Economy & Business

The Keystone Catechism

Debate over the pipeline has demonstrated a remarkable ignorance of economics on the part of Obama.

Not since the multiplication of the loaves and fishes near the Sea of Galilee has there been creativity as miraculous as that of the Keystone XL pipeline. It has not yet been built but already is perhaps the most constructive infrastructure project since the Interstate Highway System. It has accomplished an astonishing trifecta:

It has made mincemeat of Barack Obama’s pose of thoughtfulness. It has demonstrated that he lacks even a rudimentary understanding of the most basic economic realities. It has dramatized environmentalism’s descent into infantilism.

Obama entered the presidency trailing clouds of intellectual self-regard. His carefully cultivated persona was of a uniquely thoughtful, judicious, deliberative, evidence-driven man comfortable with complexity. The protracted consideration of Keystone supposedly displayed these virtues. Now, however, it is clear that his mind has always been as closed as an unshucked oyster.

America built the Empire State Building, then the world’s tallest office building, in 410 days during the Depression. We built the Pentagon, still the world’s largest low-rise office building, in 16 months while waging a war across two oceans. Keystone has been studied for more than six years. And Obama considers this insufficient?

Actually, there no longer is any reason to think he has ever reasoned about this. He said he would not make up his mind until the Nebraska court ruled. It ruled to permit construction, so he promptly vowed to veto authorization of construction.

The more he has talked about Keystone, the less economic understanding he has demonstrated. On November 14, he said Keystone is merely about “providing the ability of Canada to pump their oil, send it through our land, down to the Gulf, where it will be sold everywhere else. That doesn’t have an impact on U.S. gas prices.” By December 19, someone with remarkable patience had explained to him that there is a world market price for oil, so he said, correctly, that Keystone would have a “nominal” impact on oil prices, but then went on to disparage job creation by Keystone. He said it would create “a couple thousand” jobs (the State Department study says approximately 42,100 “direct, indirect, and induced”) and said, unintelligibly, “those are temporary jobs until the construction actually happens.” Well.

Obama revealed his economic sophistication years ago when he said that ATMs and airport ticket kiosks cost jobs. He does not understand that, outside of government, which is all that he knows or respects, all jobs are “temporary.”

John Tamny, editor of Real Clear Markets and an editor of Forbes, notes that Borders had 10,700 employees and 399 bookstores until it had none of either, thanks in part to Amazon, whose 150,000 employees have probably participated in enough creative destruction to know that permanence is a chimera. Blockbuster — remember that? remember late fees? — had 60,000 employees and more than 9,000 stores until rivals such as Netflix appeared.

To oppose the pipeline is to favor more oil being transported by trains, which have significant carbon footprints, and accidents. To do this in the name of environmental fastidiousness is hilarious. America has more than 2 million miles of natural-gas pipelines and approximately 175,000 miles of pipelines carrying hazardous liquids, yet we are exhorted to be frightened about 1,179 miles of Keystone?

Or about the oil itself? Appearing on Fox News Sunday, Senator Chris Coons (D., Del.) objected that if Congress authorizes construction of Keystone this “would take consideration out of the hands of the administration,” and “out of the current administration process.”

Leave aside the question of how much of this process-that-proceeds-nowhere Coons considers enough. And ignore the peculiarity of a legislator dismayed that the legislative branch might actually set national policy. But note the following, not because Coons is eccentric but because he is representative of Democratic reasoning: “Keystone means unlocking the Canadian tar sands, some of the dirtiest sources of energy on the planet and allowing those tar sands to go across our American Midwest and then reach the international economy and our environment.”

No jury would convict Coons of sincerity. Anyone intelligent enough to express that nonsense is too intelligent to believe it. Coons cannot believe that, absent Keystone, Canada will leave vast wealth — the world’s third-largest proven crude oil reserve, larger than Iran’s — untapped. The Canadian oil is going into the international market, and much of it into internal combustion engines around the world, even if this displeases Democratic senators who have demonstrated a willingness to look ludicrous rather than deviate from an especially silly component of today’s environmental catechism.

— George Will is a Pulitzer Prize–winning syndicated columnist. © 2015 The Washington Post

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