Stephen R. Kelly is a former U.S. diplomat in Canada and Mexico and is the associate director of Canadian Studies at Duke University
The Obama Administration has again delayed a final decision on the Keystone XL pipeline, this time because of a lawsuit in Nebraska This news will likely have little impact on North American energy markets. Indeed, the project may no longer be needed, a state of affairs that environmentalists should regret even more than pipeline proponents.
Because by saying no to Keystone XL, which this latest delay makes much more likely, we are necessarily saying yes to alternatives that may well be worse.
For those who can barely remember why the TransCanada Corporation applied for a permit to build Keystone XL nearly six years ago, the pipeline was supposed to move 830,000 barrels of crude oil a day from the Alberta oil sands to the U.S. Gulf Coast. There it would supply U.S. refineries originally built to handle heavy, sour crudes from Venezuela and Mexico, countries whose oil output has dropped sharply in recent years.
Given that Canada has become the United States’ largest foreign oil provider by far, and that the surge in Canadian crude, also heavy and sour, has overwhelmed the existing network of north-south pipelines, Keystone XL made good business and energy security sense.
After all, would you rather import oil from a known America hater like Venezuela, or from a reliable ally right next door that is also our largest overall trading partner?
This logic, however, has failed to sway many environmentalists, who have opposed Keystone XL for three main reasons.
First, they worry the pipeline could leak, as other pipelines carrying Canadian crude have recently done.
They also object to the kind of oil the pipeline would carry. The extraction of oil sands bitumen is more energy intensive, and therefore more polluting, than the average crude produced in the United States. If the U.S. would import less of it, they argue, Canada would produce less of it, reducing the global environmental damage.
Finally, they view cheap Canadian crude, which sells at a sharp discount to other crudes due to its low quality and oversupply, as an enabler to an oil-addicted U.S. economy. If getting an oil fix weren’t so easy, goes this thinking, perhaps we would find renewables more attractive.
But on all three counts, killing Keystone will have either no effect, or make matters worse.
Pipelines are by far the safest and most environmentally friendly way to move oil.
A badly managed leak of Canadian crude from a pipeline near Kalamazoo, Mich., in 2010 released roughly 20,000 barrels of oil into a local stream, the largest inland oil spill in U.S. history. But this pales by comparison with the 257,000 barrels of crude the shipwrecked Exxon Valdez poured into Prince William Sound in 1989, or the five million barrels the Deep Water Horizon blowout pumped into the Gulf of Mexico in 2010.
Perhaps more important, inadequate pipeline capacity aggravated by Keystone XL’s delay has led Canadian and American energy companies to move more oil by train. From just 2012 to 2013, rail shipments of crude oil in the U.S. jumped 74 per cent. Canada has announced plans to expand its rail transport capacity for crude oil by an amount that would more than replace Keystone XL.
Over this same period, three major derailments have demonstrated the dangers of this new mode of oil movement, especially the 2013 Lac-Mégantic, Que., explosion that left 47 dead.
Crude oil pipelines aren’t perfect. But unlike locomotives, they don’t emit greenhouse gases. And they rarely blow up.
As for keeping Canadian oil in the ground if Keystone XL is killed, foreign investment, surging demand for energy in China and India, and new pipelines in Canada will provide sufficient impetus to produce Canadian oil and alternate ways to get it to world markets.
The U.S. State Department’s final environmental impact statement on Keystone XL noted in January that even severe pipeline constraints were “not enough to curtail most oil sands growth plans or to shut-in existing production.”
Finally, even if Canadian crude deliveries to the U.S. could be curtailed, we would hardly stop using oil. U.S. oil production is surging, which coupled with our booming natural gas production is giving U.S. consumers plenty of new energy options. Killing a Canadian pipeline will not affect this purely domestic phenomenon.
In short, delaying Keystone XL will have no impact on how much oil comes out of the ground in Canada, how much reaches the U.S., or how much we use.
But it will certainly make moving oil around North America far more dirty and dangerous.