On Jan. 8, the Senate took up approval of the proposed oil pipeline from Alberta, Canada to the Gulf Coast. Unfortunately Keystone XL — the regrettable name given to the pipeline by TransCanada Corporation — has become a political football with the merits of the issue being ignored in the political tussle.
The Republican majority vows to pass legislation authorizing KXL. On Friday, the House voted 266 to 153 in favor of the pipeline, and the Nebraska Supreme Court cleared the way for its construction through the state. Even so, the White House last week announced President Obama will veto the legislation if it reaches his desk.
The environmental community drew a line in the sand on KXL, arguing that building the pipeline would create more greenhouse gases by accelerating the production of oil from the oil sands of northern Alberta. This assumes that, without the pipeline, the Canadian private sector would simply leave the oil in the ground. That’s just flat wrong.
Market forces reflected in the price of crude oil will have a bigger impact on the pace of Canadian oil production than building or not building this pipeline.
The United States already buys oil produced from the oil sands, and each year we buy more, even without the pipeline. The real issue is whether that Canadian oil will be transported by rail or pipeline.
In 2013, the United States imported 2.5 million barrels per day of Canadian crude oil. That’s 33 percent of our total imports, and Canada is our largest foreign supplier of oil. Already 70 oil and gas pipelines cross the U.S.-Canada border. TransCanada’s pipeline would be number 71.
In 2013, 48 percent of the oil imported from Canada came from oil sands. Without KXL. Just to be clear, the United States in 2013 imported 1.2 million barrels of oil sands oil each and every day.
The KXL pipeline is designed to transport 830,000 barrels per day of crude oil. 730,000 of those barrels will come from Canada. TransCanada is obligated to carry up to 100,000 barrels of oil per day from Idaho and Montana — U.S. oil that is currently being transported by train and truck.
Opponents argue that after the pipeline is built, there will be few permanent jobs created in the United States. That’s right.
The same is true with all infrastructure projects. A few blocks from my house, workers are building university dorms. When the dorms are complete, those construction jobs disappear. The same goes for a bridge or a tunnel. Or a pipeline.
Now here’s the argument that the Canadians will never make: We owe it to Canada to allow Canadian capital to be invested in the United States to build this pipeline. What? We owe something to Canada?
Canada is our most important client. We export four times as much to 35 million Canadians as we do to 1.3 billion Chinese. Trade with Canada and Canadian investment in this country generate almost 9 million U.S. jobs and are responsible for $1 trillion of our GDP. Your most important client is your biggest client. That’s Canada.
Canada is also our closest ally.
It subordinated its interests to those of the United States in the 1994 NAFTA by agreeing that in the event of an oil shortage, it would treat its U.S. customers the same as Canadians and reduce oil to its own citizens by the same percentage as it was reducing shipments of oil to American customers.
Canada has stood with us internationally, from fighting the Taliban in Afghanistan to fighting Ebola in West Africa.
After 9/11 Canada agreed to treat entry to Canada by the same standards as we treat entry into the United States and to share information with us.
We are essentially two sovereign countries with one common security perimeter.
Finally, geo-strategically we want the ability to replace Venezuelan oil with Canadian oil should we ever find it necessary. The oil from Canada is extra heavy oil just as is Venezuelan oil, and the Texas and Louisiana refineries are uniquely suited for this purpose.
When I was ambassador to Venezuela, Hugo Chávez would regularly threaten to cut off oil shipments to the United States. It’s time to turn the tables on Chávez’s “Bolivarian revolution.” With Canadian oil, we have security of supply, not Venezuela’s political posturing — especially in these times of falling oil prices.
Charles Shapiro served as the U.S. ambassador to Venezuela 2002-2004 and was principal deputy assistant secretary of state for the Western Hemisphere. He is now the president of the World Affairs Council of Atlanta.