Originally posted at the American Prospect. Used by permission of the author.
Chances are that you missed the State Department releasing the final environmental review of the Keystone XL pipeline last week. You were meant to: it came out on 4pm on the Friday before Super Bowl Sunday. The mainstream media only had a few moments to glance at the executive summary—the report itself is an un-skimmable eleven volumes long—before the news cycle moved onto the big game.
But if you live or work in Washington, D.C., and take the Metro, you may well have been assailed for months by Canada’s multi-million dollar advertising blitz promoting the pipeline. Commuters are being treated to homey images of happy little girls poking their heads out from behind the American and Canadian flags, side by side, and to awkward slogans like “America and Canada: Standing together for energy independence.”
The commuters the ads are targeted at are the people involved in deciding whether to approve TransCanada Corporation’s application to build a pipeline that would carry up to 830,000 barrels of per day of diluted tar sands bitumen 1,179 miles from Hardisty, Alberta to Steele City, Nebraska. The thick, dirty oil would then enter the 487-mile southern portion of the pipeline, rebranded the “Gulf Coast Pipeline Project,” to refineries that can handle the heavy crude in Texas and Louisiana; that southerly pipeline started flowing last month. Now that State has completed its environmental impact report (known by the bureaucratic colloquialism SEIS), the ball has been passed to eight federal agencies that now have 90 days to comment.
Among them are the Departments of Defense, Homeland Security, Energy, and Justice. These agencies will obviously consider how the pipeline might relate to America’s desire for energy security.
Perhaps less obviously, they will also consider the pipeline’s relationship to climate change, which each agency has officially identified as a major threat to American security. In their 2010 quadrennial reviews, DoD stated that climate change “may act as an accelerant of instability or conflict,” and DHS said that:
“Dependence on fossil fuels and the threat of global climate change … can open the United States to disruptions and manipulations in energy supplies and to changes in our natural environment on an unprecedented scale. Climate change is expected to increase the severity and frequency of weather-related hazards, which could, in turn, result in social and political destabilization, international conflict, or mass migrations.”
Climate change and energy insecurity will—or at least should—be the top concerns for the officials at these four departments who are considering the pipeline. To help them perform a rigorous review, here are a few things that these officials should keep in mind.
First, Be Skeptical
There are strong reasons to be dubious of the objectivity of the SEIS. Investigative reporters found several conflicts of interest contractors who were preparing the report had with TransCanada. The first environmental impact statement was prepared by the firm Cardno Entrix, which listed TransCanada as one of its major clients.
The State Department also contracted work out to Environmental Resources Management Inc. (ERM Group), which is closely tied to TransCanada. In fact, it was TransCanada who recommended ERM to the folks at State. It wouldn’t have come as a surprise to TransCanada that ERM has a record of greenlighting environmentally questionable projects. ERM has worked for TransCanada before and even lobbied for the company—but on its application to State, it lied and claimed never to have connections.
And then it looks like State covered up the conflicts. The department’s Inspector General started an investigation, and 24 House Democrats signed a letter asking President Obama not to let State release the final SEIS until the Inspector General’s investigation was finished and made public. That didn’t happen.
Who Actually Gets the Oil?
The first pillar of energy security is stable access to adequate energy supplies in order to meet U.S. demand. Will the pipeline help?
The pipeline’s advocates make it sound like all of the additional Canadian tar sands oil that would flow through Keystone XL would end up in the tanks of American cars. As TransCanada CEO Russ Girling said, there was no crude oil that would come out of the pipeline and get re-exported. “I have talked to every one of our customers, both producers and refiners, I’ve asked them the question again—do you have any intent of shipping any of this crude oil offshore? And the answer is absolutely not.”
But he’s playing a rhetorical trick here: He says “crude” oil. Of course, the crude oil wouldn’t get re-exported; the refineries on the U.S. Gulf Coast would refine it. And once refined—yep, you guessed it—it isn’t “crude” oil anymore. At that point, it has been processed into different products, including gasoline, diesel, liquefied natural gas, jet fuels, lubricants, and more.
So where will those refined products end up? When asked by then-Representative Edward Markey (D-MA) to support a condition that the Canadian tar sands be used in the United States after they’re refined, TransCanada’s CEO balked, claiming that such a condition would cause its clients to pull out of their refinery contracts. They’ve already contracted three-quarters of the oil to foreign companies or to Valero, an American company whose internal documents detail to its investors its plan to export the refined products.
Export beyond the United States is at the core of the Keystone XL strategy. Our northern neighbor is estimated to have the world’s second or third greatest quantity of oil reserves, 97 percent of which are locked in tar sands in Alberta. That is also the percentage exported to the United States, and as Canada’s Natural Resources Minister Joe Oliver recently said, “we would like to diversify that.” Foreign-government-owned oil companies have already invested tens of billions of dollars in Canadian tar sands, including PetroChina and the Chinese National Offshore Oil Corporation. (One assumes this isn’t mere financial speculation.) Canada has its eye on Europe as a market for tar sands oil, and so it is doggedly fighting—with U.S. and U.K. help—the European Union’s attempt to pass a Fuel Quality Directive that would rate the relative carbon pollution of different types of transportation fuels to help it reach its 2020 targets; tar sands are considered 25 percent dirtier than conventional oil.
Security from Price Fluctuations?
