We are the only country in the developed world without an energy policy. Because of this, things like the Keystone pipeline on the Great Plains get put on the back burner.
Continue Reading Below
Every president since the 1980s has said he will get us off of Middle East oil, and none has succeeded. Our administration and congress are now making our country more dependent on Middle East oil -- through a lack of drilling permits and the lack of courage to make a decision on this pipeline.
We currently import just under 50% of our oil for domestic use. That is down from approximately 60% but is aided by a decrease in demand and an increase in ethanol -- not long-term structural changes.
China is buying up world oil supplies while we sit back and watch. The Canadian oil sands can be shipping 700,000 barrels a day to the refineries in the Gulf, by way of the proposed Keystone pipeline, or they could be sending it to China. My belief is that we are better served buying oil from our neighbor and controlling that oil by controlling the distribution.
When the pipeline was being built to take oil from the Caspian Sea region for worldwide distribution, the US didn’t want the pipeline going through Russian territory because it was believed that Russia would be able to control that flow if they so desired.
Why is this oil so close to home not as important as the oil in the former Soviet states? Without a pipeline through the US this oil will to go the west coast of Canada and end up elsewhere, most likely China.
Continue Reading Below
If this oil goes across our country to our refineries, we essentially control it. I would take all the oil Canada and Mexico both have as a long-term strategy, until we can free ourselves from all imported oil. Oil prices may be tied to disruptions in Africa or the Middle East, but our oil supply would not be disrupted in an event in one of these places if we got it from places closer to home, especially from our own untapped reserves.
We import about 10 million barrels a day of oil. With this pipeline we can cut our imports (from outside North America) sharply.
The environmental impact is the holdback, the potential for an oil spill over the Ogallala aquifer in Nebraska is the main reason for the protest. However, the pipeline could skirt the aquifer and eliminate this objection.
This pipeline would create 20,000 jobs, the shovel ready jobs that have been touted but so far haven’t been created. And, these jobs would be created by private enterprise. The project will also keep $21 billion in North America in oil not bought from the Middle East or Africa.
I have argued here often for an “all of the above” strategy, and this is part of that strategy. We can create jobs and we can use oil not from the Middle East, but it takes courage to quit blocking this pipeline in the belief that somehow it will disappear or go to another administration to approve it.
John Layfield, formerly known as JBL, was the longest reigning WWE Champion in Smackdown television history, retiring after 17 years of pro wrestling. John, a former collegiate All-American and pro football player, is a lifelong entrepreneur who has worked as an investment banker, is series 7 and 24 qualified, and is currently an active private investor. His Internet radio show can be heard at www.JohnLayfieldShow.com.