Try as they might, big government cannot stop free enterprise. TransCanada, the company building the Keystone Pipeline, announced Monday that it will proceed with building the section of the pipeline that would connect Cushing, Oklahoma, with refineries on the Gulf Coast in Texas.
This announcement is big news because it shows that TransCanada is committed to the project and willing to proceed in phases. The Cushing to Texas portion (now known as the “Gulf Coast Project”) of the pipeline can proceed without the cross-border permit being granted. TransCanada must still negotiate with some landowners to secure all the necessary easements, but reports say as much as 99 percent of those easements are already secured. The Gulf Coast Project will still need approval from the Army Corps of Engineers, so let’s hope the feds get it right this time.
In a press release about the announcement, TransCanada president and CEO Russ Girling said, “The Gulf Coast Project will transport growing supplies of U.S. crude oil to meet refinery demand in Texas. Gulf Coast refineries can then access lower cost domestic production and avoid paying a premium to foreign oil producers. This would reduce the United States’ dependence on foreign crude and allow Americans to use more of the crude oil produced in their own country"(emphasis added).
The company also announced it would reapply for the cross-border permits necessary to increase capacity to Cushing. A reported sticking point had been the pipeline’s route in Nebraska, and the company is already working toward a solution. According to their press release, “TransCanada will continue to work collaboratively with the State of Nebraska on determining an alternative route for Keystone XL that avoids the Sandhills. TransCanada has been working on assessing the routing in Nebraska since November 2011, following the State Department’s notice to delay a decision on a Presidential Permit until an adjusted route that avoids the Sandhills was developed.”
This is great news for Oklahoma, great news for America, and it provides a unique opportunity for redemption. In addition to significant economic-development opportunities, this is the chance to push back against overzealous regulators and special-interest groups while simultaneously providing a public benefit and supporting core services.
Overzealous Regulators and Special-Interest Groups
In round 1, TransCanada cooperated with State Department and other agency requests throughout the long process of seeking approval for the project. They agreed to dozens of requirements, months of public meetings and hearings, and three environmental impact studies. Each of the three environmental impact studies conducted was favorable to the project. In fact, the State Department concluded that the pipeline would cause minimal environmental impact if it was operated according to regulations. TransCanada has promised new, thicker pipeline materials and thousands of sensors in an effort to make this one of the safest pipelines ever built. In addition, major sections of the Keystone Pipeline have been in operation for more than two years with no underground leaks so far. Pipelines are still the safest, most effective, most efficient way to transport oil. The first time around, the tail was wagging the dog as the project was held up even after concerns had been addressed and the positive facts had come to light. There is still hope that this round can be conducted properly and not politically.
Even Broader Opportunity for Public Benefit
The Gulf Coast Project also provides incredible opportunities for local governments and schools in regard to the additional revenue that can be generated. There are roughly 80 miles of the Keystone Pipeline already in the ground and operating in Oklahoma. That relatively short distance is already producing $7.5 million in ad valorem taxes each year in those areas. The vast majority of that revenue (80 percent) benefits area schools, and the remaining 20 percent helps county government provide core services to citizens. Even better news is that the money coming in to help schools in the area along the pipeline impacts the overall state funding formula for schools in Oklahoma. Revenue that impacts the funding formula reduces the amount the state has to send to those schools in that area, allowing more money to be used in other areas in the state. That means Keystone is already helping schools all across the state, not just those in the pipeline area. Completion of the Gulf Coast Project would bring an additional $14 million per year in ad valorem tax revenue for Oklahoma for a total of $22 million per year.
America needs the kind of private-sector investment and development that this project represents. We need to support entrepreneurs in the real economy instead of relying on the myth that government will somehow stimulate the economy and create jobs. Political posturing from government officials threatened progress the first time, but this time we can show that free-market principles are far better than government intervention. President Reagan is famous for saying, “Government can’t control the economy without controlling people,” and it eventually uses “force and coercion to achieve its purpose.” But most importantly, President Reagan believed that government intrusion “interferes with the people’s right to know.”
The people have a right to know if they can trust their government to do the right thing. Because it is hard to kill the spirit of an entrepreneur, we now have a second chance for them to get it right. Let’s hope they take full advantage!
What elected officials are saying:
Governor Fallin Applauds TransCanada Decision to Begin Construction of Southern Portion of Keystone Pipeline
Oklahoma Governor Mary Fallin today applauded TransCanada’s decision to proceed with the construction of an oil pipeline from Cushing, Oklahoma to the U.S. Gulf Coast. The pipeline represents the southern leg of the Keystone XL Pipeline project that would transport oil from Canada and various U.S. markets to the Gulf Coast.
