Everybody Must Get Keystoned

The Keystone XL pipeline is not a very big deal. While its politics are complicated, the ultimate effects from building the pipeline – or not – are not going to have a big impact on anything or anyone. The reason: Canada’s tar sands are (duh) in Canada – beyond the reach of US policymakers. And Canada is intent on seeing them exploited to the fullest. Whether the oil coming out of Alberta gets piped down to refineries on the US Gulf Coast or not, it’s going to be extracted from those tar sands and burned for energy somewhere on planet Earth just the same.

Much controversy stems from the fact that tar sands yield an exceptionally dirty oil, via processes that release far more atmospheric CO2 than conventional oil extraction – even more than is released by extraction from the Bakken formation. And the environmental harm is not limited to greenhouse gases. Considerable harm also occurs on the local level, to Alberta’s boreal forest, which is itself a carbon sink; and to numerous local animal species.

Some make the economic argument that, by allowing the project to move forward, the US will be lowering the production costs of an especially dirty fuel source, making it that much more competitive in the world market for energy, and consequentially making alternatives to fossil fuels that much less attractive. The problem with this argument is that the effect of the pipeline on production costs is not likely to be significant enough to impact development of the tar sands. It will not impact the price of oil one way or another, and as such will have no effect on oil consumption at all.

Some raise concerns about the environmental hazards of the pipeline itself. While it’s true that it would pass over vital stretches of the Ogallala aquifer – a massive underground formation that sprawls beneath much of the US high plains, critical to the region’s multibillion dollar agriculture industry – the pipeline does not pose a significant threat to the vitality of the aquifer as a whole, because any spill would likely be locally contained in its effects. (A far more serious concern about the aquifer is the unsustainable rate at which agribusiness is currently drawing water from it.)

The oil from Alberta is presently being moved across the US via road and rail, which are far more carbon-intensive modalities than a pipeline. And even if the US doesnt approve Keystone XL, Canada has a back-up plan: to build an all-Canadian pipeline, east to New Brunswick.

The struggle to protect the planet from the risk of global warming occurs on many fronts – but this is not a good fight. The real problem with fossil fuels is economic: their use carries enormous costs that are not borne by end-users, and as such these fuels are priced much more cheaply than they should be. If those costs were internalized by the industry and its customers, fossil fuel prices would rise dramatically, and their desirability as an energy source would drop precipitously – making renewables immediately more attractive for use and development.

Instead of looking to throw up arbitrary obstacles to oil production and use – like refusing to build a pipeline that would probably shrink the carbon footprint of tar sands exploitation – governments should take the direct route of tax policy. Specifically, taxes should be levied on oil consumption such that end-users pay something that approximates the true cost of burning oil. That cost includes local environmental degradation, the use of the atmosphere as a carbon sink, health costs from pollution, and military costs concomitant with the enrichment of states like Iran, Russia, and Saudi Arabia, who use revenue from oil sales to support repressive regimes and-or terrorism worldwide.

US President Obama should not sign off on any plan to approve Keystone XL that does not include a provision to significantly increase taxes on coal and oil. That is the compromise liberals should aim for. The real problem with fossil fuels comes down to dollars and cents. Force producers and consumers to absorb the true cost of their actions, and those actions will change – faster than you can build a pipeline through Nebraska.








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