Democrats have launched their latest attack on export-led job creation, this time piggybacking on anti-oil sentiment to oppose the Keystone XL pipeline. The pipeline would bring crude from the vast oil sands deposits in Canada to American refineries along the Gulf, creating thousands of private sector jobs.
It would help protect United States national security interests. It comes at no taxpayer expense. And it will strengthen our vital ties with our ally Canada.
They charged collusion between the State Department and oil industry. Those accusations were rebuffed by an independent audit last week.
The week before that, a high-level agreement between Canada and China to increase energy cooperation squelched the enviro-dream that blocking Keystone XL would curtail oil sands production. Just the opposite is more likely — if the U.S. pipeline is stopped, the oil sands will still flow, but the environmental risks would be greater as the oil is shipped across the Pacific to China.
The latest canard is that Keystone XL would use American soil to convey Canadian oil to markets abroad. The facts are otherwise. The United States is a huge net importer of crude oil: about 9 million barrels every day. This reality has driven wars and perverted national security policies for decades.
The core national security benefit of Keystone XL is that Canadian oil will flow to U.S. territory, giving us greater flexibility in our national security affairs, particularly in volatile oil-rich regions. Crude from Keystone XL will be processed in American refineries and the vast majority of the products will be consumed on American soil.
Crude oil from Keystone XL will replace heavy oil we currently use, or would need in the future, from Venezuela and the Middle East. If the Democrats have their way, American drivers would remain dependent on the erratic and anti-American president of Venezuela, Hugo Chavez.
Overall U.S. exports of refined products are running at an unusually high 15 per cent of total production because America’s struggling economy has sapped domestic demand. Simply put, we’re keeping our refineries humming — and Americans working — by selling at home and overseas.
Even the prospect of a small amount of exports has led Democrats to advocate a blockade of any exports of products from Keystone XL oil. Why would Democrats now want to stop exports of products manufactured by Americans as well?
This latest assault on trade reveals just how out of touch the Democratic Party is with pro-growth, pro-job needs of our economy. It is especially strange considering that a key ingredient of President Obama’s recipe to save the economy was to double exports over five years. It appears Democrats are so anti-oil they want to kill export jobs held by American refinery workers.
Trade provides new markets for our companies and farms and more jobs for our workers and farmers. It provides more choice for our consumers, helps keep prices down, and drives innovation and productivity. It is an engine of economic growth. An assault on trade, via the Smoot-Hawley tariff, helped lead to the Great Depression. No country ever prospered by cutting itself off from world markets.
The United States has perhaps the most dynamic refinery sector in the world, directly employing 108,000 people — including 2,245 in Indiana — and manufacturing the feed stocks for American workers who further produce diverse items from fertilizer to fishing rods. Those jobs would be more secure if more inputs to the refineries came from Canada instead of unstable foreign suppliers.
Exporting a small percentage of refined products to maintain refinery capacity is not a problem to be solved. In the event of a global energy crisis, exports from U.S. Gulf refineries could quickly be diverted back to American gas pumps, providing that their source is a secure supply from Canada, not overseas.
We should all rejoice when America becomes a net petroleum exporter. That will be the day we are no longer trapped into fighting wars over energy. In the meantime, America’s thirst for oil makes export a non-issue for Keystone XL consideration. But the Democratic push to end even the ability to export should alarm all of America’s workers and drivers.
Lugar serves on the Senate Agriculture, Nutrition, and Forestry and Foreign Relations committees.