Pipeline foes beat back bogus gas price claims

Two Capitol Hill victories show environmentalists' strength -- but they may be temporary

Published March 9, 2012 3:30PM (EST)

The Keystone Oil Pipeline is pictured under construction in North Dakota.            (Reuters)
The Keystone Oil Pipeline is pictured under construction in North Dakota. (Reuters)

Ever since President Obama delayed the decision to grant TransCanada a permit to build the Keystone XL pipeline pending further environmental review back in January, Republicans have been cooking up various schemes to force the project’s approval. A few weeks ago, Republican leaders stuck Keystone mandates into both the House and Senate drafts of the transportation bill. In response, anti-pipeline activists kicked into high gear and mobilized supporters to send over 800,000 messages to their representatives within 24 hours, and the president threatened to veto any bill containing a Keystone rider.

The House’s transportation bill is on the rocks, but the Senate’s version is moving along, and the pro-Keystone amendment sponsored by John Hoeven, R-N.D., went up for a vote yesterday. The Hoeven amendment would have bypassed the need for presidential approval, using Congress’ constitutional power to regulate international commerce to skip the review process and green-light the pipeline immediately. The amendment failed in a close vote Thursday afternoon: a majority of senators, including 11 Democrats, voted in favor, but the 56 votes it garnered were just shy of the 60 needed to pass.

Another amendment to the transportation bill, sponsored by Ron Wyden, D-Ore., would have approved Keystone on the conditions that it be built with materials manufactured in the United States and that the oil transported by the pipeline be used within the U.S. rather than exported abroad — requirements that many observers speculated would have effectively served to kill the project. That bill failed 34-64, with Republican naysayers joined by a handful of New England Democrats who oppose the pipeline on grounds of its climate impact.

All in all, the day’s votes constituted a narrow victory for anti-Keystone forces, and it may be short-lived: Republicans are already saying they’ll put the pipeline back in the transportation bill when the differences between the Senate and House versions are hammered out in committee. Still, it’s another remarkable victory for a campaign that seemed futile to most experts at the outset, particularly considering the wealth and power of the industry it’s fighting. Indeed, the 56 senators who voted for the pipeline have received approximately 500 percent more in donations from the oil and gas industry than the 44 who voted against, according to data provided by the Dirty Energy Money website. The American Petroleum Institute was so sure of victory that they mistakenly sent out a victorious press release just moments after the amendment failed.

The inflated claims about job creation that littered media accounts in the early days of the Keystone campaign have been mercifully debunked, to the point where even TransCanada has backed down from its early claims that the pipeline would create hundreds of thousands of jobs. Yet Republicans have continued to beat the lifeless job-creation horse: Dick Lugar, R-Ind., for example, claimed that the project would create jobs “almost immediately.”

In the face of rising gas prices, Republicans are also now turning their focus to the energy aspects of the debate, arguing that Keystone will lower fuel prices: Lugar said that "Americans are screaming for more affordable oil supplies," while Hoeven claimed the pipeline will “help control fuel prices at the pump and reduce our reliance on Middle East oil.” Some Democrats are joining the chorus: Claire McCaskill, D-Mo., defended her support for the pipeline by saying “people care very much about the price of gas.”

Indeed, they do, but Keystone will have little to do with that price. While there’s some disagreement among energy experts over what precisely the impact of the pipeline on gas prices would be, nearly all agree that it would be insignificant. And by decreasing the surplus of Canadian oil in the Midwest, the pipeline could raise even gas prices throughout that region. As Philip Verleger, head of the energy consulting firm P.K. Verleger LLC, told Bloomberg News, “The Canadian plan was to use their market power to raise prices in the United States and get more money from consumers.

But even Verleger thinks Keystone would only raise the price of gas by a few cents per gallon. As Frances Beinecke of the Natural Resources Defense Council points out, the idea that importing more oil from Canada will lower fuel prices is patently false: Over the past decade, the amount of oil we buy from Canada has increased by 50 percent, but gas prices have nearly tripled. And implications that the pipeline would alleviate the pressure of current gas prices are simply disingenuous: Even if the Senate voted to approve the pipeline immediately, it wouldn’t go into operation until 2014.

Keystone XL would also have little to no impact on “dependence on foreign oil” or any of the other boogeymen frequently trotted out by those urging its construction: As the State Department wrote in January in the report accompanying its recommendation that the president delay the decision, “denying the permit at this time is unlikely to have a substantial impact on U.S. employment, economic activity, trade, energy security, or foreign policy over the longer term.”

In any case, TransCanada isn’t waiting around for Congress: they’re already making plans to start construction on the southern half of the pipeline, which would run from Cushing, Okla. — the terminus of many existing pipelines from Canada, and currently a congestion point in the oil transportation system — and through Texas to refineries along the Gulf Coast. Obama isn’t fighting them on this one: Rather, White House spokesman Jay Carney spoke favorably of TransCanada’s plan, and said the administration would “take every step possible to expedite the necessary federal permits.” The company is also in the midst of revising the pipeline’s route through Nebraska to avoid the Ogallala Aquifer, and has said that it will release its updated plans to the public shortly before applying again for approval. But the residents of the states impacted by Keystone’s southern stretch may not be much more amenable than Nebraskans: Many Texans have already voiced concerns about the potential impacts of the pipeline on their land, including Julia Trigg Crawford, who’s in a court battle with TransCanada over the use of eminent domain.

Anti-Keystone forces aren’t resting easy, either: Earlier this week, several dozen Lakota protesters temporarily blocked two trucks from passing through their reservation in Wanblee, S.D., on their way to a tar sands field in Canada, resulting in five arrests. Said Debra White Plume, a Lakota grass-roots leader who was arrested during the protest, "Our Lakota people oppose this pipeline because of the potential contamination of the surface water and of the Ogallala aquifer.”

Rest assured — or dismayed — that we haven’t seen the last of this debate. As long as Americans are worried about jobs and energy prices, Republicans will keep trying to hammer the president with Keystone, regardless of its negligible impact on either.

By Alyssa Battistoni

Alyssa Battistoni writes about the environment and politics from Seattle.

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