Piping up against Keystone XL

For several months, a fierce debate has raged over the Keystone XL pipeline, the proposed 1,661 mile TransCanada project that will carry Canadian tar sands from Alberta to the Gulf of Mexico. Strong and influential voices have emerged on both sides — the project website features several sources of support, including USA Today and the American Petroleum Institute, all of which carry some version of the job creation/energy security argument. The Wall Street Journal (PDF) goes so far as to say, “If Mr. Obama were drawing up a plan from scratch to boost union employment and deflate Iranian-ally Hugo Chavez of Venezuela, it might look like the Keystone XL.” (If Canadian oil is truly the key to “deflating” Iranian allies, it is even more surprising that Romney’s all-star foreign policy team lacks an energy expert.)

Last week, I attended a screening of Pipe Dreams, a documentary film that attempts to examine the impact of the project on the landowners who will be directly affected, especially those dependent on the Ogallala Aquifer, which the pipeline would cross. The documentary is refreshing in that it does not sound like Greenpeace-style railing against the project — it suggests that a rethinking of the proposed path of the pipeline would significantly reduce its impact on the aquifer, an important source of freshwater in the region. It digs into (and finds lacking) TransCanada’s claim of a strong track record in pipeline safety. It also zooms out to the fundamental issue that many have with the project — it represents a continuation of U.S. dependence on “dirty oil.”

Several experts have argued that the pipeline, as well as the oil sands themselves, are “neither a climate catastrophe nor an energy security bonanza,” especially when one considers the very real possibility that the oil will be shipped overseas and will not benefit U.S. consumers. Thirty-six House Democrats have asked (PDF) Secretary Clinton for assurance that the 830,000 barrels would be sold in the U.S. As Ed Dolan at The Hill points out,

… because of the global nature of the oil market, the security benefits of the pipeline are illusory … Could we expect Canadians to sell us their oil at a discount just because they are our neighbors? Hardly. Would a pipeline from Canada stop higher oil prices from enriching unfriendly regimes? Not at all. At best, a pipeline from Canada might reduce the temporary logistical costs of a supply disruption, but we already have the national oil reserve to protect against those short-run effects.

Forbes, however, argues that, even without the U.S.’s participation, the oil sands will still be developed, probably by China. Therefore, it is in the U.S.’s interest to capture the jobs that will be created. Anyone under the illusion that Keystone XL precludes Chinese investment in the Canadian oil sands needs to read this, and this, and this. The 2,500-4,650 jobs that form the core of the arguments by pipeline supporters are unlikely to last longer than two years and are temporary solutions to a deep-seated structural problem. The NRDC noted yesterday that the U.S. can create as many as 1.9 million more jobs with a comprehensive energy policy. It notes,

In the end, once Keystone XL’s impact on US oil markets (PDF) are factored in, the pipeline may actually destroy more jobs than it creates. TransCanada itself has admitted that Keystone XL would increase the amount refiners in the United States pay for their crude by up to $4 billion a year. That’s $4 billion a year that is currently being used by U.S. industry and consumers to create economic growth.

The Department of State is expected to announce its verdict by the end of the year. Ultimately, for a project that will neither create many sustainable (no pun intended) jobs nor be in the interest of national security, the administration will likely expend a fair amount of political capital if it does go ahead and approve it. This is a rare case in which Congressional approval is not needed, so a decision by the administration will carry both direct and symbolic weight.