The Keystone to Happiness

The Keystone to Happiness
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“Here’s what I know about Keystone XL,” tweeted famed Canadian political commentator Paul Wells the other day. “Every time the President of the United States mentions it in public, he laughs. And it’s his decision.”

Barack Obama certainly had himself a good guffaw at the thing’s expense last week, at least according to the fastidious stenographers at The New York Times. Asked to offer his opinion on TransCanada Corp’s proposed Alberta-to-Texas petroleum pipeline — a massive cross-border infrastructure project backed almost unanimously by the entire Canadian politico-economic establishment — the President is noted to have given some skeptical “[chuckles]” at a number of the project’s purported promises.

Obama’s snark generated frantic headlines across Canada, as is always the case when the man so much as sneezes the words “Keystone.” Since the President has refused to officially authorize the thing for about for about four years now (approving international, multi-state projects of this sort being one of his constitutional prerogatives), every single ambiguous utterance he offers on the subject is systematically parsed, deconstructed, and dissected in this country by reporter and politician alike, as they desperately search for the thinest sliver of hidden finality from an administration that’s been too coy to offer any direct closure.

Back in March, that search seemed to be going well, and Canadians seemed relatively certain that the Obama tea leaves were signaling a “yes.” The State Department released a 2,000-page report on Keystone that, while officially neutral on the project, had nevertheless found significant flaws in several of the arguments against it.

The report found no evidence, for starters, that refusing to build the pipeline would have much impact on the environment one way or another. The pollution generated by the Albertan oil sands, from which the Keystone crude would originate, is likely to continue pipe or no pipe, concluded the authors, and as such, the President’s approval or veto would be a mostly irrelevant gesture if the goal is reducing greenhouse gas emissions. Considering the bulk of opposition to the project — on both sides of the 49th — comes from climate change activists, that concession seemed like a pretty big victory for the pro-Keystone forces.

Given the Prez’s recent backtracking, however, the amount of joy that was harvested from the State Department’s exceedingly backhanded compliment is starting to look a tad pollyannaish in retrospect.

For a country so deeply engrained with US culture, it’s striking how badly Canadian officialdom has misread the American left’s mood on this issue. A recent article in the Globe and Mail was unsettling in the amount of naiveté on display from the very politicians most responsible for pushing the pipeline.

“If you had asked me prior to the U.S. election, I would have said, ‘Of course it’s going to be built … regardless of who wins,'” said the Mayor of Calgary. But now? “The feeling in Canada over the past four or five weeks has become less optimistic about this thing being built.”

The federal finance minister expressed similar surprise. “I had reason for optimism before the election that the President would approve it, were he re-elected,” he said. But then the minister listened to Obama’s long paean to green causes in his second inaugural address and found it, well, “not encouraging.”

As I’ve argued before, I think a lot of this helplessness stems from Canada’s pervasive “liberal bias.” Because Canadians are taught to believe the Democratic Party is really just America’s principled centre-right, and therefore trust President Obama with near-bipartisan certainty, the idea that he was actually a run-of-the-mill lefty on environmental issues — dogmatic, economically illiterate, and beholden to the green lobby – was never seriously contemplated. Though that’s where the evidence now seems to point.

Obama’s derisive claim in the Times interview that Keystone “might create maybe 2,000 jobs during the construction of the pipeline” was promptly slapped with a “false” rating on PoliFact.com. There was “no supporting evidence” for that figure, said the site; the real number, based the Obama State Department’s own estimations, was “nearly twice as many.” The TransCanada corporation meanwhile, biased source though it may be, is promising a job creation figure closer to 13,000, and claims they’ve already employed 4,000 Americans on the project so far.

Facts were similarly short in the President’s blunt assertion that Keystone “might actually cause some gas prices in the Midwest to go up” since most of Keystone’s Canadian oil will eventually be exported abroad by Texas refineries, rather than remain in the States. But “much,” in this case, is relative The Wall Street Journal noted in March that “Texas Gulf Coast refiners that would be the main recipients of Keystone-shipped crude already exported more than 60% of the gasoline they produced” last year, with that percentage based on estimates of likely US consumption. Assuming the Keystone oil is sold to foreign and domestic markets at a roughly similar ratio, that still means 40% of the pipeline’s estimated inflow of 830,000 barrels a day will remain in the US market — hardly enough to destabilize domestic prices by suppressing supply.

