by: The EarthAction Team; Larry O'Connor, Christine Chung, and Alexandra Reissig
Environmental activists won a major victory as President Obama announced in November that construction of the Keystone XL Pipeline will be delayed until after the 2012 elections. However, this decision only delays the threat - far from rejecting the proposal, the State Department released a statement saying that they will order a review of alternate routes for the pipeline that would avoid the Sands Hill region of Nebraska, home to the largest and most intricate wetland ecosystem in the United States. The debate over the XL pipeline is far from over.
Democracy Now! newscaster, Amy Goodman reported on Tuesday, January 31, that, “Senate Republicans have announced plans to introduce legislation allowing Congress to approve the Keystone XL oil pipeline, despite President Obama’s rejection of the controversial project. An analysis by the Public Campaign Action Fund and 350.org found that the bill’s 44 co-sponsors have received a combined $22.3 million in campaign contributions from the oil and gas industry since 1989. One Democrat has joined the Republican effort: Joe Manchin of West Virginia. TransCanada, the company behind the $7 billion pipeline, spent $1.33 million on lobbying last year.”
In an article posted Monday, January 30th, Brian Merchant, a reporter for TreeHugger.com identified four ways in which the Pipeline could be “lurched back to life”. The two most dangerous scenarios involve first, that the next payroll tax cut bill could include language that would explicitly state that the pipeline would be approved and second, that Joh Boehner could include a provision for approval into an upcoming infrastructure bill.
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WHY DO WE THINK WE NEED IT?
The media continues to falsely frame this debate as one between environmentalists and labor unions, enticed by the prospect of jobs. The truth is, the Keystone XL pipeline will not create sustainable employment for the nation's most hard hit, just as it will not provide energy security for the United States. Most likely, it will result in temporary construction jobs and prolong our dependence on a dirty fuel source.
While the enormous negative environmental impacts of producing oil from the Canadian tar sands are enough reason for many to realize that they are a bad source of energy for the United States, others argue that we should increase our imports. Supporters claim the pipeline will bring an array of benefits to the United States, including: increasing our energy security, supplying cheaper oil, and spurring job creation. The truth however, is that the Keystone XL pipeline will not create sustainable jobs, lessen our dependence on foreign oil, or even be enough to protect the U.S. from volatile world oil prices.
Under the best-case scenario, the Keystone XL pipeline has the potential to provide 1.5 million barrels of oil per day (mbd), the vast majority of which would be bitumen (as shown in photo) from the tar sands. That would be less than 8% of U.S. daily crude oil consumption, which is over 19 mbd. Even though 8% is a tiny portion of our overall oil consumption, it is actually not known whether or not the XL pipeline will increase the actual quantity of crude imported from Canada at all (Ensys 7).
WHAT’S REALLY GOING ON??
One factor that is largely missing from the Keystone XL debate is the heavy investment that Chinese companies are making in Canadian oil companies. If a pipeline were to be built through British Columbia, it would be 41% cheaper to transport to China than to the Gulf Coast (p 49 Ensys). Chinese Energy firms have already invested heavily in Canada, most recently with Sinopec’s purchasing of Daylight Energy Corp for 2.12 Billion U.S. dollars. Based on the financial backing of Chinese energy firms and positive attitudes of Canadian oil executives, the construction of the Keystone XL pipeline won’t stop the possibility of China being the biggest recipient of tar sands oil.
Why would Canadian oil companies express any preference to the United States when they can export to China, a growing energy market (the U.S. crude oil market is declining), for less? When was the last time you heard of a large oil company making a decision not to maximize profits?
It is conceivable that the United States could threaten the oil companies with some form of a sanction, but who is the United States to tell an international corporation where to send its product? So if it’s cheaper to export to China, and China is investing in the tar sands, where does that leave the United States? In a bidding war with China? No, thank you. An excerpt from the Congressional Research Study on the Keystone XL pipline explains impacts of exporting to Asia on the entire world petroleum trading industry, which would force the United States to purchase oil from the nations that have caused us to look for a more energy source in the first place.1 It would also mean that the U.S. would have no control over where the oil went or how it was extracted, potentially posing a greater threat to climate change.
But it's a week argument to say that if we don't do it, someone else will. The Northern Gateway Pipeline through British Columbia is not a done deal. Environmentalists in Canada appear to have more leverage than their counterparts in the United States. The United States already has enough oil flowing in from the Canadian Tar Sands to support business, but stopping both of these pipelines from being built is the only way that the entire Boreal Forest won't be cut down to produce the world's most environmentally damaging oil.
