The Global View

Yes, energy and the economy are linked … just not how you think

The inextricable link between energy and economic growth has been painfully clear to many people since mid-2008, when crude oil prices peaked at more than $145 per barrel … followed by the global economy taking a nose-dive. (Other factors also helped to bring on the recession, of course, but there’s no denying petroleum’s role in the mess.)

Even climate-change-denying Republicans in the US House of Representatives understand the energy-economy nexus. Only not in the way the rest of us do, as Oil Price’s John Daly notes in this piece about the GOP’s proposal for extending long-term unemployment benefits and a payroll tax cut due to expire soon:

“(I)n a gesture of cynicism unusual even for Washington, the House Republicans have added to the legislation a provision to force work to begin again on the proposed 1,700-mile-long TransCanada Corp.’s $7 billion Keystone XL pipeline, which would transit up to 830,000 barrels of oil sands hydrocarbons per day from Hardisty, Alberta, to US refineries on the Gulf Coast.”

After pointing out that the pipeline — which US President Barack Obama has put on hold until at least 2013 — is unlikely to create nearly as many jobs as GOP cheerleaders claim, Daly goes on to explain:

“The ‘dirty’ secret about the Keystone XL pipeline’s oil sands hydrocarbons, which no amount of K Street PR can spin away, is that the oil has a higher carbon content than that from traditional fossil fuels, anywhere from 8 to 14 percent more, depending on which scientific report you read. Accordingly, the EU has already banned their import, much to Ottawa’s annoyance. Much to the consternation of Transcanada and the pipeline’s Republican boosters in Washington, environmental groups in such stalwart Republican states as Nebraska went up in arms over the Keystone XL proposal, fearing that a leak from the underground pipeline would irrevocably pollute the Ogallala Aquifer, source of much of the Great Plains’ agricultural water.

“Which must cause all thoughtful Americans to ask — why are Congressional Republicans lumbering the ‘Middle Class Tax Relief and Job Creation Act of 2011’ with the Keystone XL energy albatross?

“Who do they truly believe are their constituency, the millions of working and middle class Americans seeking ‘tax relief,’ or – big oil? The GOP obstructionists may get their ignored constituents’ response next November.”

You can read the rest of the article here.