“Connecting Cushing to oil markets in the Gulf Coast will provide both an immediate economic jolt to the state of Oklahoma as well as a long term boost to our energy sector,” Fallin said. “Construction of the pipeline alone will create 1,200 jobs, while increasing access to the important markets along the coast will help energy producers for many years to come. This is an important, positive step forward for Oklahoma, and my thanks go out to TransCanada for its leadership on this issue.”
TransCanada also announced today that it plans to file a Presidential Permit application (cross border permit) in the near future for the Keystone XL Project from the U.S./Canada border in Montana to Steele City, Nebraska. Fallin once again called on President Obama to quickly approve the project.
“The Keystone XL pipeline is exactly the kind of shovel-ready project that President Obama should be supporting,” Fallin said. “If the project is approved in its entirety, we can expect up to 20,000 construction jobs and as many as 250,000 total jobs to be created. Furthermore, the substantial upgrade to our energy infrastructure would help bolster the production of North American energy and wean the United States off its dependence on hostile oil regimes overseas. It’s a win-win project that is important to both our national security and our economic security.”
Lt. Governor Lamb Praises Gulf Coast Project Construction
Lt. Governor Todd Lamb praised the efforts of TransCanada who announced Monday the construction of a pipeline from Cushing to the Gulf of Mexico that will create approximately 1,200 jobs in Oklahoma. This pipeline is the southern portion of what was known as the Keystone XL pipeline.
“Our state’s economy is driven by the oil and gas industry, and this pipeline will make it stronger,” said Lt. Governor Lamb. “As Small Business Advocate, I am encouraged to see that as a result of this pipeline, Oklahoma will see more construction jobs, more industry jobs, and more economic activity across the state.”
Last September, Lt. Governor Lamb was the first to testify at a State Department public hearing requesting that the State Department and the Obama Administration stand up for American workers, get our economy moving again, and approve the Keystone XL pipeline. In his testimony, the Lt. Governor addressed a number of positive impacts the pipeline would have on our state and nation, including our national security. During his role as a special agent with the United States Secret Service, Lt. Governor Lamb was assigned to the national Joint Terrorism Task Force, receiving training and briefings at the FBI and Secret Service headquarters as well as the CIA headquarters in Langley, Virginia.
“I support the construction of this pipeline not only due to economic or commercial reasons, but also because of my past experience in homeland security,” said Lt. Governor Lamb. “This project will strengthen our national security and energy security.”
Senate Pro Tem Bingman Statement on TransCanada Gulf Coast Project
Senate President Pro Tempore Brian Bingman issued the following statement Monday following TransCanada’s announcement of reapplication for a Presidential Permit application to complete the Keystone XL pipeline project as well as TransCanada’s intent to proceed with construction of a pipeline from Cushing, Oklahoma to refineries in the Gulf of Mexico. This section of pipeline is projected to create more than one thousand direct jobs in Oklahoma alone.
“Gas prices have more than doubled since President Obama’s first day in office. Meanwhile, we’ve got plenty of oil just sitting in a terminal in Cushing, Oklahoma, waiting to be refined,” said Bingman, R-Sapulpa.
“President Obama continues to stonewall a common-sense business plan in the Keystone XL pipeline—one that would create thousands of jobs and put us on the path to an energy future powered by American resources and ingenuity.”
“I applaud TransCanada for proceeding with construction of the southern portion of Keystone XL. Thousands of Oklahomans will see the benefit in jobs and dollars flowing into our economy, and our country will be more secure for it.”
Corporation Commission applauds decision to move ahead with part of Keystone XL project
Calling it too important to fall victim to politics, the Oklahoma Corporation Commission is praising a decision by TransCanada Corporation to build the southern portion of the Keystone XL pipeline project from Oklahoma to Texas.
Commission Chair Dana Murphy said the project is part of the answer to a long-standing concern of Oklahoma producers and state officials.
“The Commission has long been concerned and held meetings on the problem posed by the fact that the terminal in Cushing, Oklahoma can receive far more oil than it’s capable of shipping out,” said Murphy. “This will help ease that concern.”
Commission Vice Chair Bob Anthony said the decision comes just in time.
“During the delay of a final decision on the entire Keystone XL project, we have seen crude and fuel prices soar, badly needed jobs that the pipeline would create in the U.S. go lacking, and Canada start to explore an alternative plan to sell some of the oil we need to China instead,” Anthony said.
Commissioner Patrice Douglas called the company’s decision good news for Oklahoma.
“The southern part of the pipeline is the key needed to unlock the glut of oil now held in storage in Cushing because of a lack of pipeline capacity,” Douglas said. “The project will enable Oklahoma producers to get their oil to market, meaning more usable American oil for the U.S. and a stronger economy for Oklahoma.”
The southern part of the Keystone XL pipeline project will transport oil from Cushing to Gulf coast refineries. Unlike the northern segment of the Keystone XL project, which would start in Canada, the southern segment does not require presidential approval. TransCanada estimates the southern project will create 4,000 jobs.