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Anti-pipe folks say he's just "kicking the can" to boost election hopes, pipe supporters say he's killing jobs

In one fell swoop the President of the United States (POTUS) Barack Obama managed to infuriate Canadians and Republican U.S. politicians alike.  Those are typically mutually exclusive feats, but his decision to bow to activist pressure and shelve the development of a critical oil pipeline is drawing criticism from both sides.

I. To Oil Sand, or Not to Oil Sand, That is the Question

Dubbed the Keystone XL pipeline, the pipe in question was supposed to stretch 1,700 miles across the U.S. plains, transporting process oil sands crude -- a low to mid-grade crude to U.S. refineries in Texas for procesing into fuel (the initial removal of sand would occur at local facilities in Alberta). 

Currently the Alberta tar sands are underutilized due to insufficient refining capacity.  Meanwhile refineries in Texas sit idle due to insufficient domestic oil supplies.  The pipeline would have remedied both problems, pumping the equivalent of 700,000 barrels a day (249.2m barrels a year) into the U.S. market.  

The U.S. uses 19.15m barrels/day, so the new supply would offer approximately 3.7 percent of the domestic demand.  While that may sound trivial, it would allow the U.S. to potentially entirely drop one of its more hostile sources of foreign oil, such as Venezuela (806,000 barrels/day) or Iraq (637,000 barrels/day).

Aside from the direct savings in life and financials stability that could yield, the pipeline also offered more benefits.  According various studies the construction would create between 5,000 and 20,000 jobs.  It would also give $5B USD in new tax revenue.

Iraq Militants
The pipeline could completely eliminate American dependence on volatile Iraqi oil, a dependence that has cost the lives of many American servicepeople. [Image Source: Dalje]

Like everything in the world, though, there was a perceived downside for these gains.  First, the pipeline would likely cross through personal property dropping local value.  Second, it could potentially elevate local risks of toxic oil spills -- a major public fear in the wake of the 2010 Deepwater Horizon oil spill.

Last, but not least oil sands require a more intensive separation process than standard oil.  The cost of getting all that sand out is a 10 to 30 percent emissions hike in greenhouse gases [source].  As you might guess, the amount of emissions is tied to the cost of the refining process, so the final number would like be closer to a 30 percent increase, than the lower estimate.

However, that emissions hike occurs largely at the extraction level, meaning that as long as Alberta finds someone to sell/ship its crude to, the emissions hit will be taken, regardless of whether that someone happens to be the U.S.  It's unclear whether the pipelines environmentalist adversaries realize this and are just morally opposed to being involved.

Recent studies have shown that in the last decade global temperatures flatlined, even as greenhouse gas emission continued to rise.  Yet many environmentalists and their powerful political allies remain convinced that the long-term trend will be continued warming.  Many of these parties predict a doomsday "runaway warming" scenario, in which soaring temperature amount to mass humans deaths.

Groups like 350.org, Bill McKibben, Bold Nebraska's Jane Kleeb, and Friends of the Earth decried the potential environmental (mostly global warming) impact of the pipeline and threatened to drop support for President Obama if the project was granted a speedy approval.  If these groups sound familiar, they're among those who attacked the POTUS on his support of modern nuclear power -- pressure that the President Obama caved to in the wake of Japan's Fukushima nuclear accident.

Further threats to the project came from the Republican-controlled Nebraska State Senate, which looked to take legal action [PDF] to block the pipeline.  The state senators were upset about the oil pipe crossing the state's key water supply (aquifer).

It didn't help that the State Department received a complaint [PDF] that the pipe operator TransCanada (TSE:TRP) -- the pipeline company -- had a business relationship with the "independent" contractor hired by the State Department to conduct the review.  The pipeline supporters saw their attacks on the President regarding insider actions with "green" firms like Solyndra turned back on them.

Reports of robocalls erroneously indicating public support also have been circulating around the blogosphere, damaging the momentum for approval.

II. POTUS Caves to Pipe Critics, "Kicks the Can" to 2013

As an apparent result of these cumulative protests the Obama administration has punted the approval process two years out.  The State Department announced this week, that approval "could be completed as early as the first quarter of 2013."

The key words there are "could" and "2013".  The State Department primarily blames the Nebraska state government, commenting, "Given the concentration of concerns regarding the environmental sensitivities of the current proposed route through the Sand Hills area of Nebraska, the Department has determined it needs to undertake an in-depth assessment of potential alternative routes in Nebraska."

But it's seems likely the decision also had something to do with the Obama administration fearing the loss of votes in the upcoming 2012 presidential elections.

President Obama faced enormous pressure, even from his own staff.  Department of Energy Secretary Steven Chu (Ph.D) was reportedly fearful that the project would kill alternative energy jobs and investment.  He pointed to a Cornell University study, which claimed that the project would result in net job loss due to a negative impact on the alternative energy sector.

