Pump pain, Canada's disdain
The U.S. price of a gallon of regular gasoline rose by 25 cents from the start of the year to the end of last week. Experts forecast that due to a variety of factors, the steep upward trend will persist.
But no expertise is required to grasp the grim implications of oil prices hitting a nine-month high Monday at $105.26 a barrel on the New York Mercantile Exchange.
Iran's decision to cut off oil exports to Britain and France in retaliation for their economic sanctions also could inflict supply-and-demand pain at the pump. Though the U.S. has long refused to buy oil from Iran, significant disruptions in the oil flow from the Mideast inevitably threaten higher global prices. And a steep boost in energy prices could seriously undermine the U.S. economic recovery just as it's finally picking up some steam.
So brace not just for higher gas prices but for another round of familiar energy-policy finger-pointing. President Barack Obama and most fellow Democrats will again decry big profits by Big Oil. Most Republicans, including the presidential candidates, will again decry the administration's reluctance to more fully develop U.S. domestic oil resources.
Beyond those predictable debates, however, there's no disputing that this is a bad time for Canada, which supplies more oil to the U.S. than any other nation, to be justifiably aggravated with us on the energy front.
Last month, the president, citing bogus environmental concerns, rejected a longstanding permit application for TransCanada's Keystone XL pipeline. The move caught many fellow Democrats who had backed a congressional deadline for an overdue decision on the permit by surprise. Washington Post financial columnist Robert Samuelson branded it "an act of national insanity." Many Canadians branded it an act of betrayal.
Thus, Canada is now primed to take its oil business elsewhere.
As Monday's Los Angeles Times reported, the White House's rejection of the $7 billion Keystone project, which would have transported oil from Canada's tar sands to the Gulf of Mexico, has given new impetus to the $5.5 billion Northern Gateway pipeline, which would move that crude to the British Columbia coast. From there, Canada could send it to China.
And from Canadian Prime Minister Stephen Harper came this clear message in a recent television interview: "I think what's happened around the Keystone is a wake-up call, the degree to which we are dependent or possibly held hostage to decisions in the United States, and especially decisions that may be made for very bad political reasons."
No, approving the Keystone pipeline would not have averted the current gas-price climb. But it would have enhanced this nation's long-term prospects for meeting our energy challenges.
It also would have enhanced the long-term friendship with our Canadian neighbors, who shouldn't have to send their tar-sand oil all the way to China when we need it here in the United States.
