Keystone XL's Goose is Cooked

Maritime acreage about 9 miles off the coast of Rhode Island went on the auction block Wednesday for wind energy development. The Bureau of Ocean Management said it's the first-ever competitive lease sale for renewable energy on the U.S. Outer Continental Shelf. Combined, the BOEM had generated more than half a million dollars in bids for the acreage. The lease is part of the green hue apparent in U.S. President Obama's second-term economic agenda. With recovery under way, the Obama administration may be on the cusp of starting a U.S. renewable energy revolution, a revolution that may also mark the end to the Keystone XL pipeline debate.

The BOEM put more than 230,000 acres off the Rhode Island coast on the auction block for wind energy developers. Combined, the two lease areas could support the development of more than 3,000 megawatts of wind energy.

Related article: TransCanada Might Rethink Potential Keystone Launch Date

President Obama has been rolling out a new economic agenda meant to put momentum behind the economic recovery under way in the United States. The Commerce Department said Wednesday the economy grew at a rate of 2.3 percent from the height of the recession in 2009 through last year. Payroll information from July, meanwhile, shows U.S. companies added 200,000 workers to their payrolls.

Obama told workers at an Amazon warehouse in Tennessee this week U.S. businesses created more than 7 million jobs during the last 40 months.  Wind, solar and natural gas, he added, could help create even more jobs for American workers.

"Now is the time to double down on renewable energy," he said.

Job creation has been the source of debate over Obama's energy policies. He contested the employment benefits of the proposed Keystone XL oil pipeline in a weekend interview with The New York Times. The president said job creation from the pipeline would be "a blip" when compared to the relative need in the U.S. economy.  Keystone XL planner TransCanada said the Gulf Coast Pipeline, the U.S.-leg of the project, put 4,000 people to work during the initial construction phase.

The president told the crowd in Tennessee "on oil pipeline coming down from Canada that's estimated to create about 50 permanent jobs [is] not a jobs plan." New investments meant to break the U.S. addiction to foreign oil helped right the economic ship. The good jobs in America, he said, are in wind, solar and natural gas.

Related article: Will Quebec Tragedy Derail Heavy Oil Upswing?

U.S. Interior Secretary Sally Jewell said Wednesday's offshore wind energy lease sale was history in the making. There was an enormous potential for job growth in the wind energy sector, she said, even as U.S. oil production gains continue to provide a source of stimulus for shale-rich states like North Dakota. The lease areas on the auction block Wednesday could provide enough electricity to meet the energy demands of more than 1 million homes, her department said.

Last week, the BOEM said it was reviewing a request from the Virginia government to build a grid-connected 12 megawatt wind energy test facility off the state coast. A second competitive lease sale off the East Coast is set for Sept. 4.

By. Daniel J. Graeber of Oilprice.com