The Wall Street Journal's editorial Friday on President Obama's decision to delay the Keystone XL pipeline contains bad data and omits pertinent information that hurts its argument.
Since policy decisions need to be based on facts and not rhetoric to be successful, let's go through these one by one.
1) The Journal says building the pipeline would create 20,000 jobs. My article on the controversy in this week's issue of Bloomberg Businessweek notes TransCanada CEO Russ Girling's use of this figure in his conference call with investors on November 1.
But TransCanada's own data supplied to the State Department says 2,500-4,650 jobs would be created.
I've closely followed the Keystone XL debate for months, and one thing I noticed was that supporters' figures on job creation rose as objection to the pipeline intensified. At one point the number 200,000 was bandied about; it was supposed to include the indirect job-creating effects of the pipeline over 100 years -- even though its intended lifespan is only 50 years -- and came from a study TransCanada commissioned.
An indirect effect on jobs the pipeline would have, which the Journal omits, is a rise in gas prices with job-killing results. Girling told me on the conference call, "If you bring more supply into a marketplace, all other things being equal, the only direction prices can go is down. Obviously if we supply another million barrels a day of oil to the United States, we'll see prices go down."
However, the difference in the prices of two types of oil traded, West Texas Intermediate and North Sea Brent, is currently at or near a record high. It's because of the tremendous recent increase in the amount of oil produced in Canada and North Dakota. With the current transport infrastructure, that oil can't get out of the Midwest; there's a glut of it stuck at storage depots in Cushing OK, which is depressing the price of WTI relative to Brent.
That's exactly why TransCanada wants to build Keystone XL: to provide an artery for that oil to move south from Cushing to refineries in Texas, which can handle the type of crude produced in Alberta.
The result will be an end to the over-supply in the Midwest, which will raise prices in the primary region now supplied by Cushing.
TransCanada itself told Canada's National Energy Board just that: The cost of heavy crude in the Midwest will increase, it said, as a result of the narrowing of the WTI-Brent spread, by as much as $2 to $4 billion annually for a period of several years.
The Cornell Global Labor Institute estimates [pdf] a 10-to-20 cent per gallon increase in the price of gas as a result. "These additional costs," it says, "will suppress other spending and will therefore cost jobs." (TransCanada disputes the accuracy of Cornell's report.)
2) The Journal writes, "[The Dept. of] State produced multivolume environmental impact statements that concluded the pipeline would have 'no significant impacts' on the environment. That should have ended the matter."
Funny how editorial writers usually so quick to lambast big government as ineffective suddenly take its word as gold when it makes decisions they agree with. Contrary to the Journal's unquestioning acceptance of the EIS's, during State's environmental review of Keystone XL it became clear that just because an environmental impact statement is performed doesn't mean the impact on the environment has been assessed.
CEO Girling said on the conference call, in response to a question I posed, that the pipeline was subject to "by far the most exhaustive and detailed analysis ever conducted of a crude oil pipeline in the United States," and supporters like to say that the length of the process -- three years -- indicated how thorough State had been.
In fact, the opposite is true: The reason it took so long is that State kept messing it up. The EPA, which for obvious reasons has considerably more experience in conducting and assessing environmental reviews than does the State Dept., gave the first EIS its lowest possible rating, and the second review received just one grade up from that -- twice forcing State back to the drawing board.
When I asked him about the third, "final" EIS, released in August, Bill McKibben, the founder of the climate-change group 350.org and scholar-in-residence at Middlebury College who's been a leading voice of opposition to the pipeline, said, "I've graded enough blue books to know when people are avoiding the main question." The EIS, he said, was a "masterpiece of environmental obfuscation" that didn't even address the pipeline's potential effects on greenhouse gas emissions, as the EPA had instructed it to.
3) "Politicians [who opposed the project's route through Nebraska] seem to have no problem with some 25,000 miles of pipeline that already crisscross the Ogallala aquifer [which underlies much of the state]," writes the Journal.
That might have to do with the fact that only one of them carries tar-sands oil and the benzene that the increasingly-common form of it usually contains (benzene spreads after oil stops moving), as Keystone XL would have, and none go through the most ecologically-sensitive part of the Ogallala -- Nebraska's Sandhills, where the pipe would have been sitting in the aquifer, exposing residents to benzene exposure in the event of a spill, according to two University of Nebraska scientists I spoke to.
Moreover, Nebraska politicians, just like politicians and policy makers everywhere, know that it's much harder to stop something through policy before it starts than to undo a policy once enacted. Ethanol and oil-exploration subsidies are two examples. Another is the tax-free status of Internet retailing.
And most importantly, saying we shouldn't oppose something now because we didn't oppose it before is a recipe for moral calcification. I wonder if the Journal's editorial writers would take this attitude toward slavery, or female suffrage, or many of the other issues on which the better angels of our nature have triumphed over time?
3) So that I can't be accused of doing what I describe the Journal as doing, I will point out that there is probably some truth to its implication that alternative methods of getting the oil Keystone XL would have carried to market may have higher greenhouse gas emissions than pipeline transport. (That was the finding of a credible report I read in the course of my research for Bloomberg Businessweek.)
But it may not matter. The unlikely coalition of ranchers and greens, Nebraska and Hollywood, has considerably raised the profile of tar-sands production, which is environmentally destructive locally and has higher greenhouse gas emissions than conventional oil. Opposition to increased transport in Montana (which borders Alberta) is considerable, and local and regional aboriginal populations in Canada have shown strong opposition to oil-sands development and transport through areas over which they enjoy sovereignty.