SUPPOSED U.S. ECONOMIC BENEFITS OF THE PIPELINE
The price of oil will not go down with the construction of the XL pipeline. World oil prices are not affected by 1.5 extra barrels of oil per day when the world oil supply is sitting right around 90 million bpd. For those Americans in the Midwest, many claim that the prices of oil could even increase due to the construction of the XL pipeline.
Well, at least there will be lots of jobs created by the XL pipeline, right? Probably not. A pipeline is not a job-creating machine like many politicians are telling U.S. citizens. Of course there will be construction jobs to build the pipeline, but these are temporary: three years at most.
Well, after the pipeline is constructed there will be a huge increase in refinery jobs, right? Again, probably not. All of the refineries where the bitumen will be pumped to already exist, and there will not be a large increase in the amount of workers needed because these refineries won’t be producing much more oil; they will be replacing much of the heavy crude that comes from Venezuela and Mexico with bitumen from the tar sands. A report from Perryman Group, the economic analysis firm hired by TransCanada, estimated that the XL pipeline would produce 118,935 jobs. Of these, very few construction jobs will actually go to local workers. As highlighted in a publication by the National Wildlife Foundation, this is 76,000 more jobs than the U.S. Department of State Report estimated.
Refineries create jobs, but the Keystone XL pipeline won’t create refineries. It will create a pipeline that will just sit there as oil runs through it. Further, that oil will be bitumen, and especially course and thick, sludgy oil that is especially prone to leaks and spills.
For those who believe that environmental concerns are for sissies and don’t create jobs, they cannot deny that a spill would be detrimental to the agricultural midwest. While working under similar pipeline regulations from 2002-2010, Canada had 216 oil spills due to pipeline corrosion compared to the United States' 14 spills. One of those oil spills was the Kalamazoo oil spill in Michigan carrying bitumen from the tar sands of Canada.
WHY IT’S NOT ENOUGH
To move forward with the XL pipeline, we would have to forget about the fact that the XL pipeline will put the water supply in danger in a water scarce area, that if the Canadian tar sands was a country it would be the world’s 62nd emitter of CO2, that tar sands production has created extremely poisonous tailing ponds that are so massive that they can be seen from space, that these poisonous ponds are being held in place by earthen dykes (mounds of dirt), that dangerous quantities of acid rain are coming down throughout Canada, that the pollutants from refineries in Canada, one of which is Benzene, cause enormous health risks, and that the Canadian tar sands lie underneath the Boreal Forest, a critical source of CO2 sequestration for North America.
Even if we pull a blanket over our eyes and ignore our earth, the health of U.S. citizens, and the protection of a essential water supply; it won’t change the stranglehold that world petroleum prices have on the U.S. economy and it won’t create jobs. The Keystone XL pipeline truly has nothing to offer other than to increase American and Canadian corporate wealth. Growing our military presence in oil rich regions hasn’t been working either, so why don’t we just invest in renewable energy already?
WHAT TO DO NEXT
It may seem as though the forces working for the construction of the Keystone Pipeline are too strong. They are large international oil companies and heads of government. If we thought like this 6 months ago, the pipeline would already be under way. We have delayed the decision once using our voices, and our leverage as concerned citizens. This past september we asked our members to take the monthly action and write to President Obama urging him not to approve the construction of Keystone. Today, you can still take this action. Follow this link and send the President a letter expressing your concerns. Direct participation in our democracy is the surest way toward policy change, and our voices- and votes- matter.
RESOURCES
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“If pipeline projects to the BC [British Columbia] coast are built, they are likely to be utilized. This is because of the relatively short marine distances to major northeast Asia markets, future expected growth there in refining capacity and increasing ownership interests by Chinese companies especially in oil sands production. Such increased capacity would alter global crude trade patterns. Western Canadian Sedimentary Basin (WCSB) crudes would be “lost” from the USA, going instead to Asia. There they would displace the world’s balancing crude oils, Middle Eastern and African predominantly OPEC grades, which would in turn move to the USA. The net effect would be substantially higher U.S. dependency on crude oils from those sources versus scenarios where capacity to move WCSB crudes to Asia was limited.”
Congressional Research Study on Keystone XL
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