The United States Senate and House of Representatives have both passed bills to approve the Keystone XL pipeline project. Assuming the two houses reach agreement, a reconciled bill will soon go to President Obama. He says he will veto the legislation because he does not want to short circuit the established process for such approvals.
Disregarding the merits of the project, and putting aside that Congress effectively created the established process and can surely change it or grant exemptions as it chooses, consider how that process is working and contemplate what it means for the struggling U.S. economy.
The Keystone XL pipeline was first proposed in 2008. A permit application was filed with the National Energy Board of Canada in September of 2008 and was approved 20 months later. One month short of five years after that, the United States government is still studying whether to authorize construction of the U.S. portion of the pipeline.
Why is this taking so long? Maybe the folks working on the various studies aren’t very smart, but I doubt that. Maybe the issues are so complex that it just requires a half decade or more to really understand the project’s impacts, but I doubt that as well. Somehow the Canadians, with an admirable record of environmental protection and concern for native populations, managed to reach a decision in less than two years.
Sadly, while the Keystone project has gained an unusually high public profile, the lengthy delay from proposal to final government action is not unusual. Often unknown to the general public, countless projects in every corner of the country are needlessly delayed, if not killed, by similar regulatory gyrations. With this sort of bureaucratic and political sclerosis, there is little wonder that our economy continues to struggle despite assurances by professional economists and the president that the recession is long over?
It’s anybody’s guess how much has been spent on engineering and environmental studies, not to mention lobbying and lawyers, without any assurance that the Keystone project will go forward. But whatever those costs have been, it’s a sure thing that people thinking of investing in American infrastructure and enterprise are taking note. Government employees get paid whether or not they are producing anything of value, but not people working and investing in the private sector.
Every business person recognizes that regulatory compliance is a cost of doing business. But the higher those costs, the more likely entrepreneurs and investors will go elsewhere taking the jobs they will create with them. We can and should debate the merits of particular regulations and we will sometimes disagree about whether or not they are being properly enforced. But there should be no disagreement about the importance of prompt and decisive governmental action.
At every level of government, regulations intended to protect human health and the environment have become nightmarish mazes. At every turn project opponents find opportunities for delay, allowing elected officials to avoid making politically difficult decisions. Obama’s six-year shuffle on Keystone is emblematic of the problem.
For both sides of the debate, Keystone has acquired a symbolic import well beyond its true environmental and economic significance. Both the Environmental Protection Agency and the State Department have determined that the environmental impacts will be minimal. Climate effects, one way or the other, will be immeasurable. The national economy will be little affected whether or not the pipeline is built, though there will be clear economic benefits in the form of local construction jobs if the project does go forward. By itself, the Keystone project is probably not that big a deal.
But taken together with the multitude of other projects mired in our regulatory swamps, the Keystone saga should remind us that our regulatory process can all too easily become a tool for political maneuvering and an anchor on our economy.
There are good reasons to regulate. There is no good reason it should take six plus years to get the job done.