For the Truth on Keystone XL, Just Read a (Canadian) Newspaper
Canada’s paper of record, The Globe & Mail, ran an important column from respected economic voice Jeff Rubin today making clear the environmental realities associated with the Keystone XL pipeline. Given the superficial reporting on last week’s State Department environmental report, this clear-eyed look at the essential nature of this project to the oil industry’s wholly unsustainable plans to triple production of tar sands oil in Alberta over the next two decades. Rubin reinforces many of the points we have been making on this project (stress is mine):
According to the Canadian Association of Petroleum Producers, reaching 5 million barrels a day will require a green light for Enbridge’s Northern Gateway Project and TransCanada’s Energy East line, a doubling of Kinder Morgan’s existing Trans Mountain Pipeline, as well as an expansion of the Alberta Clipper line – all in addition to Keystone. Even with those projects going ahead, the industry would still be shy about a million barrels a day of shipping capacity, a shortfall that CN, CP, and other railways would be expected to step in and cover.
Obama’s decision on Keystone, though, is up first. Contrary to the opinion of the U.S. State Department, approving Keystone XL is indeed a necessary condition to increasing oil sands production. What happens if it doesn’t get built? Canada’s oil patch doesn’t like to think about that scenario, but it’s one that investors need to be considering.
It also makes clear a situation that most Americans may not be aware of; we have so much gasoline, diesel and finished petroleum goods that we are exporting at rates that haven’t been seen since we were propping up our allies in the runup to World War II:
“Indeed, the US is so awash in oil that, even as Obama ponders his decision on Keystone, the American Petroleum Institute is working hard to remove restrictions on exporting crude that date back to 1975. The lobbying effort would only seem to bolster the credibility of claims by US environmentalists that the Canadian oil shipped through Keystone won’t be burned by American motorists but instead shipped abroad for another country’s benefit.”
Rubin is hardly alone in pushing back on the rosy read of the environmental reviews on the pipeline that misses much of the detail buried in the 10,000 page report. The Globe & Mail’s National Affairs columnist posted a piece entitled “Keystone a Green Light? Not so Fast” yesterday highlighting the implications of the climate portions of the report towards an eventual decision on the pipeline.
And these columns are just the latest examples of a frustrating dynamic, making clear in the business (and opinion) pages north of the border, that the view on this pipeline is quite different than what is being told to anyone who will listen in the government and press on this side of the border. The message here, repeatedly, is that the Keystone XL pipeline is not essential to expansion of tar sands, won’t have significant climate impacts. We think that there is more than enough in the State Department’s research to fuel the President’s rejection of this project. But if he needs more, just read the paper in Canada…
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