Environmentalists on the left and property-rights advocates on the right scored a major victory with Pres. Obama's decision Thursday. (Greens, who've been increasingly isolated politically, could learn a lesson from the experience and try to form more, similar coalitions, emphasizing that environmentalism is conservative.) The goal in opposing KXL, McKibben told me, was "to keep as much carbon in the ground as we can." The Sierra Club has had some success along these lines: Its "Beyond Coal" campaign pressured the EPA to effectively halt licensing of new coal plants, and helped convince large utilities, such as Los Angeles's Department of Water and Power, to switch from coal to power sources that emit less (or zero) carbon dioxide.
It might work. Jackie Forrest, oil-sands analyst at energy consulting firm IHS-CERA whom I interviewed for my piece, said that "if oil sands doesn't get a new market outlet by 2015, it's going to saturate the markets it can get into. So we will see production growth stall."
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The lower price of WTI is caused by the glut at Cushing, industry was going to do something. Bam! There's Enbridge doing just that. Bitumen is priced less than oil by the way, why do think Texas refiners want it?
A couple of things, if you read the MSDS(chemical breakdowns for worker who work with) crude oil and dilute bitumen they are strikingly similar, the main difference is that crude already contains many of the same chemicals as the dilutant used with bitumen.
The EIS is interesting EPA has had full consultation with State during the process why then would they allow a deficient EIS to move forward?
The oil sands is less destructive than advertised by its opponents more and more the truth will come out.
Poof. There went the "tarsands oil will be more expensive" argument.
this is an all around lose for America, with only a temp bump in employment
'Also, in terms of absolute level, if one compares CO2 emissions from oil sands operations to those of coal fired power plants, the coal fired power plants seem to be a much bigger problem. If Alberta's oil sands emissions were doubled (as might possibly occur by 2025), they still would be less than the coal fired electricity emissions of many US states.'
I've read the Wall Street Journal opinions because it is available where I work. I find their opinions to be wildly biased, inaccurate and misleading.
It's like watching Fox News.
I wonder why...?
Both the soil and the plant biological diversity sequester the gases. Once the soil is disturbed, the sequestered C02 and methane will be released back into the atmosphere. Next, a double whammy when the native vegetation is sliced away. Plants, and especially trees, sequester heat trapping gases as well. Each tree stores many pounds of the gases in their living bodies. Upon deforestation for the construction of the pipeline, the plants' sequestered gases will be released back into the atmosphere as well.
I can't imagine the disasters then next 3 generations are going to witness in their time
All major oil companies have been earning record profits for the last 7 years while at the very same time exporting American jobs overseas and enjoying lovely bonuses for high level execs and tax subsidies.
The major arguement for big oil profit is that it creates jobs. BS !! These men and women ALREADY have a job and the only possible jobs it will create will be some construction work but minimal.
I say, if they want the pipeline fine give them the pipeline as soon as they bring back 30,000 jobs from Manila, India, Mexico and Dubai then we'll talk.
I have little doubt Mr. Girling's higher estimate included the more numerous & relatively temprorary construction jobs & the much lesser number of permanent jobs. I do not see the inconsistency in the jobs figures.
Not likely.
"With the current transport infrastructure, that oil can't get out of the Midwest; there's a glut of it stuck at storage depots in Cushing OK, which is depressing the price of WTI relative to Brent. "
Then:
"The result [of Keystone] will be an end to the over-supply in the Midwest, which will raise prices in the primary region now supplied by Cushing."
The region is being oversupplied and the rest of the market, i.e. the rest of the US and world, is being denied price reducing supply.
Also, if your concern is the aquifer would you support a pipeline that takes a different path, a path that does not threaten the aquifers?
Tar sands oil will be extracted for as long as the price of oil exceeds the cost of production. The pipeline adds zero to the emmission of carbon, it merely allows transport of greater volumes to the US. Opponents of the pipeline leave the US with little choice but to continue the murderous dependence on Mideast oil. Sure, we should be working to elimnate our dependence on fossil fuels and but alongside that ending dependence on foreign oil woudl go a long way to ending the terrorist threat and the wars and killing the US is engaged in today.
The focus of environmentalists, progressives like myself, should be on insuring carbon emissions are controlled and minimized using the maximum available control technofogy and oil extractions methods.
we just gave huge subsidies to oil corps who continue to show record profits and yet are not doing anything to help this country..
I say let Canada run a pipeline to their shores..... why down the middle of our country with farm lands and Aquifers in place that are much more important to us
=Frankly, the talk of "benzene" and "tar sands" makes my head swim, but you certainly helped to clear up some of the issues surrounding the XL pipeline.
=But, a word of caution. It may be premature to talk about "victory" in stopping the pipeline. President Obama didn't kill the project; he delayed it--until after the November, 2012 election. Our president has a habit of doing this on matters that are politically sensitive--e.g., the "Bush tax cuts for the wealthy"--only to disappoint his progressive supporters once the elections are safely past.
It is safer, easier, and cheaper to transport crude oil in 1 large pipeline than to transport 10-15 refined, more volatile products in 10-15 smaller pipelines.
I haven't said anything against the pipeline until today, for two reasons. One, geopolitics favors any nearby energy source. Two, I consider climate change a lost cause, pipeline or no pipeline. The effects will be whatever they will be, and we'll either live with them or find a technical fix.
But the greenwashing of tar is too irritating.
That is one of the more dubious claims I have heard.
All that happens even when everything goes right and nothing is spilled. Fracking fluid sometimes gets into the water supply, but only when something goes wrong.
“Tar Sands Impact on Climate Change,” Skeptical Science, Aug 23, 2011
http://www.skepticalscience.com/tar-sands-impact-on-climate-change.html
And very concise, too.
A truly remarkable comment.
Astonishing!