Though it was only the third veto of his presidency, President Barack Obama nixed a bipartisan bill approving of the construction of the Keystone XL Pipeline without fanfare. There was no ceremony, no cameras, and Obama was not surrounded by members of the constituency that he was supposedly protecting with this latest exercise of presidential authority. Surely, Obama hoped that this moment would pass quietly, and that few would thoroughly and critically examine the logic that supposedly justified his veto. He has not been so lucky.
Obama’s determination to veto Keystone was a political consideration. He did so in order to appease a rabidly progressive environmentalist base that has the gall to lament the dangers associated with the transport of crude by rail while in the same breath decrying the threat posed by transporting crude via pipeline. It’s almost as if this segment of the Democratic base, represented by increasingly troubling figures like billionaire former hedge fund manager and self-described “climate champion” Tom Steyer, is openly hostile to the exploitation and transportation of all fossil fuels.
But Democrats rarely raise environmental concerns when they expound on their opposition to Keystone. Instead, they will note that the risks posed by this pipeline outweigh the economic benefits. “It turns out the actual numbers are 3,900 temporary jobs in the construction sector and 35 permanent jobs,” CNN contributor and former White House advisor Van Jones said last year. He was echoing a claim made in a State Department report, and insisted that this miniscule number of permanent employment opportunities suggests that the pipeline is simply not worth the costs.
“The numbers, as reported by the State Department, back him up, though that’s the nature of any big construction project, be it a highway or monument,” the fact checking institution Politifact conceded while ruling Jones’ claim true. That logic would seem to poke holes in the president’s persistent agitation in favor of American public investment in infrastructure projects.
But this is an oversimplification of the nature of the pipeline’s economic impact. “No single dancer in New York City is going to get a job because of Keystone,” The Washington Post reported in January. Perhaps they were speaking directly to the members of the American commentary class at work denouncing the pipeline from studios situated in the vicinity of Radio City Music Hall. “[B]ut just as the part-time work of the construction workers adds up to jobs expressed in annual terms, the economic model assumes some of that spending reverberates through the economy and eventually lands in the pockets of people across the country, thus contributing to a portion of their annual wage.”
If that seems intuitive, you’ve been blessed with the ability to appreciate simple macroeconomics. This is a level of understanding that apparently escapes the president.
“It bypasses the United States and is estimated to create a little over 250, maybe 300 permanent jobs,” Obama insisted in an interview last week. “We should be focusing more broadly on American infrastructure for American jobs and American producers, and that’s something that we very much support.”
On Monday, The Washington Post’s Glenn Kessler took a sledgehammer to these remarks.
“The crude oil would travel to the Gulf Coast, where it would be refined into products such as motor gasoline and diesel fuel (known as a distillate fuel in the trade). Current trends suggest that only about half of that refined product would be exported, and it could easily be lower,” he wrote. “This is what is especially strange about Obama’s remarks, as he appears to be purposely ignoring the findings of the lead Cabinet agency on the issue.”
Kessler noted that various reviews have claimed that American oil producers as well as refineries would benefit from the pipeline’s construction, not to mention America’s energy consumers. The pipeline would facilitate the transit of nearly 10 percent of the crude produced in North Dakota and Montana to the Gulf for processing and transport. Furthermore, American firms control approximately 30 percent of Canadian companies that are extracting crude in Canada’s oil sands region.
When considering the domestically-produced petroleum products that this pipeline would introduce into the American economy, as well as the new employment opportunities created by the pipeline and the increased profits accrued by American firms as a result of its operation, it’s clear that Keystone would have a measurable positive impact on the American economy.
“The White House declined to provide an on-the-record defense of the president’s statement,” Kessler concluded. “That certainly suggests officials are unwilling to make a public case contradicting the State Department findings.” He dubbed Obama’s statement a willfully misleading “whopper” by giving it an ignominious four Pinocchios.
So much for “The Party of Science.”