Republicans May Make Keystone a Budget Issue, Ryan Says
House Budget Committee Chairman Paul Ryan said the Keystone XL oil pipeline may be part of budget negotiations as his Republican colleagues criticized President Barack Obama for saying the project wouldn’t create many jobs.
The Wisconsin Republican, who was his party’s 2012 vice-presidential nominee, told Bloomberg BNA yesterday that federal approval of the TransCanada Corp. (TRP) project and tax-code changes may be seen as concessions in looming budget talks with the White House.
“Given that we have all of this new oil and gas technology, these new technologies, these new discoveries, and the need for pipeline infrastructure and regulatory certainty, I think House Republicans put energy in the category of pro-growth issues that can help us with our deficit as it leads to job creation,” Ryan said. “So yes, we consider those issues as part of these discussions.”
Republicans yesterday faulted Obama for saying that the pipeline would create relatively few permanent jobs, as the contentious energy debate veered into a broader discussion on the budget and the economy.
Obama told the New York Times in an interview published July 28 that there was no evidence that Keystone would be a “big jobs generator.”
Keystone “might create maybe 2,000 jobs during the construction of the pipeline -- which might take a year or two - - and then after that we’re talking about somewhere between 50 and 100 jobs in a economy of 150 million working people,” Obama said. His comments marked the second time in two months that he has spoken publicly about the project, which can be blocked by the State Department because it crosses the border with Canada.
Senator John McCain, speaking yesterday at a lunch sponsored by Bloomberg Government, disputed the president’s characterization and said that the pipeline would create thousands of jobs.
“I just think that it is wrong of him to say that it really wouldn’t mean many jobs when we’ve got 7.6 percent unemployment across this country,” said McCain, an Arizona Republican. “It seems to me that every new job would be important when we have unemployment that high.”
Representative Lee Terry, a Nebraska Republican, said Obama ignored estimates from the U.S. State Department about the jobs that the $5.3 billion construction project proposed by Calgary-based TransCanada would create, directly and indirectly.
“The president now has zero credibility when he speaks about infrastructure projects creating jobs,” Terry, whose home state would be crossed by the pipeline, said in a statement.
The House of Representatives has passed a bill that would remove the pipeline decision from Obama’s control. A similar measure is pending in the Democratic-led Senate.
The criticism over Keystone emerged as Obama makes a renewed push for policies that he says will accelerate the economic recovery, including more infrastructure spending. Last week, the president gave the first of several planned speeches designed to revive a stalled economic agenda, and he’s to speak today in Chattanooga, Tennessee, on domestic manufacturing.
Republicans say that Keystone would create thousands of jobs and help improve U.S. energy security.
Obama’s has said the State Department review should include the project’s global environmental effects. Speaking on climate change last month, he said the pipeline shouldn’t be approved if it would significantly exacerbate carbon-dioxide emissions as advocacy groups that oppose it, including 350.org, contend.
Josh Earnest, a White House spokesman, said yesterday that Obama was “draining the politics out of this debate and evaluating this project on the merits, and that’s exactly the process that’s under way at the State Department right now.”
The State Department said in its draft analysis that Keystone would potentially support 42,100 jobs in the U.S. over the one to two years it would take to build. That figure includes 3,900 people directly employed in construction.
After completion, the project would support about 35 permanent jobs, according to the State Department.
Obama also suggested in his interview with the Times that, for the project to win approval, Canada may have to reduce greenhouse-gas emissions caused by production of the oil sands that the pipeline would carry.
“I’m going to evaluate this based on whether or not this is going to significantly contribute to carbon in our atmosphere,” Obama said. “And there is no doubt that Canada at the source in those tar sands could potentially be doing more to mitigate carbon release.”
Critics of the pipeline say they were increasingly optimistic that Obama would reject it.
“After several years, he’s starting to hear what the environmental community has been saying,” Daniel Kessler, an Oakland, California-based spokesman for 350.org, said in an interview.
In particular, Obama highlighted that the oil produced would be exported from U.S. refineries, potentially raising gasoline prices in some parts of the nation, echoing a point made by pipeline critics.
“It’s clear that the White House is ready to take on the Republicans over climate change, and these disastrous infrastructure projects,” Kessler said.
Business groups said that Obama was underestimating the number of jobs Keystone would create. “Manufacturers are extremely disappointed by the president’s dismissal of the jobs-creating potential of the construction of this important project,” Jay Timmons, president of the Washington-based National Association of Manufacturers, wrote in a blog posting.
“It is not logical to think a $7.6 billion infrastructure project stretching across the entire breadth of the continental U.S. wouldn’t employ thousands of workers both in the manufacturing sector and in constructing the pipeline,” James Millar, a spokesman for TransCanada, said by e-mail.
Millar was including Keystone’s southern leg, to refineries along the Gulf of Mexico, that is already being built. It would connect to the project under State Department review.
“In this economy, any source of private job creation should be welcomed with open arms,” Representative Fred Upton, a Michigan Republican, said in a statement. Upton leads the Energy and Commerce Committee, which has passed a measure that would let Keystone go forward without State Department approval.
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