In any case, America’s currently high gas prices aren’t so much an issue of supply and demand as supply and distribution. Crude oil production within the US has been dramatically climbing in recent years thanks to new technologies like fracking, though this has also had the result of causing something of a “bottleneck” effect as pipelines and refineries struggle to move and process the petroleum as fast as it can be dug up. Whether or not the construction of Keystone would do anything to alleviate this problem is an open and fair question, but it’s a concern quite distinct from the President’s worry, which was basically just a variation on the old protectionist trope of linking expanded trade abroad with a worsening standard of life at home.

Then there was his stuff about greenhouse gasses, his insistence that “I’m going to evaluate this based on whether or not this is going to significantly contribute to carbon in our atmosphere” even though that question had already been settled by the aforementioned State Department report. Plus his related claim that Canada “could potentially be doing more to mitigate carbon release,” even though the government of Alberta is already doing more than any state or province on the continent as far as imposing tough (and mandatory) CO2 emissions reductions on its petroleum sector.

Second term presidents worry a lot about their legacy and they worry a lot about their influence. At a time when Obama is already badly emasculated by an intransigent House of Representatives, and, if Nate Silver is to be believed, perhaps soon the Senate as well, the pressure is mounting to scrape up some sort of policy victory, somewhere, before the noise of 2016 overshadows him completely.

Vetoing Keystone checks a number of attractive boxes. It can be done unilaterally, it appeases the increasingly disillusioned Democrat base, and it provides the President with something big and flashy he can say he “did” to help the environment, in case anyone ever asks. It won’t do much for jobs, energy independence, economic growth or Canadian-US relations, but hey, at least it gives Obama a good laugh. 




^ 47 Comments...

  1. @RicardoB

    Nothing in the State Department's report suggests that it would be an "irrelevant gesture". That's entirely the Washington Post's opinion in that link.

    The report states that denying Keystone would decrease oil sands production up to 4%. That's obviously much less than just shutting down the oil sands altogether but does anyone seriously think that it's remotely realistic to just flip the switch on something that influential? Likewise, there's no magic bullet to fight climate change–it's all going to be incremental changes.

    The report is unambiguous about Keystone's "environmental impact" in regard to "greenhouse gases": "Combustion of fossil fuels such as crude oil is a major source of global greenhouse gas emissions, which contribute to human-caused climate change."

  2. penghemat bbm

    agree with u

  3. Taylor

    As a Canadian lefty, I must say, I'm loving every minute of this.

    When the Liberals were in power, every action that they took that was different than the absolute American line was greeted with the wild shrieks of Reformers/Allliancers/Conservatives that it would kill commerce, put jobs in danger, etc.

    Now they are finally realizing that, oh wait, the US does what the US wants to do.

    Schadenfreude is sweet.

  4. @SideshowJon36

    Obama believes that Carbon Fuels are wicked and destructive, and will let Americans muck around in 12% unemployment rather than make fuels more accessible. So, if he's willing to do that to us, why would you think he'd do you Canadians any favors?

  5. Jake_Ackers

    I think all environmentalist (myself included) should support TODAY all the drilling and extraction and exploration of oil. Why? Because today we care about the environment. 50 years from now, when we are having wars over the last drop of oil, or when OPEC desires to screw the US over again, we won't. The gov't would order the drilling of each drop and to heck with the environment they will say. At least if we do it all today, people will care about the environment, get the oil out and find an alternative. As long as there is oil, even if the price is high, we will keep using it.

  6. Rachel

    As a geology student, let me just say that there's a major reason for opposing this that you missed. The pipeline would cut across the Ogallala Aquifer, one of the biggest sources of water in the US. Though the water has built up over millions of years, it recharges from rain incredibly slowly, so it's effectively a limited resource. If something were to happen to it, the cost of irrigation in Western states that require it for their crops would go up a lot. On the other hand, rerouting around the aquifer would be very expensive.

    Furthermore, in the State Department report you mentioned, it concluded that a large crude oil spill from the pipline that reached the Ogallala "could spread as far as 1,214 feet, with dissolved components spreading as much as 1,050 feet further."

    With that said, I don't have much of a problem with tar sands and oil shale itself. After all, we already use fracking to jump-start production in a lot of our normal crude oil wells. As long as the pollution doesn't take place over water or valuable groundwater, at least it will be isolated, and I believe it is possible for the long-term economic costs of the cleanup of a spill to be outweighed by the productivity of the pipeline at some point.

  7. Jake_Ackers

    So couldn't we just build around it? Why is it always a yes or no with politicians. Why not a third option?

  8. Rachel

    Well, in September 2012 changes were proposed, so that it avoids the Nebraska Sand Hills. Managers of the pipeline had been quoted as saying things like "building across the Nebraska Sand Hills would be difficult, but we have a saying, if you can put a man on the moon, you can build a pipeline." Given the difference in risk to the general population between a failed moon mission and the aquifer, not really encouraging. They changed their internal definition of "Nebraska Sand Hills" such that it still cut across it.

