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John Daly

John Daly

Dr. John C.K. Daly is the chief analyst for Oilprice.com, Dr. Daly received his Ph.D. in 1986 from the School of Slavonic and East European…

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Like Lazarus, Republicans Attempt to Revive Moribund Keystone XL Pipeline

There’s cynicism, and then there’s Congress.

In the latest example of dysfunctional Congressional gridlock, the Democratic-led Senate is certain to reject a House of Representatives-passed Republican bill, House Resolution 3630, the 369-page ‘‘Middle Class Tax Relief and Job Creation Act of 2011,’’ to extend the payroll tax cut.

The sticking (sticky) point?

Oil - specifically, dirty Canadian oil derived from Alberta’s oil sands, and the Keystone XL pipeline cutting across Middle America to deliver it to Gulf Coast refineries. On 10 November, four days after 12,000 pipeline protestors encircled the White House, President Obama announced "the decision on the (Keystone XL) pipeline permit would be delayed until at least 2013, pending further environmental review.”

As a fillip to the hard pressed American working class, the Republican House of Representatives proposed legislation would extend the payroll tax cut for 160 million workers for another year as well as extending long-term unemployment benefits. Approved 234 to 193, the legislation would extend a one-year break in the payroll tax due to expire at the end of the month, continuing the current payroll tax rate of 4.2 percent instead of allowing it to lapse and revert to its previous 6.2 percent level, a $1,000 difference for a family making $50,000.

Even better, the legislation would also renew expiring extra benefits for long-term jobless people and temporarily sidetrack a proposed cut in doctors' Medicare reimbursements, which could prompt some physicians to stop seeing elderly patients utilizing the program.

Sound great, right? Why aren’t Democrats reaching hands across the bipartisan divide to embrace the initiative?

Because, in a gesture of cynicism unusual even for Washington, the House Republicans have added to the legislation a provision to force work to begin again on the proposed 1,700-mile-long TransCanada Corp.'s $7 billion Keystone XL pipeline, which would transit up to 830,000 barrels of oil sands hydrocarbons per day from Hardisty, Alberta to U.S. refineries on the Gulf Coast.

House Resolution 3630, Section 1002 states, “… not later than 60 days after the date of enactment of this Act, the President, acting through the Secretary of State, shall grant a permit under Executive Order 13 13337 (3 U.S.C. 301 note; relating to issuance of permits with respect to certain energy-related facilities and land transportation crossings on the international boundaries of the United States) for the Keystone XL pipeline project application filed on September 19, 2008 (including amendments).”

Cynically adopting the guise of job creators, Republican House members maintain that work on the Keystone XL pipeline would create 20,000 or more jobs, with critics maintaining that the real level of employment for the period needed to construct the pipeline is closer to 3,500.

The Republican House of Representatives bill would give President Obama 60 days to act or the needed work permit would be automatically granted.

Given its onerous attachments, it is unlikely that the Republican House of Representatives bill will pass in the Democrat-dominated Senate, and even on the unlikely chance that it passes, President Obama has already promised to veto the legislation. Democrats have proposed their own version of the bill to extend the payroll tax cut, but the Republicans oppose its plan to pay for it with higher taxes on people making more than $1 million a year, the “one percent” that has come under increasing criticism this year as the U.S. recession continues.

The “dirty” secret about the Keystone XL pipeline’s oil sands hydrocarbons, which no amount of K Street PR can spin away, is that the oil has a higher carbon content than that from traditional fossil fuels, anywhere from 8 to 14 percent more, depending on which scientific report you read. Accordingly, the EU has already banned their import, much to Ottawa’s annoyance. Much to the consternation of Transcanada and the pipeline’s Republican boosters in Washington, environmental groups in such stalwart Republican states as Nebraska went up in arms over the Keystone XL proposal, fearing that a leak from the underground pipeline would irrevocably pollute the Ogallala Aquifer, source of much of the Great Plains' agricultural water.

Which must cause all thoughtful Americans to ask – why are Congressional Republicans lumbering the ‘‘Middle Class Tax Relief and Job Creation Act of 2011’’ with the Keystone XL energy albatross?

Who do they truly believe are their constituency, the millions of working and middle class Americans seeking “tax relief,” or – big oil? The GOP obstructionists may get their ignored constituents’ response next November.

In the meantime, Washington’s Solons have more important issues to consider.

Congressional leaders had hoped to adjourn for the year on Friday, but gridlock could force lawmakers to remain in Washington into next week.

Hardship, thy name is Congressional service, a fact Leona Helmsley’s “little people” only dimly appreciate.

By. John C.K. Daly of Oilprice.com

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Leave a comment
  • Samuel Boes on December 17 2011 said:
    It is incredible that you have bought into the environist/Administration/Demo claims regarding the Alberta oil - but you also seem to be a believer in manmade global warming. Regardless of what the overall politics in Nebraska are (and I don't consider them to be a particularly conservative state, GOP or not), environist groups can and do tie up things for years: witness the Hyperion oil refinery issue in South Dakota. It only takes a few extremists and a few pockets full of money to put a project on hold or crash it. The claims about the dangers of the pipeline are for the most part bogus; those that are not are exaggerated beyond belief (for anyone knowing science and engineering). (Part II continues)
  • Samuel Boes on December 17 2011 said:
    Part II: For example, they scream about how dangerous this "super-heated oil" is (one claim made by the anti-pipeline organization claimed it had to be heated above the melting point of stainless steel!) and how it will pollute the tens of thousands of square miles of the Ogallala Aquifer, but in reality, even normally heated tar oils (as in "hot mix asphalt") cool and harden too quickly in case of a pipeline break to flow anywhere. But because people like you can't be bothered to do simple analysis of the facts, instead preferring to scream out the same slogans and politically-correct science, people (and especially politicians) panic.

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