I was on Fox Business Tuesday night discussing Transcanada’s proposed Keystone XL pipeline which was proposed in 2008 as a1,600 mile extension of an existing network. Its purpose would be to tap into oil supply currently being extracted from Alberta’s controversial tar sands and ship it south to the storage facility at Cushing, OK and again to the Gulf Coast for distribution. Because it enters the US from a foreign country, in order for the project to proceed, the White House must first approve its construction. As such the Department of State must deem it in the national interest. A cursory Environmental Impact Statement (EIS) has met DOS satisfaction so a potentially favorable ruling for Transcanada could be imminent.
The prospect of an Obama White House approving the Keystone XL is drawing heated protests from left-wing environmental groups who would see its green light as a betrayal by an administration they counted on being more eco-friendly. Ostensibly their concerns are the potential hazards of a spill somewhere along the massive trunk line. They point to last summer’s 800,000 gallon spillage in Kalamazoo, MI as an illustration of the risks. But really the issue is about a broader opposition to the tar sands extraction itself and the process’ rather large carbon imprint that results. There is little debate that the planet is warming, but rather how much/little human activity plays a role. But even if, for sake or argument, it was proven that human activity was having some effect, the greater debate remains: what to do about it. If so where and how?
Any new policy shifts that will have a significant impact on economic activity/viability need to be made only after exhaustive cost/benefit analysis. When it comes to climate change, the burning question is how much should we alter (read: restrict) economic activity now to head off possible issues relating to carbon emissions down the road? What price are we in the USA willing to pay for clean air and water? And how aggressive should we be if we inevitably find ourselves acting in a unilateral fashion vis-a-vis the developing world that has chosen economic growth over protecting its environment? The same questions pertain to the Keystone extension.
I could understand and respect the protesters’ concerns more if the issue was a proposed strip mining excavation within our borders in say Utah where our own tar sands reside. The process of extracting heavy crude oil from the sands is messy and inefficient. For example two tons of sands will yield a barrel of crude and it takes two gallons of water to extract a gallon of oil. The greenhouse emissions from the entire process from mining to burning the refined fuels in one’s tank is anywhere from 5% to 20% more than traditional drilling methods.
On the flip side Canada’s fields are vast. EIA estimates reserves at 178 billion barrels but Shell Canada estimates it to be as high as 2 trillion bbls…eight times Saudi Arabia’s proven reserves. The Keystone XL if built will transport 500,000 bbls/day. Oil we very much need access to if we are serious about weaning ourselves from Arab oil. Given such economic pros versus environmental cons we can and should have a substantive and rational discussion about whether it is wise to tap into our own vast oil tar sands reserves. But, alas, the most vocal in this climate change debate seem to be the proponents of either manic hyperbole or stubborn denial.
In the case of the Canadian product, I think the economic and national security benefits of permitting Transcanada to lay their Keystone extension to tap into Canada’s huge oil reservoir outweigh the potential risks of environmental impact. In this case, I believe the protesters of the new pipeline are being ideologically rigid, economically foolish, hypocritical and disingenuous. They are also taking a stand that is detrimental to national security.
First of all, the tar sands in question do not rest in the USA so even if the pipeline is not approved, the fields will still be mined, oil will still be extracted from the slurry and the end product will still be pumped in trunk lines over hundreds of miles of North America, ultimately to be shipped in dangerous oil tankers destined for more than eager buyers in Asia. To resist the pipeline in the name of eco-friendship is irrational. The Canadians will develop this product and sell it with or without us as trading partners. So 500k of bbl/day of oil will be lost to us from a stable and friendly supplier, right on our peaceful border.
So what is going on here? Is the issue for the environmentalists the inherent dangers in the operation of this 1,600 miles of new trunk lines? There are over 2.3 million miles of lines in the US network that transport hazardous materials including natural gas and crude oil every minute of every day. Why protest this one? When placed up against such numbers, their trunk line concerns ring hollow. The clarion calls of “We don’t want your dirty oil” is really what they are all about. They simply are opposed to tar sands on principle. This is self-defeating and a bit irrational. The oil is already there, it will not go away, so we best take it before one of our competitors jumps on the offer.
I view it this way. As of this writing we still have no power in my neighborhood due to Irene’s pop-in visit. Some of us have generators, others don’t. To not take Canada’s offer is tantamount to someone turning down my offer of an extension chord from my generator to their house because he opposes the carbon imprint of my gasoline-powered internal combustion engine that drives my generator. It matters little to me of course. I’ll just offer it to the guy in the next house over while you wait for the advent of solar powered generators that may or may not be developed in the next decade or so. It doesn’t help you now though…nor does it compel me to shut down my generator so the carbon foot print remains. But such is ideological rigidity when it trumps common sense.
The USA currently imports 50% of its oil. Fortunately much comes from friendly nations on our border like Canada and Mexico. But nearly 20% comes from OPEC nations. If the OPEC nations are not openly hostile, they are either unstable or certainly no friends of ours like Canada. The history of many wars in the 20th century is that of a quest for resources…Russia and Africa had it, Germany needed it. Indochina had it, Japan needed it. And it serves as a stark lesson to us that those two nations were eventually brought to their knees as much by the cutting off of their raw materials–energy especially–as by combat in the field. The extent to which a nation cedes control of its own energy infrastructure to a foreign source is directly correlated to its vulnerability. Therefore, the more energy we provide domestically, the more secure we will be. And the less need for costly and endless wars that make us many enemies and few if any friends.
Today where the USA is concerned, the unstable Middle East has much of the oil we need. Hence our endless adventures in this region and the cost in lives and treasure and international good will as a result. (Honestly, what makes an Iraqi’s life more valuable to us than a Sudanese’s?). The upside of a peace dividend windfall from no longer maintaining a military presence in a region whose resources we no longer need defend and secure is self-evident. Such a windfall could even be steered towards green technology R&D if we so choose it. Ironically I’ll wager that same self-righteous crew out on the streets protesting domestic energy initiatives will also be the first to scream “No Blood For Oil!” when we’re compelled to enter into yet another Mideast conflict to protect our energy and economy. You cannot have it both ways…not today at least.
There are two congruent paths that our national energy policy must follow. Short term: take advantage of resources on this continent in the form of sands, shale, coal, natural gas and biomass to wean us at least off those 4mm/bbl every day we import from OPEC. Long term: create a healthy economic environment free of draconian regulations that lowers barrier to entry and will lay the proper foundations of profit incentives to be had in green technology. China (who will gladly take the 500k barrels off Canada’s hands if the White House passes) burns a lot of oil for today’s economy; they are also the global leaders in developing solar and wind power for the future hydrocarbon free world we all want. Why is it that we cannot do both as well?