The Real Reason Why Obama Rejected the Canada-Texas Oil Pipeline

Alaska Oil Pipeline

President Obama "declared it was in the national interest" to nix a proposed oil pipeline from Canada to Texas refineries. See the article here. More specifically he

on Wednesday [January 18th] rejected plans for a massive oil pipeline through the heart of the United States, ruling there was not enough time for a fair review before a looming deadline forced on him by Republicans. 

Don't let the thought that there "was not enough time" enter your mind. Obama's decision involved a political calculation. Instead of pulling toward the center, Obama is trying to energize his liberal base, taking the side of the Occupiers in speeches, adopting a populists stance on taxes, and now, by halting the pipeline, giving a nice gift to the environmentalists.

Bill McKibben, an environmental activist who led opposition to the pipeline, praised Obama's decision to stand up to what he called a "naked political threat from Big Oil." 

The pipeline rejection is a red meat issue for conservatives. Republicans were enraged, which will delight the liberal base still further. Politically it made short-term sense for Obama to oppose the pipeline--it will help him hold onto majorities in blue states such as New York, Minnesota, and California. He doesn't care if he loses votes in Texas. Long-term, however, Obama made a poor decision. We have soured our relations with our biggest trading partner, Canada, who may decide to sell their oil to more accommodating Chinese rivals.

Canadian Prime Minister Stephen Harper has said Canada is serious about building a pipeline to its West Coast, where oil could be shipped to China and other Asian markets. Harper on Wednesday told Obama he was profoundly disappointed that Obama turned down the pipeline, Harper's office said.

See also Canada pledges to sell oil to Asia after Obama rejects keystone pipeline.

Economically, Obama's decision makes even less sense. We have to buy oil. The United States does not have enough domestic supply even if we double our conservation efforts. Should we buy oil from Canada or from Saudi Arabia? Saudi oil money supports Wahhabi Islam, an extremist and militant form of Islam, throughout the world. I think we can say that buying Saudi instead of Canadian oil works against American interests. "Canada accounts for more than 90 percent of all proven reserves outside the Organization of Petroleum Exporting Countries, according to data compiled in the BP Statistical Review of World Energy" (above link).