The Keystone block: All the risk, no reward.

It’s a shame that Newt Gingrich, Rick Santorum, et. al. spent so much time mimicking Democrats in demonizing Mitt Romney for being rich because if nothing else it takes their eye off the ball — defeating a quite weak President Obama by focusing their energies on his truly poor economic decisions. I realize that there needs to be some weeding out of candidate positions and that before they can run on Obama they must run on their immediate competition, but every minute spent off of Obama’s economy is a minute for which Obama is grateful.

Case in point: the recent decision by the Obama Administration to block (semantics aside, let’s call it what it is) to Canadian Keystone pipeline.

The decision is disastrously bad for a number of reasons, which will be highlighted, but even more striking is that they go against the very advice of his own economic and energy advisers and cabinet members. For example, here’s Energy Secretary Steven Chu:

“Having Canada as a supplier of our oil is much more comforting than having other countries supply our oil.”

Wow. No brainer, right? I mean how much grief do Democrats supply in every election cycle about the amount of oil we import from the Middle East. It is, they always tell us — albeit inaccurately and without factual merit — the reason for The Gulf War and 2004 invasion of Iraq. So, if that be the case, why not at least choose to get a larger proportion from our friends?

Of course, here’s the thing. Oil is fungible. It’s a commodity that can be bought and resold 100 times over before it reaches the American consumer. And whether or not an American president chooses to partner with Canadians determined to drill their own territory won’t change that fact. Thus the inevitable — Canadian Prime Minister Stephen Harper has said, fine, if you don’t want to partner with our pipeline than perhaps the Chinese will be interested.

You could say that with that decision, to borrow a quote from our current first lady, I’ve never been more proud of the Canadians. I don’t blame them. They’ve got a resource to sell. If we don’t want it, others do. And here’s the great irony. Not only will we be potentially buying Chinese oil then, but should the production price become cheaper than what some of our “enemy” countries can do, they may be prone to buy the Canadian-Chinese oil and turn around and sell back to the US too. That’s how commodities work.

But it gets even better. First, as historian Victor Davis Hanson labels it, and I do love this, it is “the antithesis of Solyndra.” The Chinese, and not Americans, get an estimated 10-20 thousand production jobs.

Here’s the most ironic and comical angle though — Obama’s decision is at best a zero-sum protection for the environment, and more than likely even worse for the environment. Like the Canadian PM said — they’re drilling, baby, whether we like it or not. The impact to the environment is therefore moot. It’s analogous to drilling in the Gulf of Mexico — whether we do or not the Cubans, Chinese, Venezuelans and others will. By taking part you can at least take the lead in doing it as cleanly as possible whereas if you forgo doing so you give no reason for another country to follow suit with improving standards and technology. And if an oil spill can occur in Canada (or the Gulf) from American mishap, the chances are even greater so when it’s China doing the work, or Cuba doing the Gulf drilling.

Here’s Hanson again:

If the Keystone project raises environmental issues, then every other comparable one would too. It is not as if the route bisects Yosemite on its way to Big Sur. How strange — we assume that the Saudis or the Turks can build pipelines across their own lands without environmental problems, but that we, the apparently less technologically advanced, cannot. We hear that oil is “fungible”; if so, each barrel that we pass on, someone else less green won’t.

With that decision — or rather lack thereof — we abrogate our leadership position and lose all influence to pressure these other countries into stricter standards. We accept all of the risk, with zero of the benefit. Bravo Obama!