The Keystone project is opposed by environmental groups who view the pipeline as an endorsement of Canada’s decision to extract and sell oil sand resources. China, undeterred by any “green” opposition and always seeking new sources of supply, has already invested over $15 billion in the Canadian operations. China’s government hopes the U.S. will turn down the pipeline project so that the resources can be put on tankers to supply the energy-hungry nation.
The U.S. State Department has shown less concern over the resources themselves, and instead taken a keen interest in the route of the proposed pipeline. After conducting a three year environmental impact assessment, the State Department found no significant threat from the proposed route and began indicating they would approve it. Seeing the inevitable, those opposed to the plan began the high profile protests with arrests, and got active in specific states along the proposed pipeline route.
In Nebraska, opponents have enjoyed success convincing citizens to oppose the pipeline as a danger to an enormous aquifer that underlies much of the state. Despite the number of existing pipelines moving oil and natural gas across the Ogallala Aquifer, the environmental scare tactics now have many Nebraskans thinking that every pipeline is a time bomb waiting to explode.
In response to the manufactured concern, Governor Dave Heineman recently called a special legislative session to decide whether the state should pass legislation prohibiting the Keystone Pipeline’s planned route. If the state passes such a bill, it will immediately be challenged by both the federal government and the pipeline company, TransCanada. Other challenges may arise from business interests and other states on the proposed route that are excited to capitalize on the estimated 7,500 construction jobs, $11 million in new state property taxes, and $450 million in new state revenue which the pipeline is expected to generate in the first few years.
The federal government did all required risk assessment with its three year analysis, and two laws specifically give jurisdiction on this matter to them. But many will side with the state, arguing that Nebraska should be allowed to turn down a pipeline if it has real concerns. The question on the minds of most Americans is, “What is the best for the country?”
U.S. energy demand is expected to grow by 21 percent over the next two decades. We will rely on oil and natural gas for the next several decades, there’s no question there. But the debate seems to be over what will be the source of that oil and natural gas. There are huge, untapped resources off our shores, but plans to extend access have been put on hold for five years. We could continue to purchase from overseas, but the Arab Spring and the resulting price fluctuations, as well as the fact that many of the foreign countries we purchase these resources from openly don’t like us, have given many pause to consider that a realistic option.
Then there is our neighbor Canada. The country continues to develop its vast oil resources, and is already our number one supplier of fossil fuels. To me, it seems unwise to waste millions of dollars and much time arguing over whether we want to accept these oil resources from a friendly neighbor, ones that offer considerable economic benefits during a recession.
White House Press Secretary Jay Carney said this past month, “You can expect that the decision that is reached will reflect [President Obama’s] views.” That phraseology is a bit worrisome; I hope the president’s views ultimately align with reality, namely that we need more energy, and that Keystone XL offers one of the best solutions available to jumpstart our economy again.
Dr. Jack Rafuse  is the former energy adviser in the Nixon administration, and heads the Rafuse Organization, an independent consultancy on energy, trade and security issues.