COMMENTARY | According to The Hill newspaper, President Obama threatened to veto the extension of the payroll tax cut if a provision is attached to it that requires a quick approval of the Keystone XL pipeline between Alberta, Canada, and Texas.
The pipeline is designed to bring oil extracted from Alberta’s tar sands to refineries in Texas. It is estimated that 20,000 jobs would be created from the project. Also the United States would acquire a source of oil from an ally that could replace oil purchased from volatile countries in the Middle East.
The Keystone XL pipeline is opposed by an odd coalition of American environmental groups and Middle Eastern oil states.
The former claim that the pipeline would threaten aquifers in Nebraska, where it would cross, and that in any case the oil is “dirty.” The real reason is that environmental groups are opposed to the use of fossil fuels to create energy and the pipeline would facilitate that. President Obama’s decision to delay final approval of the pipeline was designed to cater support from the environmental lobby, reports Bloomberg.
Middle Eastern oil exporters such as Saudi Arabia fear the loss of revenue and influence if the United States were to buy more oil from Canada. Canada’s Financial Post suggests that oil exporting states such as Saudi Arabia, Nigeria, and Venezuela would like to shut down Canada’s oil sands operation in order to protect their own oil revenues.
Outraged that Obama would defer the creation of pipeline jobs and, in effect, ally himself with oil exporting countries, congressional Republicans have vowed to force a quick approval of the pipeline by attaching it to the must-pass payroll tax cut extension bill. Obama is threatening to veto the bill, thus not only killing the tax cut extension but also delaying, perhaps indefinitely, a truly shovel-ready project that would create jobs and economic growth.
Why is President Obama doing this? He is afraid to offend the environmental lobby, even at the cost of American jobs and a secure source of oil. He will not hear counter-arguments. His mind is made up.
It may be a bluff, but it is entirely possible that he will follow through on the veto threat and try to blame the Republicans. By so doing Obama has willfully damaged the American economy for his own political gain.
Sources: Obama threatens veto if pipeline decision is added to payroll tax cut, Ben Geman, The Hill, Dec 7, 2011
Keystone Delay Helps Obama Rekindle Environmentalist Support, Jim Efstathiou Jr. and Kate Andersen Brower, Bloomberg, Nov 10, 2011
Foreign interests attack oil sands, Diane Francis, The Financial Post, Sept 23, 2011