Free Markets, Free People

Daily Archives: January 18, 2012


Actually Republicans got exactly what they wanted with the Keystone XL pipeline decision today

And that, of course, was a “no”.   It’s still a temporary “no”, but it is  a “no” nonetheless.  What it does is place the Obama Administration in the awkward position of claiming to be all in for creating jobs while nixing a project that both sides admit will create them.

Obama had hoped to delay this decision until 2013, well after the election.

The decision today doesn’t kill the pipeline by any stretch, unless Trans Canada decides not to resubmit applications for permits that would reroute the pipeline from Nebraska’s Sand Hills.  That’s unlikely.  Word is they already have an alternative plan developed.

So what has happened today plays into the politics of the moment.  In last month’s payroll tax cut extension signed by President Obama, Republicans had included a provision that precluded the administration from delaying a decision on the pipeline.  In fact, it required a decision by Feb. 21st.

Now, apparently, the White House has complied with the law and blocked the pipeline.  This, of course, comes on the heels of the President’s Jobs Council recommending the administration go “all in” on exploiting North American oil and gas assets.  That included recommending fast approval for key pipelines, of which Keystone is among the top.

This then gives the GOP plenty of political fodder for the upcoming campaign.  It’s hard to claim to be the jobs president when you disapprove projects that would clearly provide jobs and further,  disapprove the project in the face of your own Jobs Council’s recommendation to do otherwise.   It is also rather difficult to claim to “share the goal of  expanding domestic oil and gas production” as Presidential spokesperson Jay Carney said yesterday when you’re turning down a project that could do exactly that.

And, of course, a key constituency, who has been all for the construction of the pipeline has now been thrown under the bus.  I’m talking about unions.

So, politically speaking, not a good one for the O. 

Oh, and one more thing that can be made very clear to those upset by the administration’s decision.  If you want to see the pipeline built there is a fairly easy solution. 

Make Obama a one-term president.

~McQ

Twitter: @McQandO


Economic Statistics for 18 Jan 12

Today’s economic statistical releases:

Industrial production rose by 0.4% last month, with manufacturing increasing 0.9%. Capacity utilization rose to 78.1%.

The overall Producer Price Index fell -0.1% last month, but is up 4.8% on a year-over-year basis. The Core PPI, minus food and energy—rose 0.3%, and is up 3% for the year.

The Housing Market Index rose from a depressed 21 to a slightly less depressed 25 last month.

The Mortgage Bankers Association is reporting a huge jump in mortgage applications, with purchase apps up 10.3% and re-finance apps up 26.4%, bringing the composite up 23.1% for the week.

In weekly retail sales, Redbook reports a second slow weeks of retail sales, with a year-over-year sales increase of only 2.8%. ICSC-Goldman Store Sales are also soft, with chain store sales up only 0.1% for the week, and 3% over last year.

Overall, we’re continuing to see mildly good news overall, in terms of production and housing, but retail spending and employment remains relatively weak, and inflation threats still hover over what remains a somewhat recessionary economy.

~
Dale Franks
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President’s Jobs Council: “Drill, drill, drill”

President Obama’s “Jobs Council”, formed to take the heat out of criticism that he’s not doing enough to foster job growth, has come back with an interim report that can pretty well be distilled into three words: “drill, drill, drill”:

President Obama’s jobs council called Tuesday for an “all-in approach” to energy policy that includes expanded oil-and-gas drilling as well as expediting energy projects like pipelines.

“[W]e should allow more access to oil, natural gas and coal opportunities on federal lands,” states the year-end report released Tuesday by the President’s Council on Jobs and Competitiveness.

This, of course, is directly at odds with the administration’s attempt to “green up” American by pushing alternate and renewable fuels while engaging in foot-dragging, regulation and bureaucratic red-tape to slow down and sometimes stop the search for (and use of) fossil fuels.

You can almost hear the jaws of Steven Chu and Ken Salazar falling open. So what’s a President to do?

Well first, argue that what they said isn’t what they said, of course:

White House press secretary Jay Carney insisted Tuesday that the jobs council report does not endorse the Keystone pipeline.

"Well, first of all, the Jobs Council wasn’t talking about Keystone specifically," Carney said at his daily briefing. "The Jobs Council was talking about the importance of expanding domestic oil and gas production, a goal this president shares and has expounded upon at length, and has taken action as a policy matter to demonstrate his commitment to."

Nice double-talk Jay … this President “shares” the goal of  expanding domestic oil and gas production about as much as al Qaeda shares a goal for peaceful secular coexistence with the West.

His administration talks the talk, but when you look at the action they’ve taken it is hard to find evidence of that “shared” goal.

The problem for him, however, is this Jobs Council was his idea and he certainly implied that its existence meant he’d listen to their findings.  While he and Carney can weasel-word all they wish about the Keystone Pipeline, it does mean jobs.  Just as the shale gas finds in in the Ohio and Pennsylvania area do.

But instead we see the usual suspects involved in trying to demonize fracking and stop that process with the tacit approval of the Obama administration. 

The report notes that the Obama administration has called for new lease sales and said it will consider opening up new areas to drilling. But it says “further expanding and expediting the domestic production of fossil fuels both offshore and onshore (in conjunction with more electric and natural gas vehicles) will reduce America’s reliance on foreign oil and the huge outflow of U.S. dollars this reliance entails.”

Beyond oil and gas, the report calls for policies that improve energy efficiency, encourage private investment in energy research and development and expand renewable energy.

Note two things.   One the Council tries to soften the blow to the administration by attempting to gild their record up to now – an acknowledgement that the administration has “called for new lease sales and said it will consider opening up new areas to drilling”.

But again, what actions have they taken to this point to do those two things?  Nada.  Again, all talk, no action – at least no action that conforms with what the President has supposedly called for.

And also note the council calls on policies to “encourage private investment in energy research and development and expand renewable energy”.  Why?  Because the possibility of another Solyndra would be vastly reduced.   Sound advice that will most likely go unheeded.

Republicans, as you might imagine, have seized upon this report:

House Republicans quickly pounced on the jobs council report Tuesday, noting that the recommendations echo their "all-of-the-above" energy strategy.

"The President’s Jobs Council today confirmed what House Republicans have known all along, that American energy production will spur job creation and strengthen our national security," House Natural Resources Committee Chairman Doc Hastings (R-Wash.) said in a statement. "Unfortunately, it appears President Obama is ignoring his Council’s recommendations, much as he has ignored the views of House Republicans on energy production, economic growth and job creation."

More broadly, the jobs report calls for expanded oil-and-gas drilling, as well as “safe and responsible” natural-gas extraction from shale formations.

So?  So this is going to be a tough one for Obama to ignore, especially as his election campaign gears up.  He’s voted present on Keystone by delaying a decision until after the election.  But events keep going to spite him – PM Harper of Canada,  tired of the delays and nonsense surrounding the pipeline is now wooing China and Obama’s own Jobs Council has now pointed to the common sense solution to creating thousands of jobs – get the government to hell out of the way.

Problem?  The man just isn’t wired that way.  Government is the solution in his world – never the problem, despite mounting evidence to the contrary.

Let’s see how he handles this.  If Carney’s statements are any indication, China will be shipping Canada’s oil sands production west in the next few years unless we manage to get this man back to Chicago in January of next year where he belongs.

~McQ

Twitter: @McQandO