XL
There was an especially egregious (sorry, those two words together are redundant) argument, regarding energy policy, put forth by a senior U.S. Democrat this past week in Washington D.C.
Construction of the Keystone XL pipeline from Hargisty, Alberta to Steele City, Nebraska, originally proposed in 2008 by TransCanada Corporation, and still waiting approval by the Obama administration, would, according to this argument, have limited employment impact. And, once completed, it would not add to America's "economic security", as product refined from the heavy oil flowing through the pipeline would be "for export". Thus spoke Nancy Pelosi, the minority leader in the U.S. House of Representatives.
One wonders from this statement whether the staff that advises Ms. Pelosi is economically illiterate, or if Ms. Pelosi is simply being a good Democrat, or both. Of course, Ms. Pelosi is not alone in her critical assessment of the pipeline. Environmental groups also object - Oil Change International, for example, noted that 60 per cent of gasoline from Texas refineries was exported in 2012, and that the "Keystone XL pipeline is a pipeline through America not to America". More on this "security argument" in a moment.
Regarding the employment question, TransCanada Corporation is budgeting for the direct hiring of, at minimum, 9,000 American workers (and 2,500 Canadian workers) - welders, mechanics, electricians, pipe fitters, heavy-equipment operators, and the like - to construct the pipeline over an estimated two-year period. Then there are an additional 7,000 American jobs created in the manufacturing of the steel pipe and associated parts. And once open, there are the permanent jobs related to the operation of the pipeline, and the direct boost to property taxes for communities along the route, revenues that typically support school and hospital employment. These impacts are well-known, and none is particularly difficult to grasp. So how does Ms. Pelosi justify her objection, even if some of these jobs are only temporary, and especially when unemployment in America is still hovering just under 8 per cent, and governments at all levels are desperate for stronger tax revenue bases?
But Ms. Pelosi also objects because the products refined from Keystone's oil would be exported, hence, she says, detracting from, or at least not contributing to, America's economic security. This argument is more than just odd. First, there are the data - figures from the U.S. Energy Information Administration (an agency funded by the U.S. Congress, and widely regarded as a definitive source for energy statistics and analysis) show that while the US has become a net exporter of refined products, this is likely a temporary phenomenon, with a return to net-importer status as early as next year. More specifically, most of the products refined on the Gulf Coast (where Keystone oil would ultimately end up) remain within America, and of course even for exported products, the refining work - and hence the jobs - are in the United States.
But the really odd part of the Pelosi objection is this - even if every bit of Keystone XL oil ended up in refined exports from the Gulf Coast, why would this be a bad thing for America? The country has run large and growing trade deficits since 1980 (in part because of oil imports), at times creating political frictions domestically and with external trading partners (especially China). So, in such an environment, a new source of exports could hardly be considered unwelcome. Moreover, since Gulf refiners are uniquely structured to process heavy oil, and have rapidly expanded capacity for such, they are hungry for this kind of raw input. In past years, heavy oil has typically come from Mexico and Venezuela. Is it not obvious to Ms. Pelosi that Keystone XL would deliver this key input from a much friendlier - and more "secure" - Canada?
Seems to this writer that Mr. Obama's approval of XL is considerably overdue. Certain House and Senate members, both Republican and Democratic, think so too. As for Ms. Pelosi, well.....