It’s no secret that the Keystone issue is a political powder keg. Neither is it a secret that it’s a controversial topic pitting two traditional foes: environmentalists versus big oil. Very murky, however, is what benefit Keystone XL offers the United States.
With blinding speed, progress on the Keystone project began in 2005 when it was proposed by the TransCanada Corporation. From the beginning, the concept was controversial with many, including the Communications, Energy and Paperworkers Union of Canada.
In 2007, the union, claiming the $2.9 billion project served U.S. interests over those of Canada, requested that the Canadian government block all regulatory approvals, but the project moved forward when the Canadian Energy Board approved the Canadian portion of the project in September 2007.
In January 2008, Conoco-Phillips acquired 50 percent ownership in the Keystone project and the U.S. Department of State quickly responded in March 2008 by authorizing construction of operation facilities at the US-Canada border, stating:
The Permit follows the Department of State’s Record of Decision and National Interest Determination, which found that issuance of the Presidential Permit for the Keystone Pipeline would serve the national interest.
The Presidential Permit is a significant regulatory approval required to proceed with construction of the Keystone Pipeline, which will move a growing supply of Canadian crude oil to key U.S. markets.
Soon after, in June 2009, TransCanada purchased Conoco-Phillips, regaining its sole ownership of the Keystone project, but the project was well under way with Canadian crude oil arriving in Illinois and Oklahoma in 2010.
Phase IV, Keystone XL (eXport Limited), increases the flow of Canadian oil to the U.S. It was approved by the Canadian National Energy Board and by South Dakota’s Public Utilities Commission in 2010.
However, in an apparent inter-agency battle between the EPA and the State Department, the project was halted, leaving everyone scratching their collective heads, wondering just exactly who was at the helm of the U.S. government — not a terribly new scenario for those of us in the U.S.
The State Department eventually approved the project’s continuation, stating in a teleconference in August 2011:
No significant impacts to most resources along its proposed corridor if the company follows through on environmental protection measures.
The government, however, said the 1,700-mile pipeline would present significant adverse effects to certain cultural resources and that mitigation measures have been developed under a programmatic agreement.
President Obama stopped progress cold once again and in this political ping pong match, the oil industry and mainstream media have done what they do best: divide the nation squarely along political lines.
So how will all this play out in the 2014 mid-terms?
In a dicey game of cards, the Obama administration is playing an extraordinarily high stakes game with a majority of congressional seats at stake in 2016.
The most obvious impact will be in states with at least a perceived economic benefit from Keystone XL. The states that will directly benefit are Montana, South Dakota, and Nebraska. There are also states that will benefit from it indirectly: Kansas, Oklahoma, Texas, Louisiana, and perhaps even Alaska at some point.
All are traditional GOP states and all are heavily influenced by energy production.
A quick look at three states directly impacted by the project shows the GOP has a significant opportunity:
- Montana — The Republican candidate in the Senate race, U.S. Representative Steve Daines, is currently 18 points ahead of interim Senator John Walsh (D), leaving the seat vulnerable with 56 percent of the electorate viewing Keystone as positive for the economy.
- South Dakota — The Republican incumbent in the gubernatorial race, Dennis Daugaard, currently has a 20-point lead over his Democratic challenger in a traditional red state.
- Nebraska — In the Nebraska Senate race, Republican Ben Sasse has a 17-point lead over Democrat David Domina.
Rasmussen’s “Crystal Ball” shows the GOP wining 5 to 8 seats in the House and 4 to 8 in the Senate as candidates are pre-selected for us in partisan primaries.
In highly pivotal elections in Iowa, Kentucky, Michigan, New Hampshire, and the already mentioned Montana race, according to a poll conducted by Consumer Energy Alliance, the president’s decision to delay the project further will have a major impact on the outcome of these elections.
In a stubbornly poor economy, jobs are of vital importance, especially in an election year and it remains a contentious issue related to Keystone XL.
A Washington Post/ABC News poll shows the project creating a “significant number of jobs” and while information quantifying “significant” seems impossible to find, the U.S. State Department is estimating the numbers to be far from significant. In their analysis, the jobs created will border on insignificant: 5,000 to 6,000 temporary construction jobs for two years compared to the “118,000 jobs over 100 years” as stated in the report compiled by a firm contracted by interested parties of Keystone.
The State Department estimates that, at best, 500 permanent jobs may be created in the U.S. and that most of the long-term impact will be absorbed by existing energy industry jobs.
It’s easy to visualize this lower estimate considering the pipeline is primarily a static delivery system, excluding the few pump locations along the line.
There are a number of other factors to consider in the election process too, not the least of which are environmentalist groups and a growing desire to focus efforts toward alternative energy rather than expanding carbon-based fuels.
The Democrats have very strong support among the Native American vote — the very “certain cultural resources” somewhat obliquely mentioned in the State Department’s teleconference — in several states including four of those mentioned previously: Alaska, Arizona, Idaho, Minnesota, Montana, New Mexico, North Carolina, North Dakota, Oklahoma, South Dakota, Washington, and Wisconsin.
Voting with Democratic margins exceeded only by African-Americans and Keystone XL traversing traditional Native American lands in Montana, South Dakota, and Nebraska, their vote may be significant, especially after the Trans-Alaska Pipeline all but ignored their opposition. President Obama has learned well how powerful the Native American vote can be, vying for their vote in 2008 and 2012.
However; President Obama’s fumbles with the Affordable Care ACT have already created substantial blowback for the Democrats, with a strong possibility of the GOP winning a majority in both the House and the Senate. Now, Keystone may add additional GOP seats in the midterms.
The only remaining question is: what will Keystone and a GOP majority in Congress mean for the Oval Office in 2016?