The fallout over rejecting the Keystone Pipeline project
Much discussion has taken place since the decision was made to not approve or at least delay the construction of the Keystone Pipeline project by President Obama. I agree in the beginning there were environmental concerns about the project but these seem to have gone by the wayside with agreements made with the individual states involved. I support protecting the environment but I also support the needs of business and our economy.
The number of jobs which would be created by the pipeline with the primary focus on direct jobs related to construction of the pipeline has been covered in news reports but it is much more than that. The addition of thousands of jobs both direct and indirect is greatly needed to give a boost to our economy. I believe the project will eventually go forward, the question is when. In any business environment there are always going to be indirect jobs created in addition to direct jobs. The quantity of these will vary dependent upon the activity involved but the amount in this circumstance is hard to determine at this point in time.
Today the percentage of oil we import from countries who as a rule do not like us is unacceptable. All politicians must understand how the quantity of oil we import from foreign sources affects our economy at all levels of government. Within many states across this country there is an ample supply of natural sources of energy reserves they only need to be tapped. This involves the need for state legislatures in addition to Congress to make decisions to help their individual economies by approving the access to energy reserves within their individual states. Congress in its wisdom or lack of it must help states which want to tap these sources by removing obstacles in pushing these opportunities forward.
As previously mentioned I support protecting the environment but I also support the needs of businesses and our economy. Current issues which have hindered utilizing these resources involve the process of fracking to access these reserves. Accusations about the process state they cause earthquakes and water contamination but currently there is no proof that such a connection exist. Problems have occurred in some areas of the country where the fracking process is being utilized but not in all areas. The focus needs to be placed in determining why the process is working in some areas and not in others in relation to earthquakes and water contamination.
We as a country had a goal established by a previous President to land a man on the moon by the end of a decade. The goal was not taken lightly and the resources of this nation were utilized in making the goal come to fruition. The talent and expertise of the American citizens are often not given the credit they deserve from foreign countries and time and time again we have proven we have the perseverance to stay the course. We need to do the same with the goal of energy independence.
It is true that from time to time actions are taken by Congress and signed by the President involving energy independence issues. This seems to be a topic which changes with the wind as different political parties are in power. Energy independence and the goal to achieve it should not be a political issue as has been the case in recent years. Developing an energy plan to achieve reduction in our energy dependence or elimination of our dependence on foreign sources of oil will not be easy to achieve. Any plan must identify the purpose and the path to achieve the goal or goals set forth within it. The energy resources within our boundaries are by all reports is enough to satisfy our needs for decades to come. It is without question that this country has an admirable goal of energy independence or at least a reduced dependence we only have to take the necessary action to make it come to fruition. Any plan must or should involve utilizing our currently known energy reserves and those which will be discovered in the future.
Another point to make involves the issue of subsidizing the oil companies with the profits being reported in the news. There are those who would like to take away these funds and while it may not make sense to some individuals these funds should remain intact. The basis for this perspective involves the cost of initiating access to new resources which is extremely high. The funds provide some incentive for oil companies to reduce their initial startup cost. Another aspect is the concept of return on investment with which many businesses are familiar. Accessing new resources creates jobs and the ripple effect involves more supply to affect our dependence on foreign oil. Increasing jobs provides more revenue for local, state and federal government through applicable tax revenue. This can take place through collecting taxes from paychecks or the revenue created when more individuals are working and have more money to spend.
One last point to make involves subsidies given to oil companies. The impact of discontinuing subsidies can or will affect the willingness to drill a new oil or gas well to access additional energy reserves. I am not necessarily a fan of providing subsidies to companies or individuals in general but providing funds to offset the costs of starting a new well provides an incentive for companies to take the action. Discussions are being held today to remove these subsidies but the decision must not be politically based. Proper evaluation must be considered with regards to the benefit it provides to the economy and our potential reduction on energy dependence. News reports have identified actions being taken by oil companies to help the environment and communities. Removing these subsidies could impact this activity. While there are some costs in providing subsidies considering the financial constraints we are in today, it is money well spent.
In closing some say that constructing the pipeline will have no impact on the price of gas in this country as it is not a certainty that the new supply will remain in the United States. To refute this involves the concept of the law of supply and demand. Increased supply always has the potential of lowering the cost of the product (s) involved which in this case is oil. While it may not be guaranteed the price we pay will fall doing nothing will eliminate the potential for reduced prices.
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