The Keystone Pipeline Is Not About Oil—It’s About Milk

The Keystone Pipeline Is Not About Oil—It’s About Milk

The ceaseless debate over the Keystone XL pipeline has nothing to do with affordable energy and everything to do with enriching the political class.

On Tuesday evening, the U.S. Senate finished the latest performance in one of its oldest pastimes: political theater. Facing a December runoff that she is widely predicted to lose, Louisiana Sen. Mary Landrieu attempted to, er, re-energize her campaign by spearheading Senate passage of a bill approving the Keystone XL pipeline.

Yet despite passing easily in the House earlier this month, the Keystone bill fell just short of the 60 votes necessary for Senate passage. While that made for some high drama, two facts made the final vote a bit of an anti-climax: Even if Landrieu had produced the necessary 60 votes, President Obama would likely have carried through on threats to veto the bill; and come January, a new Republican Senate should be able to pass the measure regardless.

If all of this seems somehow drearily familiar, there’s a reason for that. Like the plot of a cliffhanger-laden soap opera, approval of the Keystone pipeline has repeatedly appeared imminent, only to be pushed off to some later date. Keystone looked headed for State Department approval in 2010, when the Environmental Protection Agency raised objections over environmental concerns. In 2011, the hold-up was the route through Nebraska. TransCanada ultimately proposed a different route, and Congress passed legislation requiring the Obama administration to rule on Keystone within 60 days. Still, in January of 2012 Obama rejected TransCanada’s application, saying that the matter required more study. Subsequent reviews undercut concerns that Keystone would have significant environmental harms. Nevertheless, in April of 2014, the State Department announced that it was again delaying a decision on Keystone.

Keystone is overwhelmingly popular. The State Department estimates that the project would create 42,000 jobs and contribute roughly $3.4 billion to the U.S. economy. Because pipelines are safer and less-emissions intensive than other forms of oil transport, the State Department has also concluded that the project will have minimal environmental impacts. Given all this, the continued inability of the federal government to resolve this issue after years of deliberation may seem mystifying. Particularly noteworthy has been the Hamlet-like pose the administration has adopted, never quite coming out explicitly against the project, but never willing to approve it, either.

Keystone Politics: A Renewable Resource

What’s going on? In my view, the key to understand the politics of Keystone is that the controversy is fundamentally not about oil, but about milk. In his recent book, “Extortion: How Politicians Extract Your Money, Buy Votes, and Line Their Own Pockets,” Peter Schweizer describes what he calls a “milker bill”:

Politicians from some parts of the country refer to ‘milker bills,’ which are intended to ‘milk’ companies and individuals to pass or stop legislation that will benefit or hurt them… [P]oliticians often don’t want these bills to pass because if they do, the opportunity for future extortion is removed. A good milker bill can be introduced repeatedly, milking donors year after year.

Keystone is what you might call a “milker executive action.” In fact, when it comes to Democrats, the Keystone pipeline is what Schweizer describes as the coveted “double-milker,” which “is designed to play two deep-pocketed industries against each other, setting off a lucrative arms race.”

In this case, Keystone pits two traditionally Democratic allies each other. In one corner are well-heeled environmentalists, who have spent big fighting Keystone in the court of public opinion. In the other corner is organized labor, which largely favors approval as a source of jobs, and even some energy companies (which have contributed to Landrieu’s campaign). Any final decision on Keystone would risk alienating a key Democratic constituent (and would threaten to cut off the pipeline of campaign donations). By keeping the issue in everlasting limbo, however, Democrats can continually use the prospect of Keystone approval as a renewable resource both financially and electorally. 

The political dynamics surrounding Keystone may shift somewhat next year when the new Congress comes to Washington. Keystone opponents, however, will probably urge vetoes or even lawsuits to keep the project from going forward. So we may have to wait a few more seasons still before the great Keystone saga is finally resolved.

Josiah Neeley is senior fellow and Texas director for the R Street Institute.
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