Does the Keystone Pipeline really support national security?

Many from the right have been harking on the immediate construction and opening of the Keystone Pipeline. Obviously, economic reasons are given as job creation is a huge topic during an election year, especially with 8.5% unemployment rate. Lately, there has been another issue raised, supporting the pipeline; national security. It’s not a new concept, people have been citing America’s dependence on foreign oil as a national security concern since 1979 when oil production dropped and increased prices caused economic shocks to rock the country. But does the Keystone Pipeline really offer less dependence on Middle East oil?

It’s looking more and more like the answer in a resounding “no.” While the petroleum industry is spending millions on commercials advertising the potential job opportunities the pipeline would create, environmentalists are trying to match the oil industry with commercials warning of dire environmental consequences. It seems the larger issue is being ignored; the implications of being less dependent on foreign energy sources. The purposed pipeline would extend into Nebraska, carrying sands from our friendly neighbor to the North. From there, oil will be carried down to the oil refineries on the Gulf Coast. Many of the Gulf Coast refineries are in international trade zones, and the refined product can be bought by foreign entities without paying U.S. taxes.

Valero Energy Corporation, an international marketer of transportation fuels, is one of the largest planned buyers from the potential pipeline. Valero has already told its stock holders that it plans to refine the crude oil purchased from Keystone in the Gulf, then sell it internationally. It seems other petroleum companies plan to follow suit. So if the pipeline has potentially devastating environmental effects, and it isn’t contributing to the national energy stocks and therefore national security, why are so many people arguing for it? Job creation is one aspect, but the majority of jobs created would be temporary, during the construction. If President Obama is against the pipeline, as he seems to be, his camp definitely needs to adjust its attack strategy.

Of additional note, the longer the US puts off investment and development of non-petroleum based energy sources, the longer the US remains dependent on foreign energy supplies. Whether its coming from a current ally or not, the fact is we will still be dependent on other countries. And finally, the pipeline would increase the price of fuel for Midwestern farmers. Below is a quote from TransCanada’s (the Canadian oil producer that would run the pipeline) permit application to the US government.

“Existing markets for Canadian heavy crude, principally PADD II [U.S. Midwest], are currently oversupplied, resulting in price discounting for Canadian heavy crude oil. Access to the USGC [U.S. Gulf Coast] via the Keystone XL Pipeline is expected to strengthen Canadian crude oil pricing in [the Midwest] by removing this oversupply. This is expected to increase the price of heavy crude to the equivalent cost of imported crude. The resultant increase in the price of heavy crude is estimated to provide an increase in annual revenue to the Canadian producing industry in 2013 of US $2 billion to US $3.9 billion.”