- - Sunday, December 18, 2011


Obscured by congressional infighting and President Obama’s demagogy, the Keystone XL pipeline project represents solutions to economic and security issues far in excess of what is generally appreciated.

Half-truths on all sides have obscured the project’s underlying fundamentals. Some are emerging only as additional research and technology are applied — producing, for a change, good news in that the findings boost estimates of available North American fossil-fuel reserves, even if at higher prices.

Contrary to the claims of its congressional proponents, the project is not an immediate economic bonanza. Like all other natural resource development projects, construction employment will be temporary and jobs minimal when the pipeline becomes functional. Of course, given the current environment, new non-public-sector jobs of any duration — the project is funded privately at something over $7 billion — are a godsend.

Keystone’s importance lies in its contribution to what should be a longer-term U.S. energy strategy, a consideration often missing in the current heated partisan debate.

First of all, direct access to the Canadian tar sands affords fallback access for the almost bottomless U.S. energy maw — which is still developing rapidly over the long term, whatever the short-term fall in demand from the weakened economy. Scandal after scandal is proving that the Obama administration’s so-called “green energy” strategy is corrupt, wasteful and ineffectual. Keystone, on the other hand, would put crude into the Texas petrochemical refinery complex already absorbing similar but heavier oil from Venezuela — whose reserves were recently re-estimated upward with spectacular finds on the Orinoco River.

That would give the U.S. not only an emergency alternative to the crude from Venezuela, now our fourth-largest import source, but also would offer leverage against the machinations of gringo-baiting Venezuelan President Hugo Chavez. Given that country’s long, troubled history, insurance is needed even in a post-Chavez Venezuela, which may be coming soon as the president deals with cancer.

The expanded Keystone pipeline also would pick up on its way the more attractive sweet crude from the Bakken strike in North Dakota, already one of the largest in U.S. history and apparently linked by new successful prospecting and new shale recovery technologies to huge neighboring regional deposits. With Bakken already having added an estimated 10 percent to American reserves, these deposits could turn into the largest petroleum find in U.S. history.

As the pipeline travels south, it also would untangle a supply traffic jam in Oklahoma and expand the tanker delivery scene on the Texas coast.

But radical environmentalists have chosen — with the help of the usual Hollywood suspects assuaging their guilt for gratuitously huge earnings — to make Keystone a major test. The opposition mounted despite three years of research for the State Department, which had not turned up sufficient environmental issues to block the project. When local interests in Nebraska — ignoring the relatively clean record of the country’s vast pipeline networks — argued that spills might threaten a critical local aquifer, the Canadian company countered with a $100 million detour around the sensitive areas.

It’s rumored that Secretary of State Hillary Rodham Clinton was not only not consulted but not forewarned when Mr. Obama, eyeing the 2012 election, threw a bouquet to unhappy environmentalistas by delaying a decision until after next year’s vote. But with even normally loyal trade unionists joining the outcry against the White House postponement, it was inevitable that the issue would become a cudgel for the Republicans.

Canadian threats to transfer their affections to the Chinese market might have some validity. But level-headed Canadian Prime Minister Stephen Harper — an economist and a native of Alberta, Canada’s giant provincial giant oil well — may have overestimated American common sense. Recent hints suggest that Ottawa feels it is dealing with an overburdened, troubled U.S. and has to demonstrate inordinate patience to preserve the relationship. One has to wonder what the two chief executives talk about in their frequent and what appear to be pleasant meetings. But, in fact, Canada’s role as No. 1 foreign energy supplier to the U.S. — something forgotten in much of the talk about “American energy independence” — isn’t going away in the near future. The Republicans may be seeing to that.

Sol Sanders, a veteran international correspondent, writes weekly on the intersection of politics, business and economics. He can be reached at solsanders@cox.net and blogs at www.yeoldecrabb.wordpress.com.

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