Government Regulation of the Oil Industry: Keystone Pipeline

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Government Regulation of the Oil Industry: Keystone Pipeline
The Keystone Pipeline has been in news for several months and has been the subject of scrutiny, political bantering and environmentalist activism. Keystone Pipeline is a transcontinental synthetic oil project that runs from Canada to the Gulf Coast. Construction of such a pipeline bears many risk associated with ecosystem disruption and environmental hazards. President Obama blocked the pipeline’s extension noting several studies that the pipeline would have adverse impact on air and water supplies. Its original route crosses the Sandhills in Nebraska, the large wetland ecosystem, and the Ogallala Aquifer, one of the largest reserves of fresh water in the world. The Ogallala Aquifer spans eight states, provides drinking water for two million people, and supports $20 billion in agriculture. A major leak could ruin drinking water and devastate the mid-western U.S. economy. (Source: WikiPedia) Almost by default, the opposition party rebutted the president’s decision claiming he was a killer of jobs. Studies completed for Keystone has demonstrated that approximately 2,000 employees would be needed to complete the pipeline and about 25% of that would be permanent employment. In my view the potential environmental cost outweigh the economic ones in this situation. Keystone supporters purport the necessity in its construction to curb our dependence on foreign imports for energy. The cost to extra the sand, refine it to a now synthetic oil, transport it across country by far produces more energy than will actually be used in its life cycle. Government regulation, in this instance, has proven mildly effective. Given that we are now in an election season, this “job destroying vote” may come back to bite.