    However, they changed it to cut across the aquifer such that 20% lies to the east of the pipeline, meaning if there were a leak, it would be flowing downhill, and most of the 20% would lie on impermeable bedrock. The downhill incline is caused by sediment outflowing from the Rocky Mountains as it erodes, meaning the slope is consistent.

    There is still grounds for some suspicion besides previous routes, though. TransCanada possesses maps showing the route and whether or not it might be built, say, uphill of a farm, or through somewhere not protected by impermeable bedrock, but hasn't committed to sharing them with the federal government. It should be assumed spills will happen, given the track record of the company with previous pipelines.

    I'll admit, though, my doubts are mostly grounded in suspicion the company still hasn't done all it can.

  9. derp

    Chicago has a refinery. On a river too. Access to the lakes and the entire central us/canada area.

    We're wondering why Texas gets to be the destination.

  10. Dan

    Unlike Texas, Chicago is corrupt beyond repair, and doesn't require tankers to travel down the most important waterway in North America.

  11. billytheskink

    The Chicago area has 2 major oil refineries, Southeast Texas has 16.

  12. Jake_Ackers

    IIRC, its the kind of oil. Most of the oil is rather "dirty". So only the refineries in Texas have the infrastructure to deal with it. Plus there isn't going to be much of this oil left any how. So its cheaper to send it to Texas and back than build a refinery for a limited supply. Albeit a huge limited supply.

  13. Kody

    Just a minor comment regarding Alberta doing anything about its carbon emissions. Just because the regulations are there, does not mean any infractions are being punished. Also, good read JJ! http://www.cbc.ca/asithappens/features/2013/07/24

  14. @Cristiona

    You know, even if it is "only" 2000 jobs, I have to wonder what economy the president is looking at that he can sneer at giving 2000 people jobs.

  15. OldsVistaCruiser

    From what I've seen, this pipeline would only exist to cut across the U.S. in order to sell that oil overseas, and those in the States won't see a drop of it. That's why it's opposed.

  16. billytheskink

    Perhaps if they had named the pipeline after a better beer…

  17. Katriel

    Wait, inasmuch as not having Keystone makes oil more expensive somewhere, doesn't it at least marginally reduce carbon emissions? Given that we can't seem to get any sort of carbon tax in the plausible future, I think on principle we should take a hike in the price of oil any way we can get it. What am I missing?

  18. Les

    That carbon emissions from use of road fuels is a drop in the bucket compared to industrial emissions?

  19. Jake_Ackers

    The funny thing is that we built a nuke with a matter of years. Yet we spend more on loans and tax credits and grants to stupid alternative energy ventures than we would if we found a strain of Algae that was economically viable. Finding ONE alternative to oil, would bankrupt terrorism overnight, improve health, shut up the whole oil is evil and global warming movement and save trillions. The problem is the fuel, not the internal combustion engine. Algae I think is the way to go. If we built a nuke in a few years, I'm sure a Green Manhattan Project would solve the issue rather quickly.

  20. HeartRight

    Meh. The Manhattan Project was working out the engineering details, of something already KNOWN.
    Not discoverig an UKNOWN – always a dicey unpredictable business.

    Algae would b biomass. We already know how to do biomass.
    The problem is that growing something new and then burn it, is not all that competitive with digging up something old and then burn it. In the cas of oil, Natur alrady did all the hard work for us.

  21. Jake_Ackers

    True but out of all the alternative fuels Algae can be produced rather cheaply (compared to other fuels). Although, oil is still cheaper. And with increased research, production/use of algae, and the increasing price of oil, algae and oil will cross paths in terms of price. All new techs cost money eventually they get cheaper. So why algae over other alternative fuels? Because you don't need a new car. Diesel or gasoline can be made from algae. Same old cars and way cleaner.

  22. Taylor

    Jake, buddy: Let your sentences flow. You're not a telegraph. :-)

  23. Jake_Ackers

    lol thanks. Sry. I'm writing in the middle of the night or on a tablet.

  24. Rachel

    The problem with biomass fuel is that most car manufacturers say that their parts aren't built to handle high concentrations of it. In high enough concentrations, the parts will wear out faster. These sentiments were expressed in response to states like Minnesota declaring a mandate for 20% biodiesel blend.

