What an ideal time for the president to approve construction of the Keystone XL pipeline, the proposed 1,711-mile, 36-inch steel tube that would carry crude from the oil-rich Lake Athabasca region of Canada to the Gulf Coast for refining.
Keystone would provide additional North American energy for U.S. markets, an estimated 20,000 jobs, and boost U.S.-Canadian relations. And imagine Obama's photo-op with Sen. Jon Tester, D-Mont., up for re-election in November. Call it a win-win-win-win.
Instead, Obama's refusal to approve Keystone is a gift to Republicans that will keep on giving throughout this campaign year.
On Wednesday, Obama said, "I'm disappointed that Republicans in Congress forced this decision, but it does not change my administration's commitment to American-made energy that creates jobs and reduces our dependence on oil."
Except the commitment now seems a little wobbly.
Pipeline approval has been pending since September 2008, when TransCanada Pipelines Ltd. applied for permission to build it. Because 1,384 miles were to be built in the United States, the State Department reviewed the application.
Although the State Department gave Keystone a positive environmental assessment last August, in November it announced that approval would be delayed until the first quarter of 2013, pending the study of alternative routes.
Nebraska objected that the pipeline would cross its Ogallala Aquifer. But Nebraska cannot prevent authorization of the pipeline, and Nebraska is now working with TransCanada on a different route.
As a condition for extending payroll tax cuts, Congress required the State Department to speed up its decision on Keystone, and deliver a verdict by mid-February.
Some believe that Obama has outmaneuvered the Republicans by issuing a negative decision on Keystone. But the real losers, after the unemployed who lose potential jobs, are Democrats whose campaigns will be hurt by the rejection of Keystone.
The pipeline is estimated to provide $99 million in revenues to local governments, $486 million to state governments and about $5.3 billion in future cumulative property taxes, according a TransCanada study. The federal government's share in tax revenue, assuming a rate of 15 percent, would be about $1.44 billion.
Some union leaders are criticizing the White House for the decision. Terry O'Sullivan, president of the Laborers' International Union of North America, said, "Once again the president has sided with environmentalists instead of blue-collar construction workers -- even though environmental concerns were more than adequately addressed. Blue-collar construction workers across the U.S. will not forget this."
Other unions, such as the Communications Workers of America, the United Auto Workers, the Transport Workers Union, the United Steelworkers Union, and the Service Employees International Union, whose workers would not benefit as much from Keystone's jobs, are following the party line and joining environmentalists to support the president.
Obama's refusal to allow Keystone to proceed is comparable to the National Labor Relations Board's attempt to block Boeing from using its new plant in North Charleston, S.C., where it is employing thousands of workers to make new Dreamliner planes. In both cases, the federal government is standing against domestic employment in individual states.
More is at stake than jobs generated by Keystone. The Gulf of Mexico refineries, America's single largest concentration of petrochemical facilities, will need future supplies of oil to continue operating at current levels.
Much of the heavy oil processed in the Gulf now comes from Mexico and Venezuela, whose export volumes have been dwindling.
In 2013, either a Republican or Democratic president will approve Keystone. But why wait until 2013?
Examiner Columnist Diana Furchtgott-Roth (dfr@manhattan-institute.org), former chief economist at the U.S. Department of Labor, is a senior fellow at the Manhattan Institute for Policy Research.
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