Cornell Report
A Cornell University report broke with most analyses, claiming the pipe would cost jobs.
[Image Source: Cornell University]

III. Obama Receives Most of the Punishment, Little of the Praise for Choice

Ironically the move is earning the President less support than he may have hoped.  While Daniel Kessler, spokesperson with Tar Sands Action, commented, "This is a major victory.  It's a testament to the thousands of people who came out to protest in the streets, and we think the president responded to that," other critics scoffed at the decision.

Glenn Hurowitz, a senior fellow at the activist think tank Center for International Policy, writes in a piece in The Huffington Post, "This is an extraordinary achievement for the thousands of grassroots activists... [but] I'm a little dismayed at suggestions that this kick-the-can decision means environmentalists will enthusiastically back President Obama in 2012. Is the price of an environmentalist's vote a year's delay on environmental catastrophe? Excuse me, no."

Meanwhile opponents are pointing their barbs primarily at Obama, overlooking the activist and local political action.  Writes American Petroleum Institute President Jack Gerard, "This decision is deeply disappointing and troubling.  Whether it will help the president retain his job is unclear, but it will cost thousands of shovel-ready opportunities for American workers."

House Speaker John Boehner (R-Ohio) was even more pointed commenting, "More than 20,000 new American jobs have just been sacrificed in the name of political expediency. By punting on this project, the president has made clear that campaign politics are driving U.S. policy decisions -- at the expense of American jobs."

In short, as with many of his recent actions President Obama finds himself receiving most of the punishment, but little of the praise for actions he set in motion.  In trying to walk the tightrope of pleasing both sides, he has badly slipped -- many anti-pipe advocates are reprimanding the President for merely shelving rather than killing the decision, while the pipe's supporters are attacking the President for shelving the product.

President Obama is sad
President Obama faces criticism from all sides for the way he punted on the pipeline approval. [Image Source: JEWEL SAMAD/AFP/Getty Images]

TransCanada is disappointed, but hasn't given up on the pipe.  It's sunk $1.7B USD into steel, which will now sit in warehouses for two more years.  Company president and CEO Russ Girling optimistically comments, "We remain confident Keystone XL will ultimately be approved.  This project is too important to the U.S. economy, the Canadian economy and the national interest of the United States for it not to proceed."

One poll [source] found 85 percent of Americans to strongly or moderately agree with taking advantage of oil sands.  The poll was sponsored by the American Petroleum Institute, but it was conducted by the respected Harris Interactive agnostic metrics firm.  If those numbers are even close to reality, the president may be in trouble should he be pitted against a strongly pro-oil sands candidate like Ron Paul.

If the U.S. chooses not process Alberta's oil, there's already someone stepping up to the plate to take its place -- China.  It's looking to pour billions to building an alternate pipeline to west coast of Canada for affordable shipping to Asia.  The only thing standing in its way?  You guessed it -- local property holders and environmentalists in western Canada -- who are apparently just as eager to block the project as their American counterparts.

Sources: The U.S. State Department, CNN Money, The Huffington Post, Mining.com



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RE: All I can say is
By FITCamaro on 11/11/2011 7:38:01 PM , Rating: -1
Oh I'd elect Ron Paul over Obama even if he tried to assassinate Obama on live television.

Ron Paul's problem is himself. Would he make a bad president? No. Because his foreign policy would never happen. He can't close down bases and recall all troops from around the world on his own as president. We'd still get the benefit of a president who has good domestic and fiscal policy though.

But I'd rather have a president who supports the idea of the US being the dominant nation in the world. Rather than one hiding behind a fence hoping nothing bad ever happens and then trying to ignore it when it does.


RE: All I can say is
By JasonMick (blog) on 11/11/2011 11:46:21 PM , Rating: 5
quote:
Oh I'd elect Ron Paul over Obama even if he tried to assassinate Obama on live television.

Wow wow wow, that's just too much. I can see saying you want Obama out of office, but suggesting you'd support someone attempting to murder him -- even in jest? That's just too nuts.

I didn't like much of Bush Jr.'s policies and I'm finding I don't like much of Obama's policies either. But I wouldn't wish death on either of them or any U.S. President ever no matter what political party. Anyone who tried to murder a U.S. president, no matter how good or bad a president you or I think they are, should be thrown in jail to rot for those actions.

Don't like Obama? Don't like Romney? Don't like George W. Bush? How about taking a bit of responsibility and recognizing that it's Americans who have allowed this political system to take root -- a system where the two parties essentially are only different in superficial political pandering, for the most part, while bending over backwards to their corporate masters of choice who paid their way into office.

Think American politicians are representing YOU when nearly half the money that it takes to get them elected is coming from corporations? No way. They're looking out for their big donors, for the most part, because the U.S. has some of the most lax campaign finance laws in the developed world.

