Obama’s jobs council gives cautious endorsement to Keystone pipeline

President Obama’s private-sector jobs advisers appear to be lending cautious support to the Keystone XL pipeline, a controversial proposal that would bring crude from Canada’s oil sands to Gulf Coast refineries.

The carefully worded endorsement, contained in a new report by the President’s Council on Jobs and Competitiveness, could prove a major political blow to green groups battling the project in a campaign season where jobs and the economy are the dominant issues.

{mosads}The report calls for finding a way to “balance” environmental protections while realizing the benefits of the pipeline, as well as deepwater drilling and natural-gas produced through hydraulic fracturing.

The report calls for making “extraordinary efforts to strike a balance on energy investments.” It states:

Environmental and safety concerns have sparked controversy over specific energy developments, including a pipeline that would transport heavy oil from northern Alberta in Canada to Oklahoma and the Gulf Coast, the resumption of deepwater drilling in the Gulf of Mexico, and horizontal drilling and hydrofracturing of shale gas supplies. Estimates suggest that these three streams of private investment, could together support or preserve hundreds of thousands of jobs in the next few years. The Jobs Council urges all stakeholders to make extraordinary efforts to strike an intelligent balance that protects people, safety, the environment, and our nation’s water supplies, while also allowing the economic benefits of these innovations to be realized.

The State Department is leading the Obama administration’s review of TransCanada Corp.’s proposed $7 billion, 1,700-mile pipeline, and hopes to make a permitting decision by the end of the year. 

Business groups including the U.S. Chamber of Commerce and the American Petroleum Institute are lobbying in favor of the project, arguing the pipeline’s expansion of oil sands imports would create scores of jobs while improving energy security.

TransCanada claims the pipeline would create 20,000 jobs and is emphasizing that it would operate under strict safety standards.

But environmental groups, which have called the jobs estimates inflated, oppose the pipeline due to greenhouse gas emissions, forest damage and other impacts from oil sands projects, as well as the prospect of pipeline spills that could contaminate farmland and drinking water in states along the route. 

Environmentalists staged demonstrations — that included civil disobedience — against the pipeline in front of the White House over the summer that organizers say led to more than 1,200 peaceful arrests.

The jobs council report also calls for federal administrative steps to improve the process for siting power transmission lines, which are often ensnared in local and state-level disputes.

It also backs proposals for creating a new federal financing institution to support clean-energy deployment, sometimes called a “green bank,” an idea that has been kicking around Capitol Hill for several years.

It states:

Creating a new financing institution could boost and maintain annual energy investments to the $30 billion or $40 billion required for the United States to play a global leadership role. Because the federal government can uniquely leverage its resources and credit through loan guarantees and other financing tools, a new targeted, energy financing institution funded with $1 billion to $2 billion per year in appropriations could unlock on the order of $10 billion to $20 billion in financing assistance and leverage additional private sector investment, which could support United States leadership in this emerging industry and help create thousands of good- paying jobs.

—This post was updated at 11:04 a.m.