Keystone Pipeline: Facts and Fictions

03/22/2012 02:47 pm ET | Updated May 22, 2012

The Keystone XL Pipeline shows little sign of going away. Despite the Obama administration's decision to reject the first proposal, it is widely expected that TransCanada will submit a revised plan in the coming months. And in the meantime, the pipeline continues to attract powerful backers and opponents. Former President Bush has called it a "no-brainer" and Joe Nocera has written two columns defending the pipeline in the New York Times (column 1; column 2). Many have argued as vociferously against the pipeline, including environmentalist Bill McKibben (founder of and a group of Nobel Peace Prize winners including the Dalai Lama.

I have already written that I agree with the pipeline's opponents. Given that pipelines are like marriages, I do not believe this is a good soul mate for America when the long-term implications are considered. But since we can expect these issues to be discussed repeatedly in coming months, it is worth taking the time to separate fact from fiction.

Fact: Stopping the Keystone Pipeline will not prevent global warming

Though the Keystone Pipeline is capable of transporting large quantities of oil -- up to 590,000 barrels per day -- and tar sand oil is more polluting than conventional crude, this pipeline is not the climate end game. The maximum capacity of the pipeline is only 3 percent of current U.S. consumption (roughly 19 million barrels per day) and 0.7 percent of global consumption (roughly 85 million barrels per day). This has a major carbon footprint but is only one among many of the climate challenges we face. In order to address climate change, we will need a wide-ranging response that addresses issues far beyond the Keystone Pipeline.

Fiction: America needs this oil

Americans waste a huge amount of oil. It has recently been estimated that 350 million barrels of oil (nearly a million barrels of oil a day -- a greater amount than the capacity of the Keystone Pipeline) is wasted on food that is thrown out (the oil is used in fertilizers, tractors, long-haul trucks, and by consumers to drive to grocery stores). American drivers waste an estimated 1.9 billion gallons of fuel (roughly equivalent to 45 million barrels of oil) in congested traffic every year. Simply making sure that all tires were properly inflated could save 1.2 billion gallons of fuel per year, another 28 million barrels. Efficiency improvements like better insulation and hybrid vehicles could achieve further savings while putting money back in people's pockets. We do not need more barrels of oil; we need to patch the leaks in the barrels we are using.

Fact: We can weaken OPEC by reducing consumption

One of the frequent defenses of the Keystone Pipeline is that it will prevent American dollars from flowing to the Middle East. The problem with this view is that oil is a fungible commodity. If the United States shifts its fuel mix to absorb less oil from OPEC and more from Canada, the extra oil from OPEC will be absorbed by international markets. OPEC nations will still continue to profit. As basic economics tells us, lowering consumption lowers the demand curve, thereby acting to decrease the market price of oil. This means that all OPEC nations will receive a lower price for their oil regardless of where it is purchased, arguably a better outcome for American foreign policy than simply shifting the fuel mix.

Fiction: Tar sand oil is not significantly worse for climate change than conventional oil

Some pipeline advocates are citing a recent IHS-CERA study that argues tar sand oil produces only 6 percent more carbon than conventional crude. This is an overly optimistic estimate from an industry-affiliated group that is not consistent with other findings. Tar sands must be mined with giant trucks and then heat is applied in order to separate the bitumen from the sands, thereby increasing the carbon footprint. A more reasonable estimate of 20-25% is found in a detailed analysis by Stanford Assistant Professor Adam Brandt. Moreover, a recent report notes that the overall impact may even be significantly worse than previously thought because tar sand companies are replacing boggy peat lands that absorb large amounts of carbon with dry forests when they are finished mining. We do not have determinative data yet to calculate the exact difference between tar sand oil and conventional crude, but there is little doubt that it is much higher than 6 percent.

Fact: We cannot prevent climate change if we cannot say no to projects like the Keystone Pipeline

Proponents of the Keystone Pipeline are correct to note that stopping its construction will not halt global warming. And the project does offer some virtues including job creation and increased energy security. But an inversion of this statement is also true. If we cannot agree to say no to projects that will entrench the use of fossil fuel energy -- even if they offer some short-term benefits -- we cannot hope to prevent global warming. Stopping the Keystone Pipeline, therefore, is important because it signals a willingness to make difficult decisions in the present that will have significant benefits in the future.

At the end of the day, we do not want more oil for its own sake -- we want it for the things it does for us. American consumers want convenient personal transport and warm homes, not oil. Politicians want to achieve energy security and less dependence on hostile governments. These goals can be achieved with less oil, and at less cost, through conservation. Rather than building the Keystone Pipeline, we will be better served by trimming the fat from our current energy system.