Why is Obama blocking infrastructure
projects?
MERRILL MATTHEWS • | MAY 29, 2015
The recent California oil pipeline spill has highlighted an important problem: Even though the United States has surpassed Russia and Saudi Arabia to become the world's top energy producer, our nation's infrastructure for transporting, storing and delivering energy hasn't kept up with production.
The U.S. has some 185,000 miles of pipeline transporting crude oil from where it's being produced to refineries, storage facilities or transportation outlets. And it has another 320,000 miles of natural gas transmission pipelines.
While pipelines are the cheapest and safest way to transport oil and gas to their destinations, many of them have been in use for decades and are starting to need repair or replacement.
In addition, innovative drilling techniques have allowed us to extract oil and natural gas from previously impregnable shale formations, and so new pipelines need to be constructed to supply many of the new production sites.
These infrastructure efforts depend on private sector funds, not tax dollars. But there's a problem: Multiple government agencies often have to sign off on each project, which can take years. And in some cases the administration's opposition is ideological rather than practical.
Consider the most obvious example: the Keystone XL Pipeline. The $5.3 billion pipeline would connect U.S. refineries in Texas to the oil sands in Alberta, Canada, creating an estimated 42,000 high-paying construction jobs. But the president stonewalled this infrastructure project for more than six years and vetoed congressional legislation trying to push approval.
TransWest Express is a $3 billion multi-state power-line that would bring wind energy from Wyoming to the West Coast. In 2011, the White House identified it as a project that should "quickly advance" through the red tape. And yet, the power-line has been waiting for approval since 2007.
Maine's Downeast liquefied natural gas (LNG) pipeline, which would provide imported natural gas to New England, has been awaiting federal approval since 2006. And the Oregon LNG pipeline, which would be able to both import and export natural gas, has been awaiting approval since 2008. Both are hoping for approval in 2016.
projects?
MERRILL MATTHEWS • | MAY 29, 2015
The recent California oil pipeline spill has highlighted an important problem: Even though the United States has surpassed Russia and Saudi Arabia to become the world's top energy producer, our nation's infrastructure for transporting, storing and delivering energy hasn't kept up with production.
The U.S. has some 185,000 miles of pipeline transporting crude oil from where it's being produced to refineries, storage facilities or transportation outlets. And it has another 320,000 miles of natural gas transmission pipelines.
While pipelines are the cheapest and safest way to transport oil and gas to their destinations, many of them have been in use for decades and are starting to need repair or replacement.
In addition, innovative drilling techniques have allowed us to extract oil and natural gas from previously impregnable shale formations, and so new pipelines need to be constructed to supply many of the new production sites.
These infrastructure efforts depend on private sector funds, not tax dollars. But there's a problem: Multiple government agencies often have to sign off on each project, which can take years. And in some cases the administration's opposition is ideological rather than practical.
Consider the most obvious example: the Keystone XL Pipeline. The $5.3 billion pipeline would connect U.S. refineries in Texas to the oil sands in Alberta, Canada, creating an estimated 42,000 high-paying construction jobs. But the president stonewalled this infrastructure project for more than six years and vetoed congressional legislation trying to push approval.
TransWest Express is a $3 billion multi-state power-line that would bring wind energy from Wyoming to the West Coast. In 2011, the White House identified it as a project that should "quickly advance" through the red tape. And yet, the power-line has been waiting for approval since 2007.
Maine's Downeast liquefied natural gas (LNG) pipeline, which would provide imported natural gas to New England, has been awaiting federal approval since 2006. And the Oregon LNG pipeline, which would be able to both import and export natural gas, has been awaiting approval since 2008. Both are hoping for approval in 2016.
The list of stalled energy infrastructure projects is long and getting longer. Without an adequate
energy infrastructure, other means of transportation have stepped in to fill the gap.
Rail has picked up some of the slack, transporting more than 400,000 carloads of crude oil last year compared to just 9,500 in 2008. Its primary benefit is that railroads reach areas where pipelines have yet to be built.
And while rail can be more convenient than pipelines, it's also more expensive: It costs between $10 and $15 to ship a barrel of oil by rail versus about $5 by pipeline.
In addition, using rail to transport oil has delayed the shipment of other products, such as time- sensitive agricultural goods.
And several recent railroad accidents pushed the federal government to propose upgrading safety measures on rail cars that haul flammable liquids, which could limit their availability even more.
But rail should always have been considered a stopgap solution; it simply can't replace the needed additional pipeline networks.
The good news is that the energy sector is ready, willing and able to shoulder the financial burden of expansion. Companies are eager to invest billions of their own — not taxpayers' — dollars in shovel- ready projects that will create thousands of high-paying jobs to expand and increase the nation's energy infrastructure.
Energy development has been crucial to America's economic growth in recent years. The feds have the power to ensure that economic success has only just begun, but only if officials stop standing in the way of a needed infrastructure expansion.
Merrill Matthews is a resident scholar with the Institute for Policy Innovation in Dallas, Texas. Follow at twitter.com/MerrillMatthews. Thinking of submitting an op-ed to the Washington Examiner? Be sure to read our guidelines on submissions.
Rail has picked up some of the slack, transporting more than 400,000 carloads of crude oil last year compared to just 9,500 in 2008. Its primary benefit is that railroads reach areas where pipelines have yet to be built.
And while rail can be more convenient than pipelines, it's also more expensive: It costs between $10 and $15 to ship a barrel of oil by rail versus about $5 by pipeline.
In addition, using rail to transport oil has delayed the shipment of other products, such as time- sensitive agricultural goods.
And several recent railroad accidents pushed the federal government to propose upgrading safety measures on rail cars that haul flammable liquids, which could limit their availability even more.
But rail should always have been considered a stopgap solution; it simply can't replace the needed additional pipeline networks.
The good news is that the energy sector is ready, willing and able to shoulder the financial burden of expansion. Companies are eager to invest billions of their own — not taxpayers' — dollars in shovel- ready projects that will create thousands of high-paying jobs to expand and increase the nation's energy infrastructure.
Energy development has been crucial to America's economic growth in recent years. The feds have the power to ensure that economic success has only just begun, but only if officials stop standing in the way of a needed infrastructure expansion.
Merrill Matthews is a resident scholar with the Institute for Policy Innovation in Dallas, Texas. Follow at twitter.com/MerrillMatthews. Thinking of submitting an op-ed to the Washington Examiner? Be sure to read our guidelines on submissions.
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