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January 23, 2012

Blocking Pipeline Worsens U.S. Problems: National Journal

By Charles T. Drevna

President, American Fuel & Petrochemical Manufacturers

From an op-ed in the National Journal

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 also concerned for the safety of the brave men and women in our military, whose mission is to keep the oil lanes open.

And 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.