WASHINGTON – What should America do about the proposed TransCanada Keystone XL pipeline? This pipeline, planned long ago and debated for years, would carry almost 1 million barrel of oil a day from the Province of Alberta in Canada to US refineries in Texas.
Build it now
This is what we should do: build it yesterday! Approve it. Start construction immediately. Indeed, if we had a solid business case for doing this a few years ago, now –with Iraq going up in flames– it is clear that getting more oil from Canada, as opposed to any OPEC source, is in America’s national security interest.
Yes, to the extent that, notwithstanding increased domestic production, America needs to import oil –and we do need it– we want most of this oil to come from our friends and neighbors, and not from an unpredictable Middle East that is once again in the middle of a major crisis.
Insure against oil supply disruptions
Indeed, even as we realistically recognize that America’s options in confronting the sudden semi-collapse of Iraq are (sadly) limited, there is at least one thing we could and should do: increase as fast as possible our own energy security by buying more oil from Canada, our friend and ally.
This is good for our energy security and therefore for our national security. On top of that it is good for our economy. Canada is our major trading partner. The dollars that we send to them to pay for their oil will be spent to buy US goods.
The Iraq crisis should be a wake-up call, a reminder that America is still vulnerable to oil supply disruptions. This being the case, get more oil from a safe and close by supplier.
Iraq is a major oil producer. Until the recent explosion of the ISIL-triggered crisis, most experts indicated that Iraq, given its immense reserves, was well positioned to vastly increase its oil production and therefore its exports. From 3 million barrels a day, the country could go to 6 or 7, or even more.
Well, now, given the mayhem caused by a full Sunni insurrection sparked by ISIL, we have no idea what will happen to Iraq’s oil production, to the flow of Middle Eastern oil, and to future oil prices.
We need to import oil
As we know, thanks to technological advances, in the last few years America vastly increased its own oil production, (think North Dakota, now producing 1 million barrels of oil per day from almost zero just a few years ago). And this is great news. More oil produced in the US means less money sent abroad to buy for needed supplies. It also means a more self-reliant and thus more secure America.
Indeed, by increasing our domestic production, we have diminished our dependence on oil imports from OPEC countries. That said, we still need to import about 40% of the 18.89 million barrels a day we consume. While much less than just a few years ago, that’s still a lot of oil. And some of it comes from OPEC countries.
Canada: a better choice
But, guess what, now we do have a better choice: Canada. Canada, a traditional oil supplier to America, has vastly increased its crude production. And therefore, as we need to import oil, it would make sense to buy more from stable Canada, and thus less from a perennially unstable Middle East.
This is what would we should do, if we were a sane country. But, no, US politics does not allow taking this simple, common sense decision.
Sadly, our energy policy is shaped by the political views of millions of voters who believe that fossil fuels are evil. Even though these ideological biases go against our most basic national security interests, they will determine policy choices.
Indeed, our leaders instead of choosing what is good for the country, think that it is much better to endorse these fantasies in order to keep their political base happy.
The greens do not like fossil fuels
This is what US environmentalists, who happen to be rank and file Democrats, say about Canadian oil. “You see, Canada produces “heavy oil”. And heavy oil produces more emissions. And if we Americans buy and refine this oil, all this will translate into increased greenhouse gases emissions. And higher emissions lead to more CO2 in the atmosphere. And this means more global warming, and the melting of the ice caps. This in turn will cause rising sea levels and therefore the flooding of coastal areas in India and elsewhere, something that will cause a massive loss of lives. In other words, if we allow the Keystone pipeline, we shall have to answer for hundreds of thousands, possibly millions of dead Indians”.
What? Buying more oil from Canada will cause all that? Yes, it will. Or at least this is what our lovely environmentalists will tell you. Even though this catastrophic scenario is at least a bit far-fetched, if not totally ridiculous, this is what a large part of the “base” of the Democratic party believes.
Politics dictate policy
And, guess what, we are approaching difficult mid-term elections in which the Democrats are not poised to do well. Therefore, the last thing the Obama administration wants to do is to alienate a big chunk of the rank and file by approving the construction of an oil pipeline that –as we all should know– is bound to cause environmental catastrophe in India and elsewhere.
Therefore, no Keystone XL pipeline approval. Not a chance. At least not until after the November mid-term elections. In the meantime, Iraq may go up in flames, and this may indeed cause real problems for global oil flows, with negative consequences on our still fragile economy. (This scenario, while hypothetical, is a lot more likely than floods in India).
So, no pipeline. the Obama administration, while having ample opportunity to do so, will not buy insurance by getting oil from a safe supplier like Canada because –you see- this would be bad politics. Yes, this is how President Obama is minding the store.