President’s Obama’s Veto of The Keystone XL Pipeline Act

To: Richard Burr From: Antonia Giles Date: February 2015 Subject: Keystone Pipeline Do not override President’s Obama’s veto on The Keystone XL Pipeline Act President Obama has made it clear that he does not support the Keystone Pipeline because the benefits that the Pipeline will have for the American people, and the American economy, will be short-lived compared with the lasting environmental impacts of the Pipeline. Thus, when Mr. President does veto the Bill, I urge you not to override the veto because ultimately, Obama’s reasoning is sound. SWOT Analysis Strengths: It will provide jobs, which will help to grow the economy; it will guarantee for the U.S. energy independence, which some Republicans believe that not being dependent on foreign oil will strengthen our national security efforts. However, the actual amount of jobs created will not be substantial, and since it is Canadian oil it will not reduce our dependence on foreign oil. The strengths of building the Pipeline—and thus overriding the veto—are only perceived strengths. In truth, The Pipeline will have little effect on the production of the Canadian oil sands, gasoline prices or the overall job market in the United States.² Weakness: Its environmental impact. According to the State Department’s Environmental Impact Statement, the 830,000 barrels of oil that the Pipeline would transport each day would add an extra 1.3 million to 27.4 million metric tons of CO₂ to the atmosphere each year. ⁴ Even this is a perceived weakness because the State Department’s Statement goes on to say, “Approval or denial of any one crude oil transport project, including the proposed project, remains unlikely to significantly impact the rate of extraction in the oil sands, or the continued demand for heavy crude oil at refineries in the U.S.”⁴ What this means is that even if the Pipeline is rejected, the same amount of oil will be transported, simply through alternative means (i.e. railways), and will thus have the same impact on the environment as building the Pipeline will. Furthermore, as David Biello in a blog post for Scientific American writes “The impact of a single pipeline in North America could hypothetically be trivial given that climate change is a global problem. Earth’s atmosphere does not distinguish between an individual molecule of carbon dioxide wafting up from the U.S. Midwest versus one spewed in the Middle East.⁵” So, the environmental concern is not as exaggerated as the President makes it seem. Opportunity: You will be able to be seen as a progressive Republican if you don’t override the veto—gaining the respect of liberals and environmentalists—but because the oil will still be produced and transported you will not be hindering your ultimate goals of energy independence and job creation. Threats: You risk disappointing your constituents. However, if you let your constituents know that with or without the Pipeline we will extract the same amount of oil from the oil sands, they may be less adverse to Obama’s veto, because this will appear to help foster bipartisanship. Furthermore, you can show your supporters how falling oil prices hurt the future of investments and expansions. You can convey to your supporters the following logic: “If companies expect oil prices to stay low for many years—below about $65 per barrel or so—then it’s probably not worth it to plow money into any more big new oil-sands operations⁶,” and companies will think twice about investing in this project. The Effect of Falling Gas Prices Point out to environmentalists how the falling gas prices will affect the future of the oil market. In a piece published by the Brookings Institute, William A. Galston asserts: “Fundamental changes to the world crude oil market…would be required to significantly impact the rate of production in the oil sands.⁴” Today, gas prices are lower than they have been in years. This drop in gas prices is the fundamental change to the world crude oil market that can actually have an impact on production in the oil sands. If oil prices keep plummeting, the extra cost of rail transport will become a bigger burden for producers. The State Department’s Impact Statement argues that if oil prices drop to $65 and $75 per barrel, then the rejection of the Keystone pipeline could, in fact, hurt oil sands production. Furthermore, if oil prices drop below $65 per barrel, many oil-sands projects become uneconomical with or without the Pipeline.¹ The falling gas prices, then, are of interest to both environmentalists and your constituents. Problems with the Current Framing of the Issue The current framing of the issue has us pitting jobs versus the environment, “Republicans say the pipeline will create jobs and spur the economy while environmentalists and some Democrats say it will destroy pristine forests and create carbon pollution.²” However, as was discussed above, both arguments are incorrect. Like President Obama has reiterated, “Allowing the Keystone pipeline to be built requires a finding that doing so would be in our nation’s interest. And our national interest will be served only if this project does not significantly exacerbate the problem of carbon pollution.” A better way to frame the Keystone Pipeline question is that the construction of the Pipeline is not in America’s best interest considering the falling gas prices, the fact that the American economy will not be as rigorously stimulated as once thought, and that it will not lead to energy independence. Ultimately, this Pipeline has become a symbol of our commitment to the American people, because both the economic impact and the environmental impact are so minimal that it does not really matter if the Pipeline is built. The importance of the Pipeline comes from what it represents. It will become a symbol for Republican commitment to working with the Democrats as opposed to against them, which is important, given the Republican majority in Congress right now. Noted Environmentalist Bill McKibben says, “It does not solve climate change if we stop Keystone, but if we build out the oil sands, it’s an enormous quantity of carbon that won’t leave the ground. If the President blocks Keystone XL, he becomes the first world leader to say, ‘Here’s a project we’re not doing because of its effect on the climate.²” It would be beneficial to your career and to your political legacy if you decided not to override the President’s veto and were a part of this historic and symbolic decision. What you’re going to show with your decision is how committed you will be as a Senator to reaching across the aisle. References:

1. Plummer, B. Obama sounded skeptical about Keystone XL on the Colbert Report. Vox (2014). at <http://www.vox.com/2014/12/9/7359865/obama-colbert-keystone>
2. Davenport, C. Experts Say That Battle on Keystone Pipeline Is Over Politics, Not Facts. The New York Times (2015). at http://www.nytimes.com/2015/01/09/us/senate-panel-approves-keystone-pipeline-bill.html
3. Smith, L. Smith: President Out of Excuses, Out of Touch on Keystone. (2015). at <http://science.house.gov/press-release/smith-president-out-excuses-out-touch-keystone>
4. Department Of State. The Office of Website Management, B. of P. A. Final Environmental Impact Statement (FEIS). (2012). at http://keystonepipeline-xl.state.gov/archive/dos_docs/feis/
5. Galston, W. A. Say Yes to the Pipeline—and New Green Regulations: Why Triangulation is the Answer on Keystone. The Brookings Institution (2013). at http://www.brookings.edu/research/opinions/2013/03/15-keystone-pipeline-obama-galston
6. Biello, D. Keystone Pipeline Will Impact Climate Change, State Department Reports | Observations, Scientific American Blog Network. (2014). at <http://blogs.scientificamerican.com/observations/2014/01/31/keystone-pipeline-will-impact-climate-change-state-department-reports/>
7. Plummer, B. How important is the Keystone XL pipeline in a world of low oil prices? Vox (2015). at <http://www.vox.com/2015/1/8/7516069/oil-prices-keystone>
8. Press, T. A. White House says Obama will veto Keystone pipeline. WJLA (2015). at <http://www.wjla.com/articles/2015/01/breaking-news-white-house-says-obama-will-veto-keystone-pipeline-110345.html>