On Jan. 18, 2012, President Obama notified Canada’s Prime Minister Stephen Harper that he was rejecting the Keystone Pipeline. While he did say that he was not closing the door on the project, political hay has nevertheless been made by his opposition because the rejection of the pipeline means thousands of lost jobs for Americans.

Trans Canada contends that Keystone XL could yield 20,000 new jobs, 7,000 of those in manufacturing. No doubt many of those would be in the manufacture of valves and related materials, definitely a boon to the valve industry in the Americas. In the past, Trans Canada has also cited a 2010 study that found the project would have supported nearly 99,000 induced and indirect jobs, but in September 2011, one of the unions supporting the project predicted that, over four years, Keystone XL would create nearly three times the direct and indirect jobs that TransCanada claims.

In an economy where good manufacturing jobs are hard to come by, the decision to squash the pipeline does seem to be counterproductive to the stated goal of jobs creation.

However, a week later, in his State of the Union address, the President laid out what he is calling a “Blueprint for an America Built to Last,” encouraging companies to create manufacturing jobs in the United States while removing deductions for shipping jobs overseas and encouraging insourcing. He is offering a domestic production incentive for manufacturers who create jobs in the U.S. and doubling the deduction for advanced manufacturing. He is proposing to reform the current deduction for domestic production by more narrowly focusing it on manufacturing activities—for example, it would no longer cover oil production.

In that address, Obama indicated there would no longer be incentives to oil companies, but he did say the administration would take every possible action to safely develop the energy from natural gas, production of which could support more than 600,000 jobs by the end of the decade. In this instance, of course, many of those jobs would be in the manufacture and distribution of valves and related materials.

So the government giveth and the government taketh away. Hydraulic fracturing and production of unconventional natural gas requires the use of up to 2,000 valves for each wellhead, so the President’s statement that he would encourage responsible natural gas production is good news for manufacturers, but pipelines also utilize hundreds of valves, and at least for now, the Keystone Pipeline will not be using any. Tax breaks were announced that give U.S. valve manufacturers even more incentive to bring their production back onshore, but if oil companies would no longer receive subsidies and incentives, will there be repercussions to the industry?

With mixed messages coming from the White House, it is more important than ever to be vigilant. A lengthier report on how the 2012 State of the Union address impacts the valve industry will be the Web Feature on the ValveMagazine.com website later this week. Share your news and opinions on this and any other stories you feel should be covered by responding to this blog or sending an e-mail to kkunkel@vma.org.