A new report by the American Action Forum, a center-right policy institute, details adverse economic consequences of the Keystone XL pipeline's delay. The report highlights billions of dollars in untapped economic activity, and the over $1 trillion the U.S. has paid other countries for oil. It also details additional environmental benefits that could be provided by passing Keystone.
TransCanada, the company that would operate the pipeline, has been waiting for authorization on the project since September 2008. By breaking down crude oil prices over the past years, AAF estimates "$175 billion in economic activity has been unrealized due to the delay." Furthermore, "at today’s price of crude at $51.76, this would gross over $42 million dollars a day or roughly $15 billion per year."
AAF's report also touts Keystone's ability to decrease America's dependence on oil from countries in the Middle East, as well as Russia and Venezuela, by increasing imports from more friendly countries like Canada. That would be particularly advantageous, as United States relations with those places have been strained. The report cites statistics from the Energy Information Agency, noting that "the U.S. imported approximately 9 million barrels per day of petroleum in 2014 from 80 countries with the bulk of its oil imports from Canada, Mexico, Saudi Arabia, Venezuela and Russia," and that, "since 2009, the U.S. has paid over $1 trillion to these top five countries."
The report notes that despite President Obama's February veto of legislation authorizing the construction of Keystone, he could still approve it through executive order. Because of President Obama's statement that he would do so "only if it 'does not significantly exacerbate the climate problem,'” the State Department is now reviewing the proposal, and there is no deadline for completion. The House Oversight Committee subpoenaed those documents earlier this month.
AAF adds that not only does Keystone "not significantly exacerbate the climate problem," but it actually has environmental benefits. A January 2014 State Department report concluded that the pipeline "would not increase greenhouse gas emissions by a significant amount." AAF also notes their previous research shows that carbon emissions from the "pipeline would be significantly less than that coming from rail transport," and "the risk of oil spills is greatly reduced as pipelines have a lower spill rate than rail."
Earlier this week, TransCanada's southern segment of the Keystone pipeline pumped its billionth barrel of oil. “To put this achievement in perspective, it would take approximately 1.7 million train cars or 3.3 million trucks to transport one billion barrels of crude oil," noted TransCanada's president, Russ Girling. Girling also cited Keystone's economic and foreign policy benefits in his statement.
Despite the benefits, Keystone's future looks bleak for the time being. This is in part due to concerns by far-left environmental groups and, accordingly, lack of incentive for President Obama to issue an executive order conflicting with his political base.
You can read American Action Forum's full report here.