What You Don’t Know About the Keystone Pipeline

The debate over the Keystone XL pipeline has largely centered on jobs that would be created, oil security that would be provided and suggested environmental concerns. Here are some other facts about the project (rejected earlier this year by the Obama administration):

  • Before this debate, few knew the State Department was in charge of the siting process for oil pipelines that cross international borders. That emanates from a 2004 executive order.
  • The Canadian oil sands, from which the pipeline would originate, are a mixture of sands, clay, water and bitumen, which is heavy, thick oil that must be heated or diluted before being pumped into a pipeline. Canada has 174 billion barrels in reserves, second only to Saudi Arabia, and 97% of those reserves are oil sands.
  • Canada is the largest supplier of imported oil to U.S. markets. According to a study commissioned by the U.S. Department of Energy, the Keystone project could reduce imports from the Middle East and Venezuela by 40%.
  • The 1,700-mile project will bring 830,000 barrels per day of Canadian oil to Gulf Coast refineries and help alleviate the current bottleneck of oil supplies at Cushing, Oklahoma.
  • Project owner TransCanada has resubmitted its application for the segment crossing the international border and recently announced it plans to construct a 435-mile leg from Oklahoma to the Gulf Coast, which requires no federal permit.

As expressed earlier here and in many other quarters, what was the administration thinking? Let’s get the ball rolling on this critical project. The benefits are too numerous.

Keystone XL Pipeline Wins on Capitol Hill Not Enough

The Congressional scoreboard reads 5-2 in favor of the Keystone XL pipeline. But few believe the job-creating project to transport oil from Canada to the U.S. Gulf Coast is any closer to its needed U.S. approval.

The House passed (293-127) a federal transportation bill Wednesday that will now go to conference committee. A provision in that legislation would force the administration to approve the pipeline.

It is the fourth time the House has given its approval on the project, expected to create thousands of jobs during the construction phase and help increase energy security in the long term. The Senate has taken three votes, passing it once as part of the payroll tax deal late last year and defeating it twice.

Not to be forgotten is the importance of the transportation bill. The Senate passed a two-year, $109 billion program two weeks ago. It is expected to be the basis for the conference committee negotiations.

The White House has already threatened to veto the highway bill if the Keystone language remains. Both, however, are critical to funding ongoing infrastructure needs and putting people back to work.

In the upcoming BizVoice magazine (available May 3 in print and online), I’ll have a one-on-one interview with Canadian Consul General Roy Norton, who talks about the importance of this project, the critical Ambassador Bridge between Detroit and Windsor, and other opportunities between the two North American neighbors.

Why We Endorsed Sen. Lugar Today

We announced our endorsement of six-term incumbent Richard Lugar for the U.S. Senate today. The endorsement was made by the Indiana Chamber Congressional Action Committee, the federal political action committee of the Indiana Chamber.

"Senator Lugar has compiled a most impressive pro-economy, pro-jobs voting record throughout his years of service," said Kevin Brinegar, president of the Indiana Chamber of Commerce. "His focus on helping grow Indiana businesses and putting Hoosiers back to work is exactly what we need in Washington."

Lugar has been a long-time leader on many energy, national security, foreign policy and agricultural issues, among others. His effort to overcome bureaucratic obstacles and make the Keystone XL pipeline a reality – and create jobs in Indiana and throughout the country – is just one current example of his continued leadership.

"In a time when congressional approval levels are at record lows and partisanship is all too common," Brinegar adds, "Sen. Lugar should be applauded for his ability to reach across the aisle and work with members of both parties. We believe Hoosiers strongly benefit from his expertise and experience."

Fewer Voters Blame Pres. Obama for Gas Prices

Personally, when I see a hyperpartisan political opponent of a sitting president prattle on about how he’s responsible for high gas prices, I generally roll my eyes. (Truth be told, I generally roll my eyes when hyperpartisan people say anything.) It just seems like there are a lot of factors — OPEC-related and the like — that are out of America’s hands (although President Obama’s rejection of the Keystone XL Pipeline likely won’t help matters). But according to a recent Washington Post article, fewer voters appear to be blaming the President for lofty costs at the pump:

Back in September 2005, gas prices surged to $2.90 per gallon across the country ($3.50 in today’s dollars), largely because Hurricane Katrina had shut down production across the Gulf of Mexico — an event that couldn’t plausibly be blamed on Bush. Yet 28 percent of Americans still blamed the president anyway. (Of course, one explanation is that voters were expressing discontent with the way the Bush administration handled the aftermath of Katrina.)

This time around, meanwhile, gas prices are even higher — the national average is now $3.74 per gallon — largely due to tight supplies and tensions between the United States and Iran (and the latter situation is something the White House actually is heavily involved with). Yet only 18 percent of Americans say the president’s responsible for pump prices. The number of Americans who are refusing to assign blame has jumped. Who knows? Perhaps after years of high gas prices a sense of fatalism has set in.

This jibes with political science research finding that, for the most part, a president’s re-election doesn’t hinge on the price of gasoline. Of course, that doesn’t mean that gas prices are meaningless — or that Obama can breathe easy about the situation. If spiking oil prices end up biting into economic growth, then the president’s prospects for re-election really would start sinking. As always, the economy matters a lot.

Insiders Say Pipeline Not Dead Yet

We’ve told you more than a few times in recent months that the proposed Keystone XL pipeline is an important project for Indiana and our country. Check out this two-minute video. After all, the $7 billion project will bring 700,000 barrels of oil a day from Canada to the U.S.

When the Obama administration recently delayed a final ruling (citing the need to reroute in Nebraska, but realistically putting off a politically tricky decision until after the 2012 election), many considered it a death knell for the proposal. But a group of energy and environmental insiders put together by the National Journal team in Washington differs with that assumption. Check out the latest.

“As long as there is substantial money to be made from developing the tar sands, they will be developed,” one Insider said.

Insiders predict (64% to 36%) that the economic and political reasons for the pipeline will eventually win out, arguing that the oil industry may hold out hope for a future Republican administration and GOP majorities in both chambers of Congress—under which the project would likely win swift approval.

Canadian pipeline developer TransCanada said that it will move the route out of Nebraska’s environmentally sensitive Sandhills area. The State Department last week proposed the rerouting to protect a massive aquifer there. Company officials, who had claimed that such a reroute wasn’t possible, said that the move will likely require adding 30 to 40 more miles of pipe to its 1,700-mile proposal.

President Obama was accused last week for making a political play with the pipeline, because the reroute would delay the decision past the 2012 election. For that same reason, though, most Energy Insiders believe the project will ultimately be approved. “Eventually, politics will be set aside,” said one.

In terms of politics, Insiders were split on whether the reroute decision and the consequent delay would benefit Obama. Just over half – 51 percent – said that the delay would help the president; 49 percent said it would not.

The delay until after the 2012 election “is a significant indicator of just how bad the Obama insiders think their election prospects are right now,“ one Insider said. In appeasing environmentalists but sacrificing some independent votes, the administration wanted to ensure it held onto its political base and contributions, Insiders said.