Shovel Ready No More

Broken Before It Was Ever Used

President Obama's rejection of TransCanada Corp.'s Keystone XL pipeline permit this week exposed a split in a core Democratic constituency and handed Republicans a new line of election-year attack.

Unions representing construction workers condemned the move while labor groups including the United Steel Workers, the United Auto Workers and the Service Employees International Union joined with environmental advocates in saying they support Obama's decision. It also prompted swift criticism from congressional Republicans and the party's presidential candidates.

Obama is heading into his re-election campaign with the country trying to rebound from the worst recession since the Great Depression and an unemployment rate that has been stuck above 8 percent for almost three years. The economy will be a prime focus of Obama's State of the Union address on Tuesday.

The jobs promised by the building of the Keystone pipeline were central to union support for the project originally and the focal point of Republican criticism of Obama. 

TransCanada said the 1,661-mile project would carry 700,000 barrels of crude a day from Alberta's oil sands to refineries on the Gulf Coast, crossing six states and requiring as many as 20,000 workers to build.

But the debate over the pipeline long ago shifted from energy and environmentalism to the realm of Washington politics. That's why no one should be surprised that President Obama said no for now on approving the project.

There's too much at stake for a rushed decision, the type pushed at the president by Republicans hungry for a divisive issue to exploit in an election year. In December the GOP insisted on a February decision by the White House on the project as a price for a payroll tax break. It was too much and too fast, and Obama ended the charade with his announcement.

Since the pipeline crosses an international boundary, the plan needed State Department approval, hardly a typical presiding agency for the 1,700-mile-long energy project. The touted benefits such as jobs and energy independence carry appeal but are worth serious scrutiny, as are claims about dangers to wildlife and water supplies. Spills in Montana plus the BP Gulf Coast blowout two years ago have made the public unjustifiably nervous.

The White House is already taking a beating from Obama's likeliest Republican opponents. Mitt Romney called the decision "shocking," and Newt Gingrich said the move was "stunningly stupid."

It's neither. The White House has shown a practical streak on energy issues: working with Detroit on higher-mileage vehicles, and curbing mercury emissions from power plants after lengthy health studies. 

Republicans joined in criticism by the oil and gas industry and the U.S. Chamber of Commerce, saying the President is sacrificing the nation's energy independence and the creation of U.S. jobs to win the election.

Obama blamed Republicans for forcing the action by setting a deadline as part of legislation that temporarily extended a payroll tax cut..

Transcanada ( TRP), the energy giant bidding to build the pipeline, projects the undertaking would create 20,000 jobs in the U.S., including 13,000 positions in construction and 7,000 in manufacturing. That figure, based on a report by a consulting firm hired by Transcanada to assess the project's economic impact, has been widely cited by Keystone backers on Capitol Hill. Other estimates advanced by supporters of the pipeline have been even more optimistic, with the U.S. Chamber of Commerce claiming it could create 250,000 permanent U.S. jobs.

But subsequent analysis suggests that Keystone's job-creating potential is more modest. The U.S. State Department calculated last year that the underground pipeline would add 5,000 to 6,000 U.S. jobs. One independent review of Keystone puts that number even lower, with the Cornel University Global Labor Institute finding that the pipeline would add only 500 to 1,400 temporary construction jobs.

The authors of the September report also said that much of the new employment stemming from Keystone would be outside the U.S. Transcanada itself cast doubt on its employment forecast when a vice president for the company said last fall that the 20,000 jobs Keystone would create were temporary and that the project would likely yield only "hundreds" of permanent positions.