The battle over the Keystone XL pipeline is slated to heat up after the first of the year, but at the same time, economists are questioning whether it’s even worth building as oil prices drop, and President Barack Obama is saying that it will not benefit the U.S. so much as Canadian oil companies.
"The issue in Keystone is not American oil. It's Canadian oil," Obama said at his last press conference of the year, according to the Associated Press. In addition, there’d be "very little impact" on gas prices in the U.S., he said, and the pipeline would not be “a magic formula to what ails the U.S. economy.”
This is not the first time Obama has implied that the economic promises of Keystone XL may not be all they are touted to be. Back in August 2013 he noted that the number of jobs promised versus the number of permanent jobs that will actually remain is negligible.
That has not deterred Republican Senator Mitch McConnell, who this week said Keystone XL will be the first agenda item for the newly Republican Congress when it reconvenes next year.
It’s "a job creating bill that enjoys significant bipartisan support,” said McConnell, who will take his place as Majority Leader in the next session, to Bloomberg News.
But politics aside, building the pipeline may not be worth the money given falling oil and gasoline prices, the Los Angeles Times reported recently. The project’s costs have escalated from an original $7 billion to $8 billion in the six years since it was first proposed.
“The market shift has put TransCanada in the position of a real estate developer vying to build a skyscraper during the depths of the mortgage crisis,” as the Los Angeles Times put it.
Keystone XL’s supporters are aiming for a veto-proof majority to force passage of legislation that made it through the House of Representatives but in November but failed by one vote in the Senate. The bill would enable the project to go forward despite the need for State Department approval of the portion that crosses the international border between Canada, whose Alberta oil sands the bitumen would come from, and the United States. The route faces legal challenges in Nebraska as well.