Last night the U.S. House of Representatives voted to approve a measure that would require the Obama administration to make a decision on the Keystone XL pipeline within 60 days. The pipeline was first proposed in 2008 but, despite the fact the President claims infrastructure projects create jobs and are an economic stimulus, after more than three years he has yet to decide whether or not a pipeline is in the “national interest.”
Though President Obama has sworn to veto any legislation mandating action on Keystone XL, the House-passed legislation does call attention to a central energy security issue. The pipeline in question would bring as much as to 830,000 barrels of oil per day from Canada—a reliable ally—to be refined, and likely used, here in the United States. Additionally, the Keystone pipeline’s expansion would create about 20,000 construction jobs alone and would lead to more job creation in the U.S. refining sector after the project is completed.
Nonetheless, there has been much vocal opposition to the Keystone XL pipeline from anti-oil activists who assume—incorrectly—that blocking the project will mean that Canada’s oil sands won’t be produced and consumed. On the contrary, countries like China, which has invested more than $15 billion in Canadian oil sands projects over the past 18 months alone, are eager to broker deals that ensure future access to these vast oil resources. Ultimately, Canada may have no other choice but to seek other markets for the 1.6 million barrels produced by oil sands per day.
The premier of Alberta, where the oil sands are principally located, said the following: “Our success is dependent on exports and the prosperity they bring, but U.S. demand is declining,” said Premier Alison Redford. “Asia’s star is rising and it will dominate the 21st Century. We can guarantee national prosperity for a long time to come by supplying them with the energy that they need.”
The implications of this missed opportunity will be most felt by US consumers, as the U.S. continues to spend $700 million per day on oil from overseas suppliers at today’s price of almost $100 per barrel. The ticker below displays a running total of how much money has been spent by the U.S. on non-Canadian foreign oil since the November 10 decision to delay the Keystone XL project:
This number will only continue to increase over the next two years, if the administration stands firm on its pledge of inaction.