Since when did corporations get to vote? There's a very simple solution. Ban corporate contributions at a party level; make it a zero-tolerance criminal offense for any candidate accepting corporate campaign contributions (e.g. bribes) from making decisions directly effecting that company's business sector; and last but not least make it a criminal offense for fiscal officers at any corporation found funneling money through the system.

With that simple law, you're still allowing corporate contributions, assuming they really believe in the candidate and aren't just looking to buy a favor. Of course, don't hold your breath about many corporations donating in such an atmosphere -- they're not in the business of giving away money; they pay to get a bigger payout in return, often at the expense of the taxpayer.

But returning to the topic of the POTUS, the suggestion of supporting his murder is reprehensible, no matter how much corporate money he's taking or how much public health care he's promising.

quote:
But I'd rather have a president who supports the idea of the US being the dominant nation in the world.

And yet the U.S. armed forces donate more to Ron Paul than any other candidate. <sarcasm>I'm sure they're doing that because they're hoping for the U.S. to lose its dominance?</sarcasm>

Or did you think that maybe the U.S. military supports Ron Paul's plan because it makes sense financially and safeguards the U.S.?

You can exercise international dominance far more cheaply without foreign military bases (occupying forces, in effect)and without funneling weapons to insurgents.

When Ron Paul talks about foreign policy change, he's talking about stopping things like the U.S. giving weapons to Libyan insurgents (along with the rest of NATO). We poured weapons on the region, taking on the role of arms dealer in a local conflict (while turning our back on other equally tragic murderous abuses of power like Syria). Now we're HOPING those weapons get returned to us:
http://www.wired.com/dangerroom/2011/08/gadhafis-l...

Whoops, thanks Obama.

If Ron Paul's philosophy was applied in the 1980s, the U.S. would never have funneled the weapons to Iraq that Saddam Hussein used to kill his own people and invade Kuwait:
http://www.cbsnews.com/stories/2002/12/31/world/ma...

To be fair East Germany (largely ex-Nazi corporations) and the UK (who was at the game of hegemony long before modern America) gave Iraq MORE weapons than we did. But our meddling certainly made the situation worse for ourselves and others in the future.

Likewise, we won't know the impact of handing weapons like candy to the Libyan insurgents, but why take the risk in the first place?

As for the issue of military bases and occupying forces, Britain is the only major power to maintain anywhere close to the number of permanent foreign bases as us.

Is that really who we want to model our nation after -- a faded colonial empire whose government to this day idolizes a monarchy?

And what's the use of these occupying bases? Is it worth spending billions to maintain them, when we don't have enough money to pay our bills at home and are getting our government's credit rating downgraded?

The answer is a resounding no. If the nuclear community condoned us crushing a non-nuclear foreign nation we could do it with or without the costly foreign military bases.

Heck, Britain proved that point for us:
http://en.wikipedia.org/wiki/Falkland_Islands_War

It crushed Argentina's less technologically advanced forces almost entirely using troops shipped from the homeland.

We could do the same if our government and the American people ever felt it absolutely necessary.

In the meantime we'd avoid the massive cost of maintaining bases overseas that are only sporadically used.

To give a practical analogy, it'd be like if I only travel to San Antonio, Texas once ever 10 years for a story, it'd make more sense to rent a car and hotel room rather than buying a house and a car and having to periodically take trips to maintain them in hopes that the time might someday come for me to use them.

I think Ron Paul's argument has a lot of logic behind it.
quote:
Rather than one hiding behind a fence hoping nothing bad ever happens and then trying to ignore it when it does.

A final comment. A draw down in foreign troop deployment and sending weapons to foreign conflicts is not "hiding". Anyone who's taken martial arts can tell you that the true definition of strength is learning to defend yourself, not to attack.

That's the role of a military in the modern era -- to defend you. You don't have to occupy foreign regions to defend yourself. Iraq, Pakistan, and Libya aren't going to invade us. And if we practice good police work, intelligence gathering, and border control even their craziest people won't stand a threat to us in terms of domestic terrorism.


RE: All I can say is
By Reclaimer77 on 11/12/11, Rating: -1
RE: All I can say is
By FITCamaro on 11/13/2011 8:49:50 AM , Rating: 1
Fast & Furious has resulted in the deaths of dozens if not more. Not 6-7. 6-7 US citizens sure. But in Mexico, the drug cartels are quite happy with the guns the Obama administration sold them and are using them to kill anyone who speaks out against them.

And thank you for breathing a sense of reason into my last post. Liberal groups burned Bush in effigy on many occasions and publicly shouted they hoped he died. Did the vast majority of the media care? Nope. "Right to free speech" it was called.


"We can't expect users to use common sense. That would eliminate the need for all sorts of legislation, committees, oversight and lawyers." -- Christopher Jennings














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