    On the other hand, like with computers, electric car energy density has been doubling every 10 years. If the trend continues, it might hit parity over the operational lifetime of a car in 50 years. In any case, during the Bush administration $50 million was funded for biodiesel research while increasing the mandate for the total amount of blended gallons. In 2009, $700 million more was granted. Electric car batteries had about $700 million granted by the same legislation.

    The portion of the 2009 stimulus bill allocated for energy research totaled $27.2 billion, about the same amount as the Manhattan project, which strikes a curious comparison. The project allocates only about $700 million for alternative energy research directly.

    What happened to the rest? $11 billion was spent on things like weatherizing and installing alternative energy systems, which would take about 15 years to pay for themselves. However, the money was distributed to state governments, which in turn hired contractors, and in places like Delaware these contractors went on to authorize replacing practically the whole house instead of the just the insulation in order to get more funding. What punishment did they get? Delaware never pressed criminal charges and halted the program.

    Maybe if it were integrated all at one level of government with harsh criminal penalties against contractors that do this. It's a shame the opportunity was squandered.

  25. Jake_Ackers

    Good last point. If all the money was in one program control from the top like the Manhattan Project it would of been done by now.

    I understand that most most car manufacturers say that their parts aren't built to handle it. But isn't algae a bit different? I mean, even if it does damage the car. At least new cars can be built in a way to handle it. Or at least there is a lot less of a transition than lets say hydrogen, natural gas or electricity. It just seems that since algae isn't food like corn, and has byproducts that can be sold off, is carbon neutral and can grow pretty much anywhere -e specially deserts. With all the space we have, it seems to be the best alternative.

    As all you have to do is make cars more adaptable to the fuel. Which is a partial transition. Only some cars parts have to be changed. I'm sure the fuel pumps, at the gas station, can be the same. Fossil fuel oil will still be around for old cars. I may be wrong but at least it seems like the quickest transition when compared to the other alternative energy fuels.

  26. HeartRight

    I am increasingly sceptic about the 'ever-incrasing cost of fuel'. The price is not so much determined by scarcity as by the cost of extraction.

    Technological breakthroughs have no preference for any particular form of fuel over another, therefore there is n reason to expect a chage in price-differntial.
    The point remains that mother Nature has already done all the hard work in the case of fossile biomass.

    That being so, projects to find a specific straw in a haytsack are a waste of resources.
    And whether a new source of fuel displaces your existing car-technology is a matter of no consideration whatsoever.

    Quote: 'Diesel or gasoline can be made from algae. Same old cars and way cleaner.'

    No, it is NOT cheaper.
    And likewise, there is no reason whatsoever to expect the combustion of new biomass to be significantly cleaner than the combustion of old biomass.

    New biomass can quite conceivably become the[b] replacement[/b] of oil – when the marginal cost of extraction of oil becomes prohibitive. [ There is an increased cost after all with drilling deeper or transporting further ]
    It will not be an alternative choice. It will only kick in when there is NO choice.

  27. Jake_Ackers

    Agreed especially on your last point, which goes back to a post I made above. As long as there is oil, even if the price is high, we will keep using it. I know algae per gallon will cost more. However, overall I think there will be savings just on bankrupting terrorism alone.

  28. HeartRight

    Which would overlook the point that you can run a terrorist operatin on nickels and dimes.
    How much oil-revenue did the original IRA need to operate?

    It's an only tangentially related point – but trying to bankrupt terrorism is a defensive measure.
    Wars – which includes TWOT, of course are won by offensive measures, not defensive ones.
    The Western world has plenty of offensive options – it only lacks the spine to commit itself matching its opponents in their main strenghts; ruthlessness and iron will. [ It's tempting to add fanaticism – except that I dpo not consider that a strength but rather a weak spot]

    What would Ilya Ehrenburg advise? Instead, we are listening to the pathetic heirs of WH Auden .

  29. Jake_Ackers

    Valid point and I'll explain. There are really different level of terrorism in addition tolevels of motivation. Now they interchange and overlap. But bear with me here.

    Low area terrorism, the one done to inflict fear, is done with small budgets. Like the Boston bombing. All for fear and just religious zealousness or just plain hatred. Wasn't going to bring the US down or anything.

    Then you have a more direct level of terrorism, lets call it mid area in terms of planning/affect. These are the ones that can affect a nation and expose weakness. These are have a greater level of coordination like 9/11 and Benghazi. They require money whether its equipment or training.

    The big money spenders are the wide area and much higher level of terrorism. These are the ones that plan on taking over countries and holding onto power in the country. Or even the region. Afghanistan, parts of Pakistan, terrorism groups funded to overturn governments.

