The Energy and Commerce committee held opening statements yesterday on the markup of H.R. 3548, the North American Energy Access Act. Republican members touted the pipeline's numerous economic and energy security benefits while some Democrats attempted to distract the debate by suggesting the pipeline would be built to facilitate oil exports.
"This argument is nothing more than red herring," said Energy and Power Subcommittee Chairman Ed Whitfield (R-KY).
Whitfield pointed to a Department of Energy memorandum which refutes Democrats' argument that the oil transported by Keystone would be sent to China, concluding Gulf Coast refineries will likely consume additional Canadian oil sands well in excess of what would be provided by the Keystone XL pipeline. It also concludes that exports of Canadian oil sands from Port Arthur, Texas, are unlikely.
To suggest the Keystone XL pipeline would be built to ship oil to China defies both common sense and economic sense. If the goal were to get Canadian oil to Asian markets, it would be far easier to build a much shorter pipeline to the west and ship the oil to China--a project Canada is considering now that President Obama has further-delayed the pipeline's construction.
"We have been told that the new pipeline is not designed to increase supplies here, but rather to export supplies from the Gulf to other countries, including China. But that doesn't pass the common sense test," said Energy and Commerce Chairman Fred Upton (R-MI). "The real risk of losing out on this energy comes from not building the pipeline. If the U.S. refuses to allow this project to move forward, then not a single drop will come through Keystone XL to refiners in the Midwest and Gulf Coast. The Canadian government would have little choice, as they have made clear, but to pursue other markets for its growing oil production, including construction of a pipeline to the Pacific coast for export to China."
The U.S. needs oil to supply our refineries and fuel our economy, but our oil supply is currently threatened by instability and political turmoil in nations that may not share our interests, or may be outright hostile towards us. The primary benefit of linking Canadian supplies to U.S. refineries and markets is not to export petroleum products, but rather to increase our energy supplies from our friend and ally so that we can displace imports from unfriendly nations.
"The Keystone XL pipeline will greatly enhance America's energy security. With this proposed pipeline our crude imports from Canada could reach 4 million barrels a day by 2020, twice what we currently import from the Persian gulf. Enhancing our energy partnership from Canada will strengthen America's energy future. Each additional drop of oil from Canada offsets a drop of OPEC oil," said Rep. Lee Terry (R-NE), author of H.R. 3548.
The U.S. is both the largest importer of oil and the world's largest consumer of petroleum products. Common sense dictates that the goods from Keystone XL will get consumed here in the U.S., but flexibility is essential to a functional market. Factors such as economic ups and downs and energy efficiency gains have a major impact on our energy needs at any given time. But one thing that won't fluctuate is our need for jobs--including those that will be created to build this pipeline. To punish refiners and manufacturers with unnecessary restrictions would be counterproductive.