Revisiting the Keystone XL Pipeline Issue

President Obama’s recent decision to deny Trans Canada’s application for permission to build the national boundary-crossing Keystone XL pipeline raises several questions about my earlier recommendation to the President to approve the pipeline (see my July 6, 2013 blog post ‘Keystone XL Pipeline: A Memorandum to the President’). My first question to myself is what has changed since July 2013 to justify such a decision, at least in the President’s mind?

What I don’t believe has changed is the reality that a U.S. negative decision on the pipeline will not change Canadian intentions to develop and exploit its large tar sands resources, that development of these resources will not have a significant impact on global carbon emissions (the principal argument put forth by some environmental groups opposed to the pipeline), that U.S. dependence on Persian Gulf oil suppliers will decrease if oil is imported from Canada, or that Canada does not lack alternative transportation means to move bitumen to U.S. refineries. Canada will sell its oil resources to us and/or other global trading partners regardless, and will build other pipelines if necessary to export from its east or west coasts. It is true that mining the oil in tar sands will introduce additional carbon into the atmosphere, but this is the wrong battle to focus on – the amount is small in comparison to the much more important global warming issues that require our attention. And the battle against the pipeline, which would probably have been the most carefully regulated pipeline in history, ignores the reality that Trans Canada is already shipping bitumen to the U.S. via railway cars, a dangerous means of transportation with a bad track record, and one that Trans Canada will likely turn to even more now that the pipeline application has been denied.

What has changed is significant: the market price of oil is approximately half of what it was in 2013, Canada has a new federal government that is likely to be more environmentally oriented than the previous Conservative government, and President Obama has decided that an important part of his legacy will be global leadership on climate change issues. The sharp reduction in oil prices, which is likely to persist, has made oil exploration and development more problematic in economic terms, and the switch in Canada from Harper to Trudeau represents an important shift in governing philosophy and approach to environmental issues. Perhaps most important in explaining President Obama’s recent decision is the third factor, his legacy. There was an obvious shift in Obama’s willingness to speak out on climate issues after the 2014 midterm elections when he no longer had to worry about jeopardizing the electoral chances of Democratic House and Senate candidates. His behavior since has been one many of us have long been waiting for, and he has taken the lead in arguing for limits on carbon emissions both domestically and globally, a welcome and needed change. The Keystone decision is of a piece with this new behavior, especially with the Paris meeting on climate change coming up next month. This clearly political decision may be justified for some on the basis that if the U.S. won’t take even small symbolic steps to reduce carbon emissions and global warming, why should other countries striving to improve their economic welfare undertake such efforts?

If the environmental groups opposing the pipeline had made this latter argument in 2013 I could have better understood their opposition. But they didn’t – they incorrectly projected the pipeline issue as having a major global impact on carbon emissions, and completely avoided discussing the dangers associated with shipment of bitumen by railway car.

It was the wrong issue in my view to devote so many resources to, when environmental sensitivity is needed on more important issues such as the need to expedite the transition from a fossil-fuel dependent economy to one increasingly dependent on renewable energy. My views were captured by a Washington Post editorial on November 6th that stated:

“Yet world governments are smart enough to recognize what many activists apparently have not: The Keystone XL fight hardly matters in the grand scheme of the global climate. Perceptions of U.S. climate leadership depend on Environmental Protection Agency rules to reduce emissions from U.S. power plants and cars, not on a domestic political psychodrama.

Some smart environmentalists have excused jettisoning substance and siding with the anti-Keystone XL crowd by emphasizing the symbolic importance of the pipeline. Cultivating enthusiasm with a victory on Keystone XL might lead to meaningful progress in other areas of climate policy, the thinking goes. Not only does this view infantilize environmentalists, its illogic could justify all sorts of irrational, arbitrary decision-making.”