How odd that President Obama and Secretary of State Hillary Clinton couldn’t make a final decision on the proposed Keystone XL pipeline by the Feb. 21 deadline set by congressional Republicans. TransCanada, which would use private investment to build the $7 billion project, filed its application for environmental approval in 2008. The State Department conducted exhaustive studies and approved the application in 2010 and again last year, apparently clearing the way for a pipeline to move oil from Canada’s rich tar sand region of Alberta to refineries on the U.S. Gulf Coast. So now Obama decides against issuing a permit for the project because of “the arbitrary nature of a deadline that prevented the State Department from gathering the information necessary to approve the project and protect the American people.” He previewed this disingenuous ruling last November when he cited environmental concerns in delaying final approval until after the 2012 election. That came shortly after environmentalists encircled the White House with a human chain to protest the pipeline. Obama clearly has his eye on the big prize: millions of campaign dollars and thousands of campaign volunteers from the environmental movement for the coming campaign. Obama is angering another key part of his electoral supporters, the labor unions that desperately want the estimated 20,000 jobs the pipeline would create. But Big Labor is not as monolithic as most people think. For every construction worker, pipefitter and welder who would benefit from Keystone XL, there are many more unionists who are siding with Big Green so they can stay in the good graces of the White House and get the goodies that will be dispensed in a second Obama term. Never mind the benefits to the country that would accrue from the ancillary jobs created by the project and from the oil that would come from our steadfast friends to the north.
While Obama dithers on Keystone, America’s chief energy competitors are making hay on the international energy market. Canadian officials have made it clear they will build a pipeline that will either go south to supply the United States or west to supply China. Officials in Beijing are probably cheering for Obama’s supposed concern for the environment. The Chinese are also rapidly consolidating their status as Brazil’s preferred partner in developing the South American company’s rich offshore oil resources. And China’s government-controlled energy industry is investing substantial sums in Canadian and U.S. exploration and drilling firms. It never hurts to own a substantial piece of your competitor’s key industry.
Then there is Cuba, which just this week saw the arrival off its northern coast of the Chinese-built Scarabeo 9 drilling rig. The Spanish energy giant Repsol will use the Scarabeo 9 to drill wells located about 70 miles off the Florida Keys in the Gulf of Mexico in waters claimed by Cuba. Repsol is working in a partnership with Norway’s Statoil and a unit of India’s Oil and Natural Gas Corp. The Scarabeo 9 will also be used by Malaysia’s Petronas, which has entered into a partnership with Russia’s Gazprom Neft to drill at least one Gulf well in the Cuban waters. Quite a contrast to the Obama policy of putting virtually all U.S. offshore waters off-limits for energy production.
