House Republicans have attempted to block extension of payroll tax cuts unless they include a rider to expedite approval of the Keystone XL pipeline by eliminating normal economic and environmental reviews. Like the American Petroleum Institute, Republicans claim the pipeline will increase oil supply for America and create jobs. Based on the pipeline application submitted by pipeline owner TransCanada and information presented in House hearings, these claims appear to be false.
Republican proponents have made wild claims about the jobs created by the pipeline, ranging from the ambiguous "tens of thousands of jobs" to the improbable "hundred thousand jobs." The Washington Post fact-checker Glen Kessler refuted the Republicans' inflated job claims in a recent article. In fact, based on the company's application, the State Department estimates 5,000-6,000 temporary annual jobs during construction and independent estimates note that it could create as few as 50 permanent jobs once the project is complete.
Pipeline advocates argue that Keystone will bring more oil to America. "The American people want us to stop buying Venezuelan oil," said Congressman Lee Terry. "We want it here," said Congressman Fred Upton. In reality, five major oil pipelines already transport oil derived from Canadian tar sands into the United States. These pipelines terminate in Oklahoma, Illinois, and Michigan, providing much of the United States with an ample supply of tar-sands derived oil. In fact, industry analysts note that these pipelines have produced an "oversupply" of oil in some parts of the country, creating low gas prices for Americans and diminished oil company profits.
The Keystone XL pipeline would provide an export outlet for Canadian oil, reducing supply in the Midwest by allowing oil companies to sell in higher priced markets elsewhere in the world. In its application to build the Keystone XL pipeline, TransCanada itself said, "It will also provide a benefit to all WCSB [Western Canadian Sedimentary Basin] heavy crude producers by increasing the price they receive for their crude." At a House hearing on the Keystone pipeline, a representative of the American Petroleum Institute confirmed that the Keystone oil is destined for a "world market" after being processed under an unusual arrangement of long-term contracts by refineries which principally export oil from Port Arthur, Texas.
Perhaps it is because oil companies want to export this oil away from North America that Republicans have blocked efforts to require Keystone XL oil be used in the U.S. domestic market. When legislation to advance the Keystone XL pipeline came to the House floor, I introduced a simple amendment requiring that the oil be used in America. This amendment would have ensured that Americans enjoy affordable gasoline and enjoy national security benefits as a result of tar sands oil production. Obviously those benefits evaporate if oil companies simply export Canadian oil to more expensive markets in China or Europe. Republicans were so opposed to domestic use of Keystone oil that their leadership blocked a vote on the amendment.
Alberta Energy Minister Ron Liepert has said, "If there was something that kept me up at night, it would be the fear that before too long we're going to be landlocked in bitumen [oil]." Canadian oil companies want to build this pipeline for export, lest their oil be "landlocked" in Canada and America.
While Canadian oil companies might increase their profits from selling oil overseas, such exports could come at the expense of American consumers and American national security. Beyond the self-evident risks that Keystone would accelerate global warming, it appears that this pipeline actually would reduce American access to North American energy, at the expense of consumers and our national security.
Once again, Congress finds itself in the middle of a dispute with oil companies on one side and American citizens on the other. Given their record, it is not surprising that Republicans have sided with the oil companies, even holding a tax cut hostage to accelerate construction of an oil pipeline which the industry itself acknowledges will increase gas prices for American consumers.