On Friday, President Obama announced the rejection of Canadian company TransCanada's application to build the Keystone XL pipeline. He offered a brief explanation here.
I'm puzzled by his explanation. The first reason he gave is that the pipeline would not have created as many jobs as an infrastructure plan:
The pipeline would not make a meaningful long-term contribution to our economy. So if Congress is serious about wanting to create jobs, this was not the way to do it. If they want to do it, what we should be doing is passing a bipartisan infrastructure plan that, in the short term, could create more than 30 times as many jobs per year as the pipeline would, and in the long run would benefit our economy and our workers for decades to come.
Our businesses created 268,000 new jobs last month. They’ve created 13.5 million new jobs over the past 68 straight months -- the longest streak on record. The unemployment rate fell to 5 percent. This Congress should pass a serious infrastructure plan, and keep those jobs coming. That would make a difference. The pipeline would not have made a serious impact on those numbers and on the American people’s prospects for the future.
The logic here is hard to follow. Why reject some jobs on the basis that other jobs might be created under a separate measure?
Underlying the rejection, obviously, are environmental concerns. But the connection between this decision and the environment is a bit tenuous. If the measure at issue were a ban on the sale, production, or import of oil derived from oilsands, there might be an environmental argument. But when the same oil gets transported through the U.S. via train, and when the U.S. will be producing its own oilsands oil, the environmental motive for rejecting this pipeline looks a little weak.
Here's what the Washington Post had to say about the decision to reject: "The politicization of this regulatory decision, and the consequent warping of the issue to the point that it was described in existential terms, was a national embarrassment, reflecting poorly on the United States’ capability to treat parties equitably under law and regulation."
So what's next for TransCanada? Is there some domestic legal challenge they can bring? Will they file a NAFTA Chapter 11 claim? (Interesting how the Washington Post used the term "equitably"!) Will they cross their fingers for a Republican win in the Presidential election, and then reapply? I don't know, but if they really spent $2.5 billion so far on this project, it seems likely they will fight to get some of it back.
