File under "half pipe pipeline". In a move that defies the rules of Corynomics, the Obama administration has signaled that it will support the construction of part of the Keystone XL pipeline. From The Hill:
TransCanada said Monday that it will begin construction on a section of the pipeline that runs from Cushing, Okla., to Texas. It would carry crude oil pumped from land in the Midwest and surrounding areas to refineries in Texas…
The Oklahoma-to-Texas project "will help address the bottleneck of oil in Cushing that has resulted in large part from increased domestic oil production, currently at an eight year high," White House press secretary Jay Carney said in a statement, echoing Obama's previous endorsement of the pipeline segment.
In a departure from the Administrations usual procedure, Carney failed to blame Bush for the increase in oil production. He might well have, since almost all of the increased production is the result of permits extended before Obama took office.
"Today on federal land, the area where the president has control, production in the Gulf of Mexico is down 30 percent. Lease sales in Rocky Mountains on federal lands are down 70 percent," Jack Gerard, head of the American Petroleum Institute said.
He says the president has put 85 percent of the outer continental shelf off limits and overall, is only making 3 percent of the areas under his control available for development.
Numbers from think tanks and the federal Energy Information Administration confirm those numbers.
Let us sum this up: the Administration says that increasing our domestic oil production is a very good idea and takes credit for the increase. It has also done everything in its power (minus three percent) to block any increase in domestic oil production.
It is difficult to see how the Administration's various decisions add up to a policy. Why did the Administration suddenly decide that part of the Keystone XL pipeline might be a good idea? Were the benefits of removing bottlenecks not just as evident months or decades before now? The Hill has a suggestion:
By supporting the southern portion of the pipeline, the White House was able to blunt Republican criticism of the administration's energy policies. But the move quickly re-opened a rift with the president's environmental base, which condemned the project.
That is the only thing that makes sense. The Administration didn't pull the plug on KXL because of any new information or arguments that came to light. The review process had been going on for three years, about twice as long as such a review usually takes. Obama nixed KXL because he was worried about soft support on the environmental left. Why did he check the box next to "partial Keystone construction" on one of those forms by means of which he conducts the nation's business alone, in the dead of night? Right now his campaign is worried about the effect of rising gas prices. Of course Keystone light won't affect energy prices until 2013, but perhaps it will "blunt Republican criticism."
This may be good campaign rhetoric but it is incoherent as policy. The same economic principles that Carney appeals to in order to justify Keystone light also indicate bringing Canadian oil down.
A big part of the opposition to KXL was motivated by an opposition to harvesting the Canadian oil sands. Blocking the pipeline won't stop oil sands exploitation, however. It will just mean that the oil will go west rather than south. It will cut through a lot more wilderness. It will be loaded onto freighters and shipped across some of the most perilous sea lanes on the planet. It will be refined in China where, to put it mildly, environmental scruples are not stronger than they are in the US. Not only will oil be exported to China, so will a lot of American jobs.
This makes no sense economically. It is far more risky for the environment than shipping the oil south. It makes no sense as foreign policy, as it decouples Canadian energy from the US and ties Canada more closely to China.
It makes sense only in terms of campaign strategy, which is apparently all that is important to the Administration at this stage. Even on those grounds, the recent decision looks dubious. If it blunts "Republican criticisms," it also numbs the tingle in the legs of the environmental lobby.
Sierra Club Executive Director Michael Brune blasted the TransCanada plan to build the pipeline segment. "TransCanada is hell bent on bringing tar sands, the world's dirtiest oil, through America to reach foreign markets," Brune said in a statement.
If we could just hook some cables up to Obama himself, alternative energy might deliver on its promise. He's spinning faster than any wind turbine ever could.