Keystone has been completely scrubbed environmentally. Four government reports have been issued on its impact, all with essentially the same conclusion. The latest came this month, from the U.S. Department of State. It raised no major objections and concluded, as AP notes, “Other options to get the oil from Canada to U.S. Gulf Coast refineries are worse for climate change.” Nor will all the piped oil be Canadian: Keystone will provide a safe, reliable method of transporting 250,000 barrels of oil a day from the Bakken fields of North Dakota to refineries.
A key finding of State’s report is that the Canadian oil fields are so big — the world’s third-largest reservoir of oil — that they will almost certainly be developed. The question becomes whether the oil will be sent south to the U.S. by our friendly Canadian neighbor or shipped west to China and other Asian powers. Estimates show that for every dollar of oil that North America imports, we receive only 10 percent of the economic benefit — the economic activity the oil is used for. The rest of the money stays with the Venezuelans, Nigerians, and Saudis who pumped the oil. In contrast, when you add up oil-production costs, sales, and downstream jobs created by oil production, the domestic benefit from oil pumped from North American sources is roughly 80 to 90 cents of every dollar of oil revenue.
Every one of the governors along the Keystone pipeline’s route now backs the project. They predict that the $5.3 billion project would create 16,000 direct jobs and an estimated 163,000 jobs in indirect employment.
So why is the Obama administration resisting the pipeline? Before the election, Obama punted for fear of alienating pipeline opponents, including environmental donors and the Sierra Club. Since the election, bureaucrats in his Environmental Protection Agency have proposed withholding approval of Keystone unless Congress agrees to some kind of a carbon tax in exchange.