Message to the New GOP Congress: Keystone is Not Enough

By: Patrick Hedger-Policy Director, American Encore

Republicans are set to take control of both chambers of Congress this week following the historic gains made in the 2014 Midterms. One of the first bills scheduled for consideration is approval of the Keystone XL Pipeline. Not to sound greedy now that the GOP does control Congress, but just addressing the Keystone XL Pipeline on its own is simply not good enough and ignores a much wider problem in the energy sector.

The Keystone XL Pipeline is a proposed several-hundred mile section of an existing crude oil export project of the TransCanada Corporation. The pipeline would cross America’s northern border with Canada in order to bring Canadian crude oil to American refineries in the Midwest and Gulf Coast regions.  The fact that the pipeline would cross the border means that it requires approval from President Obama, who has subsequently held up making a decision on the project for over five years.

Obama claims to be worried about the environmental risks associated with the Keystone project. However, several studies, including ones conducted by the Obama administration itself, have found that the environmental impact of Keystone XL and the oil it transports would be negligible and that the pipeline presents no significant ecological risk that would warrant a rejection of the project.  Thus, the president’s continued obstruction of Keystone is nothing more than a thinly veiled effort to help solidify his credentials with the far-left environmentalist movement, who are opposed to anything and everything related to fossil fuels no matter how benign. In short, the fight against the Keystone XL Pipeline is purely symbolic. This means that the fight for it is largely symbolic as well. Now the Congressional GOP appears poised to address Keystone as the isolated issue which the president would have it framed.

Scoring style points is not a strong start to what should be a bold year for the Congressional GOP.

The Obama administration’s stifling of Keystone is representative of a much broader issue facing the entire energy sector: the president and his allies in the bureaucracy are handpicking winners and losers in the industry. While the government continues to hand out billions of dollars in subsidies to firms operating unproven and expensive technologies such as wind and solar power, the Obama administration, through the various agencies like the EPA and the Bureau of Land Management, have gone to great lengths to frustrate the fossil fuels industry.

The United States is currently experiencing a domestic oil and gas boom, with technologies such as hydraulic fracturing and horizontal drilling allowing producers to access previously locked deposits of crude oil and natural gas. Yet, while oil and gas production has grown over the last half-decade by 61 percent and 33 percent, respectively, production on land controlled by the federal government has fallen by 6 percent for crude oil and 28 percent for natural gas. This is a major problem for the industry and the nation, considering that just less than half of America’s proven oil and gas reserves exist underneath federal lands. Wait times for permits to drill on federal land are up 41 percent since 2006, which translates into an additional 100+ days for a decision, which may ultimately be a rejection.

Similar issues can be found across the energy sector, from coal mines to energy exporters all facing increasing amounts of red tape from the Obama administration.  

This industry-wide obstruction has to be addressed. Focusing solely on the Keystone XL Pipeline and scoring a symbolic victory there may actually do more harm than good by eliminating a strong platform from which to launch a broad reform of the permitting process across the entire energy industry.

In the coming days, American Encore will release a publication called “Blueprint 2015.” This document will be a comprehensive review of sound conservative policy remedies for multiple areas of important federal economic policy, such as energy, healthcare, taxes, and budget policy. In this blueprint, American Encore lays out specific legislation to correct the broader problem of bureaucratic obstruction of the energy industry. Republican leadership would be wise to consider legislation of this type, instead of squandering precious political capital on a small front of a much larger struggle.