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Obama's Keystone Announcement: Welcome Yet Meaningless

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Ticker: U.S. Oil Consumption

By Deborah Solomon

President Barack Obama traveled to Oklahoma -- the heart of Republican territory -- to beat back criticism that his administration's energy policies are driving up gas prices, announcing an expedited review of a portion of a controversial oil pipeline.

The project is a long time in coming and, as we've said previously, we're glad to see Obama committing to a pipeline that can create jobs and economic growth. But today's announcement was little more than stagecraft.

The expedited review is unlikely to affect the project's timeline. As Bloomberg News reports, the southern leg of TransCanada's Keystone XL pipeline is scheduled to begin construction as early as June and company officials say the quicker review is unlikely to affect that timeline.

That said, Obama's move is a welcome one, paired as it was with a commitment to expedite other oil and gas projects and a renewed commitment to alternative energy sources. As Obama succinctly put it, the U.S. produces 2 percent of the world's oil supply but consumes 20 percent. You can do the math. We need to either produce more, consume less or both.

The expedited portion of the pipeline will carry crude from Cushing, Oklahoma, to the Gulf Coast. The overall project, which was denied a permit in January, would carry oil-sands crude from Canada to the Texas coast. Obama reiterated his contention that his administration had no choice but to deny the permit after Congress forced a decision before a requisite environmental review was complete. He has hinted, however, that it will ultimately get approval. We eagerly await that move.

(Deborah Solomon is a member of the Bloomberg View editorial board. Follow her on Twitter.)

For more quick commentary from Bloomberg View, go to The Ticker.

 

-0- Mar/22/2012 17:50 GMT

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