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Rejection of Keystone a Blow to Economic Growth

January 18, 2012 3 minute Read by James K. Glassman

The administration’s rejection today of a permit to build the Keystone XL pipeline to carry oil from Canada to the United States was hardly a shock, but it’s still a huge disappointment. At a time when the U.S. economy needs growth desperately, saying no to Keystone is a terrible blow. Republicans forced today’s decision as part of a deal to extend payroll tax reductions at year-end, setting Feb. 21 as the deadline to make the choice. In an indication of his priorities, President Obama beat that target by more than a month. The company that wants to build the pipeline, TransCanada Corp., first applied for a permit in 2008. In November, the State Department, which has jurisdiction, delayed the request until after the 2012 elections. The pipeline would bring an additional 840,000 barrels of oil a day into the United States, and a report commissioned by the consulting firm Wood Mackenzie estimates that the pipeline will generate 85,000 new U.S. jobs by 2020. The rejection of Keystone XL is of a piece with other decisions by the administration. At a time when economic growth is America’s greatest challenge, energy policy is being driven mainly by a particular vision of environmentalism. The irony is that the U.S. stands on the brink of gaining something close to energy security because of technological developments in the finding, producing, and transport of oil and natural gas. Allowed to pursue energy vigorously – with, of course, sensible environmental safeguards – the U.S. could advance on several fronts at once: improving economic growth, lowering the cost of energy, increasing jobs, and shoring up national security. The Keystone XL pipeline would certainly help – as would a policy to encourage the exploration and development of the Outer Continental Shelf, parts of Alaska, and, of course, the vast supplies of shale gas (perhaps more than a century’s worth) that can be accessed through new horizontal drilling and fracking techniques. In case anyone has doubts about the economic effects of extracting energy resources, take a look at North Dakota, where the unemployment rate is 3.4 percent and real estate sales are booming. The reason is increased oil production on private and state land that is largely immune to the delays enforced by the feds. Private businesses are ready and eager to make the energy investments that will contribute to U.S. economic growth – with no taxpayer money involved. It is government that is putting the brakes on the recovery with misguided policies, like the rejection of Keystone XL. We are on the brink of a growth revolution in energy. Let it happen.


Author

James K. Glassman
James K. Glassman

James K. Glassman is the Founding Executive Director of the George W. Bush Institute and the interim Director of the Military Service Initiative.

He served as undersecretary of state for public diplomacy and public affairs from June 2008 to January 2009, leading the government-wide international strategic communications effort. Among his accomplishments at the State Department was bringing new Internet technology to bear on outreach efforts, an approach he christened “Public Diplomacy 2.0.”

From June 2007 to June 2008, Glassman was chairman of the Broadcasting Board of Governors (BBG). He directed all non-military, taxpayer-funded U.S. international broadcasting, including Voice of America, Radio Free Europe, and Alhurra TV.  Glassman was a senior fellow at the American Enterprise Institute in Washington, D.C., from 1996 to 2008, specializing in economics and technology.

He has been moderator of three weekly television programs: Ideas in Action and TechnoPolitics on PBS and Capital Gang Sunday on CNN.

Glassman has had a long career as a journalist and publisher. He served as president of Atlantic Monthly, publisher of the New Republic, executive vice president of U.S. News & World Report, and editor and co-owner of Roll Call, the Congressional newspaper. Between 1993 and 2004, he was a columnist for the Washington Post and the International Herald Tribune and continues to write regularly for Kiplinger’s Personal Finance and Forbes. Shortly after graduating from college, he started Figaro, a weekly newspaper in New Orleans. His articles on finance, economics, and foreign policy have appeared in The New York Times, The Wall Street Journal, the Los Angeles Times, and various other publications.

Glassman has written three books on investing, and in April 2012 was appointed to the Investor Advisory Committee of the U.S. Securities and Exchange Commission. He was formerly a member of the Policy Advisory Board of Intel Corporation and a senior advisor to AT&T Corporation and SAP America, Inc.

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