The second pillar of energy security is financial: maintaining the stability of prices. Will Keystone XL help or hurt? It’s unclear. The estimates range from it doing nothing to it lowering prices by raising consumption—and thereby undermining the economics of tar sands production, which are predicated on high worldwide oil prices. Or, the pipeline might raise prices by $3-4 billion.
From Pipeline to Carbon Bomb?
We have lots of pipelines, so what’s the big deal with adding one more? The SEIS tries to make it seem like Keystone XL is just a drop in the bucket, and that Alberta’s tar sands oil are going to get to market with or without the pipeline.
But will it? Keystone boosters say yes, absolutely, a pipeline would just be cheaper and more energy efficient than using trains to transport tar sands. But as energy and security expert Michael T. Klare explains, Keystone XL “could determine the fate of the Canadian tar-sands industry.” A Canadian pro-tar sands think tank issued a report entitled “Pipe or Perish: Saving an Oil Industry at Risk,” which found that “investment and expansion will grind to a halt” without the pipeline. Several oil executives and analyses by the International Energy Agency, Goldman Sachs,Toronto-Dominion Bank, Royal Bank of Canada, and Deloitte agree.
From an energy security standpoint, this might suggest to the federal agency reviewers that the pipeline is a good idea; even if it won’t directly help, it will be a catalyst for more tar sands crude making its way into the United States over time.
But this is where the climate change question comes up, and it’s why ERM and the pipeline’s other boosters are trying to make it seem like Keystone XL isn’t all that big a deal. By saying that it’s going to happen anyway and only discussing the environmental effects of the single pipeline, they are practicing a bit of misdirection, distracting us from the big question of what a massive expansion of Alberta’s tar sands industry would do to the environment.
This is why the pipeline issue has so galvanized environmentalists. It is also why the EPA doubted the validity of the draft SEIS when it was released last year (also at 4pm on a Friday). The EPA found that it underestimated negative environmental consequences and that its rail-will-do-the-trick market analysis was seriously flawed. And despite an oft-cited recent report contending that the pipeline won’t make much difference (which it turns out was quietly paid for by the Alberta government), kickstarting what has been called “the world’s largest industrial project“—Canada aims to triple or more its production by 2035—would make a huge, dangerous difference.
In addition to the high toxicity, pollution problems, and particular spill risks, the relative dirtiness of tar sands oil would cause 17 percent more CO2 (according to the SEIS, though estimates often go higher) to end up in the atmosphere compared to the average gallon of oil in the United States. And that doesn’t include the carbon sequestered in the forests, wetlands, soil, and other biomass that are torn up to access Albertan tar sands that would also be released into the atmosphere. (On the environmental costs of digging for tar sands oil, the SEIS deferred to the review conducted by the boosterish Canadian government.)
But perhaps worst of all is the simple fact that accessing a significant amount of Canadian tar sands oil simply means that the world’s growing demand for oil will be fed. Can American security withstand continuing with business as usual over the long term?
The prominent climate scientist James Hansen—a favorite target for attacks by the fossil fuel industries and climate deniers—has famously said that if Keystone XL is approved and if over the long term, high demand and high prices lead to technologies enabling all of Alberta’s tar sands to be exploited, “it will be game over for the climate.”
To understand his scary prediction, it is important to understand the fundamental notion of the world’s “carbon budgets.” Put simply, we can predict the quantity of greenhouse gases (GHG) we can pump into the atmosphere before warming the earth by an average of 2 degrees centigrade, which is generally seen as the highest safe (if not actually good) increase. We can also predict how much GHG it will take to warm the atmosphere an average of 4 or 6 degrees centigrade, which would be catastrophic at home and abroad. Those amounts are the budgets; it’s all we can burn; it’s as simple as that. (Here is a helpful explanation by David Roberts.)
To stay within a 2 degree budget, it is widely accepted that the world needs to reduce its use of fossil fuels, not increase it. We can only burn one-third of the world’s existing, proven fossil fuel reserves. That’s a big challenge with rising demand for energy prompted by a growing population and a surge in the number of growing economies.
Our Nation’s Interest
Of course, it might not be so bad. Industry lobbyists will certainly sneer at such dire predictions. But will they admit that their arguments largely rely on other areas of Canadian life reducing its carbon output, or that Canada has been ranked the worst overall carbon performer in the developed world? Will they concede that the models have actually consistently underestimated the ways that the climate has changed so far? Will they confess that their job-creation claims are wildly exaggerated and that even the SEIS states that the completed pipeline would only provide 50 permanent jobs?
Last June, President Obama said that Keystone XL should only be approved if “doing so would be in our nation’s interest … [which] will be served only if this project does not significantly exacerbate the problem of carbon pollution.” Our security officials need to be prepared to see through the industry’s talking points if they are to conduct an objective and rigorous review of the SEIS. And if they want to take the security ramifications of TransCanada’s application and climate change seriously, they will have to seriously consider leaving carbon in the ground.
Jeremiah Goulka writes about American politics and culture, focusing on security, race, and the Republican Party, of which he is a former member. He was formerly an analyst at the RAND Corporation, a recovery worker in New Orleans following Hurricane Katrina, and an attorney at the U.S. Department of Justice. He lives in Washington, D.C. You can follow him on Twitter @jeremiahgoulka or contact him at firstname.lastname@example.org. His website is jeremiahgoulka.com.