Written by Chriss W. Street
Canada’s Prime Minister Stephen Harper on Friday contradicted President Barack Obama’s dismissal of the job-creation potential of the proposed Keystone XL Pipeline, saying the project is important both for jobs and for energy security. His comments follow TransCanada Corporation’s announcement that as an alternative, the company is moving forward with the $12 billion Energy East Pipeline project, which would send over a million barrels per day of oil across Canada east to New Brunswick, where a multi-billion deep-water port would be constructed. Given that the U.S. State Department confirmed America would have gained tens of thousands of permanent high paying jobs and domestic oil security is in our nation’s vital security interests, President Obama may have just convinced Canada that trying to do business with the United States is a bad idea.
The Canadian Prime Minister emphasized the lasting benefits of the Keystone project: “That is that first of all our No. 1 priority in Canada is the creation of jobs, and clearly this is a project that will create jobs on both sides of the border,” Harper said. “And it is in our judgment an important project, not just for our economy and for job creation but for the long-term energy security of North America.”
TransCanada Corporation had intended to build the Keystone XL pipeline to carry 830,000 barrels per day of crude from Canada’s oil sands and the North Dakota and Montana shale fields to U.S. refineries on the Gulf Coast. But after being frustrated with Obama’s political rhetoric, TransCanada now expects move forward on spending $12 billion to construct an Energy East Pipeline to send 1.1 million barrels per day of oil from land-locked Alberta to Saint John, New Brunswick, where a multi-billion deep-water port will be built to facilitate energy exports to Europe starting in 2018.
The potential abandonment of Keystone follows President Obama’s July 24 interview with the New York Times, where he described the Keystone project as “a blip relative to the need” in terms of job creation. “Republicans have said that this would be a big jobs generator,” he said. “There is no evidence that that’s true.” The pipeline would create only 50 permanent jobs, Obama said.
The following day Fred Upton of Michigan, Chairman of the House Energy and Commerce Committee, and two Republican colleagues wrote Obama day to complaint that “Your recent comments have only added to the immense amount of uncertainty that currently surrounds the Keystone XL approval process,”
The U.S. State Department had already released a 2,000-page draft environmental review of the Keystone XL pipeline in March, which concluded approving the Keystone XL pipeline would have a small impact on overall greenhouse-gas emissions and would generate 42,100 average American jobs during the two year construction period. Private sector analysts point out the project would generate continuing economic development along its path due to the need to build new roads to service the pipeline.
Canadian oil production has increased from 2.7 million barrels per day in 2000 to 3.7 million barrels per day in 2013 and is expected to continue to rise until at least 2030 as the country continues to develop its “unconventional” energy reserves. By 2018, Canada could be the world’s fourth-largest oil producer, behind Saudi Arabia, Russia and the United States. The transformation of the United States, Canada and Mexico into the dominant producer region for energy has huge global implications.
Canada’s has always been tied to energy imports by the U.S. The possibility of large-scale exports of Canadian oil outside North America would undermine the America’s vital interest in energy self-sufficiency. A dollar spent on oil produced in Canada will be reintroduced back into the U.S. economy in the form of exports, whereas a dollar spent on Venezuelan or Middle Eastern crude only results in thirty cents of exports. Second, Canada’s land-locked oil has been trading at levels far lower than oil of similar quality being traded internationally. Forcing TransCanada to build the infrastructure to export oil to Europe will cause U.S. prices to rise.
The prospect of energy independence must be a paramount goal for the United States. Oil is the largest globally traded product in the world, and it forms the foundation for global economic activity. As the dominant military power in international waters and the largest consumer of the commodity, the United States has a keen interest in the global oil market and the places where oil is produced.
Rising oil and natural gas production in the North America creates the opportunity for U.S. foreign policy choices to be less driven by the need for foreign imports of oil from unfriendly and dangerous nations. President Obama’s failure to quickly approve the Keystone XL Pipeline will cause long-term damage to America’s military and economic vital interests.
CHRISS STREET & PAUL PRESTON Present On the Republic Radio Network in the USA and Canada “The Agenda 21 Radio Talk Show” Streaming Live Monday through Friday at 7-10 PM http://www.republicbroadcasting.org/shoutcast/shoutcast.html