NCPA - National Center for Policy Analysis

U.S. Loses from Keystone Delay

May 6, 2014

President Obama has delayed the Keystone XL pipeline decision yet again, writes Diana Furchtgott-Roth, senior fellow at the Manhattan Institute.

If the Keystone XL pipeline, which will bring crude oil from Canada to U.S. refineries near the Gulf, is not approved, Canada's oil will head to Asia. The president's stonewalling on the issue has split his base: unions want the pipeline, while environmentalist groups are opposed.

Failure to approve the pipeline would be a serious loss for the U.S. While environmentalists want to block the pipeline for climate change reasons, failing to approve Keystone XL does not mean that the oil will stay in the ground. If the U.S. blocks the pipeline, Canada can send the oil to the U.S. by railroad, or it can send the oil to its ports to be exported elsewhere.  It can even ship the oil to Alaska and then send it south, into the United States, through the Alaska pipeline. All of these alternatives are more expensive and less environmentally friendly, says Furchtgott-Roth, than Keystone XL.

The U.S. is the party that will suffer if Keystone XL is not approved:

  • The pipeline would generate new tax revenue, and it would create jobs and economic activity within the United States.
  • Canadian investment, Furchtgott-Roth explains, creates significant spending in the U.S. as well. Caterpillar, for example, supplies Canada with trucks, and Aquatech International Corporation, a Pennsylvania company, provides technology that recycles water from the oil sands.
  • For every two jobs created in Canada, another two are created in the United States.

In rejecting the Keystone XL pipeline, the U.S. has offended its most important ally and economic partner, Canada, instead opting to refine oil from countries across the globes that are not our allies. There exist no environmental, safety, economic or national security reasons to disapprove Keystone.

Source:  Diana Furchtgott-Roth, "With the Keystone Delay, U.S. Is the Only Loser," Real Clear Markets, April 29, 2014. 


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