Cancellation of Keystone Pipeline – A win for climate change or misplaced symbolism?

On Friday President Obama announced that he had rejected the request from TransCanada to build the Keystone XL oil pipeline which ultimately would have transported 800,000 barrels a day of heavy oil from the Canadian oil sands to the US Gulf Coast refineries. This ended a seven-year review that had become a contentious political issue and symbol of the debate over his climate policies. 

Response was quick, emotionally charged, and predictable. Environmentalists praised the decision and celebrated. Republicans and the oil industry, who argued that the project would create jobs and stimulate economic growth, denounced the decision. Many Democrats from oil-producing states and those states that would benefit from the construction activity, such as North Dakota, also opposed the decision.

As we have done with regard to the Clean Power Plan, OWOE prefers to focus on the technology behind the issues. Most telling is the fact that numerous State Department reviews concluded that construction of the pipeline would have little impact on whether tar sands oil would be burned, because it is already being extracted and moving to market via rail and existing pipelines. The bottom line is that a resource such as tar sand oil, which comes from the second largest oil reserve in the world, will be exploited if the price of oil is high enough. If so, and if the Keystone Pipeline isn’t available, TransCanada will get the oil to market in another fashion. The only impact of acceptance or rejection of the Keystone Pipeline is a marginal difference in transportation cost. Thus, the pipeline decision is essentially irrelevant to any climate change impact of the Canadian tar sands, and rejection was a symbolic gesture.

One can argue whether such a symbolic gesture itself is valuable in the effort to combat climate change. However, OWOE would prefer that politicians, scientists, and industry come together and  focus time and effort on a real topic that will actually have an impact. Imagine how much better off we would all be, for example, if seven years and countless hours and millions of dollars had been spent developing a carbon tax plan or a carbon cap and trade plan that would fairly value clean energy and letting the marketplace make decisions like the Keystone Pipeline.

See the NY Times or Reuters.

For more information on oil sands, see OWOE What are oil sands?


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