    The low and mid tiers can a limited affect. And may or may not work. The wide area/high tier level is the ones that were planned (and include the lower tiers). This is where the money from countries like Iran go to. This is where the resources from the country that is taken over is used for. If oil is taken out of the equation, then there is a great reduction in revenue. Iran can't fund terrorism. That has a cascading affect down the line.

    The first two levels can be dealt with by most countries or at least with the aid of the West. The last one borders on all out war. Just look at Pakistan. It can't kick out the terrorists in the North West. Will it stop terrorism completely? No, but it can be the straw that broke the camel's back.

    Reagan didn't invade the USSR. But spending the USSR into submission was part of the process and the last straw. I guess bankrupting can be more than the first big nail in the coffin. Because if the largest source of funding is cut out, then we can focus on containment. And then the countries will be able to deal with what is left in their own country. Instead of playing whack a mole with every little newly funded group.

  30. HeartRight

    The straw only breaks the back of the camel if the camel is already heavily overloaded.
    Since our or rather their camel is not overloaded, adding a straw to its back is a futile exrcise.
    I shold point out that Iran is in no meaningful sense involved in funding the Taliban or anything of that nature – nor has it the slightest reason to do so. You might as well say that Calvin funded the Inquisition.

    [You are quite right in pointing out that whack-a-mole is silly.]

    Again – what would Ilya Ehrenburg say under the circumstances?

  31. HeartRight

    May I ask which motivation is on your mind when you suggest research into alga?

    -winning TWOT?
    -Cutting waste?
    -reducing the environmetalimpact of our sacred cows?
    -utilising an underused desert?

    At the risk of sounding – and I do not mean to! – arrogant or patronising,I think you might wish to decide for yourself what the motivation for your proposed project would be, and pick one single motivation, and on single motivation only.

    Yes, I am quite aware that Energy Independence is touted as a panacea – but I think that all panaceas are guilty until proven innocent.

  32. Jake_Ackers

    Why can't it be all of it? Getting rid of oil will help bring terrorism down. In addition, to finally stop this discussion about oil being so bad. We could use the political capital to focus on real environmental issue, like dumping into our waterways. And yes all that will save a ton of money. Create a new economic sector (or well shift it from oil to algae), and really grow the economy of other parts of the country as well.

    The WW2 generation saw the nuke and a man on the moon (was more so the space race). One helped us end a war and the other lead us to secure our future. Today we need an alternative energy source to help cut the legs out from under terrorism. Of course we will need sound foreign policy strategies and the sort. And right now we don't need a person on Mars but more so a space elevator.

    China controls 95% to 98% of all the rare materials on Earth. Whomever, builds the first space elevator will control 90% of all traffic into space. We went to a "new world" (the Americas) in order to grow as a species and survive. Especially since Europe ran out of resources and needed new ones. Now we need to do the same in order to continue to grow. But that is a whole other discussion.

    My main point is that we need to continue to grow and that one alternative energy source in addition to a space elevator can secure our present and future. Both as Americans and human beings. Now easier said than done I know. But it seems that algae is the more viable solution right now. There is nothing wrong with the internal combustion engine. It's the fuel source that we are all really complaining about.

    Don't worry you don't sound arrogant. You are being polite and having a good discussion. I appreciate it because it allows me to better articulate my positions.

  33. HeartRight

    Good, so I shall stop worrying.

    Programs are difficult things to manage. If a very speculative program is to succeed, Absolute Singlemindedness of Purpose is a great help. Have mutliple targets in mind, and pretty soon sub-teams start pulling into different directions, focus is lost, and the proposed low-budget mouse [ for making holes in walls, lets say ] ends up as a huge elephant unable to gnaw holes in walls [although it could break down a building ].

  34. HeartRight

    A Great Example of a Program becoming very difficult to manage is European Unification.
    Conceived to significantly reduce the threat of internal war, it becomes unmanageable when the usual do-gooders add the no-doubt-laudable [yada-yada-yada] objectives of Human Rights and Social Progress – none of these sidegoals have anything to do with the main-goal of monopolising all power under one single authority, which of course ought to be the only goal pursued.

  35. HeartRight

    And before I forget – if you need to grow algae, use the sea. 3/4th of our planet is sea.

  36. Marissa

    Everybody feels as if we're rolling in the same direction. And so a lot of the other issues that we’re talking about — whether it’s climate change or immigration, or how we manage our trade relations — all those are eased if we’ve got our economic act together.

    Marissa ()

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  43. raghu

    From what I've seen, this pipeline would only exist to cut across the U.S. in order to sell that oil overseas, and those in the States won't see a drop of it. That's why it's opposed.

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