Obama's Keystone XL Pipeline Rejection Is a Gift to China

Barack Obama breaks his promise that he will so everything he can to create jobs by saying "No" to Keystone XL.

By + More

At a time when the U.S. economy desperately needs the estimated 20,000 jobs it would create, President Barack Obama said "no" Wednesday to the proposed Keystone XL pipeline and, in an act of stunning audacity, blamed the Republicans for forcing the decision on him.

The Obama administration has dithered for months over whether or not to grant approval for the construction of the pipeline, which would bring oil from the Canadian tar sands to refineries on the U.S. Gulf Coast. Obama's union friends want the pipeline because of the jobs it would bring, while his pals in the environmental movement oppose it because they continue to push for reductions in the use of carbon-based energy, not just in the United States but around the world. Ultimately, Obama sided with the greens, saying the 60-day deadline Congress had imposed on him for making a decision did not provide adequate time to review potential alternate routes.

[Read Michael Lynch: Keystone XL's Rewards Outweigh Its Potential Risks]

The $7 billion, 1,700 mile pipeline would have been a boon to the U.S. economy, specifically to the domestic energy industry which continues to grapple with the restrictions placed upon it by the Obama administration in the period following the BP Gulf of Mexico oil spill that took the then-new president off message for several months early in his term. The decision to reject the pipeline will also have a profound effect on efforts to make America more energy independent.

At the same time the decision is a gift to China, which also wants the tar sands oil. Rather than running the pipeline south into the United States, the Chinese would like to see it run west to Canada's Pacific Coast—and has apparently offered to pay for its construction—in order to ship the oil overseas.

In rejecting the pipeline Obama turned his back on his own Council on Jobs and Competitiveness which earlier this week issued a report calling for the construction of new energy pipelines in order to enhance U.S. energy and economic security.

[See a collection of political cartoons on energy policy.

Republicans responded forcefully to the news, vowing to fight on to see the project through to completion. Former House Speaker Newt Gingrich, campaigning in South Carolina, said Obama's decision "weakens America's national security and kills thousands of well paying American jobs," while promising that, if elected, he would "grant the permit to build the Keystone XL pipeline on my first day in the Oval Office."

"At a time when American families and businesses are facing record high gas prices and a weak economy," Gingrich said, "the president has made clear that is not going to do anything to help them."

House Speaker John Boehner accused Obama of "destroying tens of thousands of American jobs and shipping American energy security to the Chinese" while "selling out American jobs for politics." Obama, he continued, "said he'll do anything that he can to create jobs. Today that promise was broken. The president expedited the approval of the Solyndra loan project, but won't approve a project that's been under review for over three years."

[Read the U.S. News debate: Should the Government Invest in Green Energy?]

Indeed the president is extremely vulnerable on this point. The idea that his administration has had three years to make a determination about letting the pipeline go forward and then saying "No" because of a 60-day deadline does not reach the threshold of credibility. Putting politics before the pipeline may help solidify his liberal base heading into the next election but it puts him at odds with working class Americans who need—but can't find—jobs in Obama's economy.

  • Check out the U.S. News Energy Intelligence blog.
  • Read Mort Zuckerman on America's energy future.
  • Read the U.S. News debate: Is It Time to Drill in the Arctic Refuge?