the president not to approve the pipeline because it might speed development of the tar pits and increase carbon compounds in the atmosphere. On the other side, so well expressed by the Democrat-Gazette, is the argument that pipeline opposition is a cruel attack on America's favorite energy source, petroleum.

Both sides are folly. Canadian crude production is booming. Canadian oil reaching the Gulf refineries, by rail and other pipeline routes, has risen 83 percent since the debate began. Canada will soon be shipping from its own ports. The Canadian producers have learned that shipping by rail is easier and cheaper than by the Keystone. Warren Buffett, America's biggest rail capitalist, must be happy. As long as a bazillionaire is pleased, why can't all Republicans be satisfied?

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