New Keystone dawdling

Aug. 25, 2014
New dawdling over the Keystone XL pipeline border crossing fails the US in so many ways that identifying the worst way should be difficult. But it's not.

New dawdling over the Keystone XL pipeline border crossing fails the US in so many ways that identifying the worst way should be difficult. But it's not.

The worst way the decision fails the country is not that it so thoroughly undermines recent enhancement of energy security. The Keystone XL pipeline should represent the backbone of a logistically optimized North America able to export more oil than it produces. Delaying a permit decision under study nearly 6 years hampers yet again progress toward that goal. Degradation of security interests is bad, to be sure. It's just not the worst part of the Obama administration's mishandling of Keystone XL.

Industrial advantage

Bad, too, is the low regard the latest delay displays for a US industrial advantage. The country possesses world-leading high-conversion refining capacity in its Midwest and Gulf Coast states, capacity able to make most profitable and efficient use of low-quality bitumen from Canada. With its latest Keystone XL decision, the administration essentially scoffs, "Big deal." Yet not even this refusal to let the country capitalize fully on its manufacturing infrastructure represents the worst offense.

Thoroughly woeful is the delay's mistreatment of Canada, the closest ally the US has in every sense of the word. Bitumen and synthetic crude from the oil sands of Alberta are finding their ways to markets and will continue to do so. But the Keystone XL pipeline promises to be the most efficient connection of the oil sands to proximate markets for heavy, low-quality crude. The need to use less-efficient, more-costly alternatives—and, perhaps ultimately, divert to more-distant centers of upgrading capacity—lowers the value of bitumen at the point of production. The delay is therefore costly to the Albertan and Canadian economies and governments. But, no, this financial sandbagging of a friend, embarrassing as should be to all Americans, isn't the worst aspect of yet another delay in the Keystone decision.

Nor are the throw-away reasons the State Department gave in its announcement of the decision. A Nebraska court ruling about a routing decision? Please. The 2.5 million comments received by the State Department? Most of those represent cut-and-paste boilerplate from activist groups such as 350.org, the web site of which, after the decision, thanked "everyone who sent a message, shared, and organized to flood the State Department with comments."

And downright laughable are claims that the decision isn't political, such as the Jan. 21 howler by White House Press Sec. Jay Carney. Do Carney and his bosses think Americans don't understand how important environmental pressure groups and their money are to Obama and congressional Democrats seeking reelection in November? Maybe they hope no one noticed in February when hedge fund tycoon and climate-change crusader Tom Steyer of California pledged $100 million, half of it his own, to Democratic candidates sharing his environmental views.

None of that speaks well of US judgment. But the worst part of the latest dissembling on Keystone XL is what it exposes about policy-making. Activists representing nowhere near a majority of Americans have captured the regulatory apparatus. They stoke fear with exaggeration and phantom problems, such as Keystone XL's supposed threats to drinking water and the climate. They use organization to outmaneuver members of a more-diffuse majority not sharing their views. Then they block projects when they can, and when they can't—as with Keystone XL so far—they delay. And delay. And delay. The effect in either case is the same.

Activism vs. governance

Activism isn't all bad. Activism instigates change when change is needed. Where hydrocarbon energy is concerned, though, activism has congealed into a reflex policy response opposed to any new increment of oil and gas supply, heedless of economic consequences and other national interests. Governance shouldn't work this way.

Keystone XL is more than a pipeline fight. It's a battle over executive power. And obstructionists, for whom delay means triumph and cost means little, are winning.