On December 17, the President signed legislation that included a 60-day period in which Mr. Obama must make a decision on the pipeline. He can rule that the project is not in the national interest; rule in favor of the pipeline and thereby giving a green light to construction to begin in five of the six states it would cross; or not rule at all, thereby also allowing the construction to move ahead. The legislation signed into law allows for the pipeline owner (TransCanada), the state of Nebraska and the State Department to reach an accord to re-route part of the pipeline in that state.
From an environmental standpoint, the project has been under review for more than three years, and the Final Environmental Impact Statement issued by the State Department on August 26, 2011, satisfies all requirements needed for issuing a presidential permit. In addition, TransCanada agreed to the re-routing of the pipeline around the Nebraska Sandhills, thereby answering and removing the last environmental question. Of course, there will be activists that persist in scaremongering and opposing the project, but these are fringe players that oppose any and all expansion of carbon-based energy development and use.
As for the economic impact, approval of the pipeline should be a no-brainer.
First, Canada already tops the list of nations from which the U.S. imports oil. Canada provides almost 2.4 million barrels per day, or about a quarter of our imports. The pipeline could boost those imports to 4 million barrels a day. That would be twice what the U.S. imports from the Persian Gulf region today. Compare the stability of and our friendly relations with Canada to the ongoing troubles in the Persian Gulf - the latest being Iran's nuclear advancement - and it's clear that this pipeline is in the national interest, including providing a secure source of oil for consumers and businesses.
Second, beyond the obvious economic benefits of having a more secure source of oil, the project itself would be a major economic positive. The Canadian Economic Research Institute estimates that investment in this project would generate a $521 billion boost over 25 years in U.S. GDP, and growth in U.S. jobs from 21,000 jobs in 2010 to 465,000 jobs in 2035.
Third, the Keystone project would be a plus for small businesses. Based on the latest Census Bureau data (2009), 98.7% of employer firms involved in supporting oil and gas operations have fewer than 500 workers, and 83.3% have less than 20 employees. As for firms in the oil and gas pipeline construction industry, 94.9% have less than 500 employees, and 61.1% have fewer than 20 workers.
The Keystone project certainly is in the interest of small businesses - both as energy consumers, and as firms at work in the energy industry.
The benefits to the nation are clear. Let's hope that President Obama puts the nation ahead of whatever political calculations might also be at work.
Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His new book is "Chuck" vs. the Business World: Business Tips on TV.