The Keystone sideshow

By pushing to win Keystone battle, environmentalists could lose the war on climate change
Demonstrators carry a giant mock pipeline while calling for the cancellation of the Keystone XL pipeline during a rally in Washington November 6, 2011. Protesters are unhappy about TransCanada Corp’s plan to build the massive pipeline to transport crude from Alberta, Canada, to Texas. REUTERS/Joshua Roberts (UNITED STATES - Tags: POLITICS CIVIL UNREST ENERGY) - RTR2TP2R
Joshua Roberts/Reuters

News that TransCanada Corp. planned to build a $7-billion pipeline to haul more than 800,000 barrels of crude oil from the Alberta oil sands to Texas first began appearing in local papers in McCone County, Montana, in the spring of 2008. At the time it stirred little debate. Then-governor Brian Schweitzer called the project “a big dog” that would boost local property tax revenue by nearly $60 million a year. Locals mused about how it could bring 30 new jobs and enough money to pay for a new elevator in the local courthouse. They compared it to the last time TransCanada built a pipeline through the area, the Northern Border natural gas line that went online with little fanfare in 1982. “The odds are extraordinarily high that this will come to fruition,” Evan Barrett, Montana’s director of economic development told reporters in 2008. “We don’t see any speed bumps.”

These days, calling the intensely politicized debate over the Keystone XL a speed bump would be a gross understatement. It held centre stage in the last presidential election and has become the pet cause of celebrity environmentalists, who have joined protestors to form human chains around the White House. A Duke University graduate walked the length of the proposed pipeline route from Fort McMurray, Alta., to Port Arthur, Tex., and now has a book deal. The latest high-profile activist to join the anti-pipeline movement is California hedge-fund billionaire Tom Steyer, who this month said he would fund an anti-pipeline candidate for John Kerry’s vacant Senate seat in Massachusetts.

For the environmental movement, particularly in the U.S., the Keystone XL has become a potent and unifying symbol in the war against climate change: a foreign company slicing a 1,900-km scar through America’s heartland to export its oil to other foreign governments. “Environmentalists clamour and pray for issues as symbolic as this pipeline,” wrote John Coggin, editor of International Policy Digest.

The problem is, as a growing number of scientists and environmentalists are pointing out, the benefits to the environment of cancelling the pipeline are themselves largely symbolic and that by pushing to win the battle over Keystone, environmentalists could help lose the war over climate change.

In an editorial in January, the scientific journal Nature urged President Barack Obama to approve the pipeline, arguing that cancelling the project won’t stop the oil sands from being developed and that some oil produced in California was more damaging to the environment than the Alberta bitumen, a fact ignored by activists. “It’s a shame that a one-metre-in-diameter pipe is suddenly having to wear all of the sins of the carbon economy,” Calgary Mayor Naheed Nenshi told Reuters. “You know, it’s not clubbing seals with child labour.”

Despite the extended delay in approving the pipeline, Alberta’s oil sands have continued to develop, causing a stockpile of crude inventories at the storage hub in Cushing, Okla., and pushing down the price of Canadian oil. U.S. refineries have benefited from the steep discount. Valero Energy Corp., which operates more than a dozen refineries, has seen its stock price nearly double over the past year thanks in part to surging profits from discounted Canadian crude.

Meanwhile, rail traffic carrying crude shot up nearly 50 per cent in 2012 even as analysts warned that rail was a far more dangerous method of transportation than pipeline. The Manhattan Institute, a conservative think tank, calculated that transporting oil by rail was 34 times more likely to cause a spill compared to shipping it the same distance by pipeline. Irving Oil’s refinery in Saint John, N.B., the second largest in North America, imported more than five million barrels of crude from the U.S. last year by train. Earlier this month, a train carrying 96 carloads of North Dakota crude to Saint John derailed into the Penobscot River in eastern Maine.

“The Keystone pipeline is not the sine qua non of environmental protection,” says Paul Bledsoe, an energy consultant and a former White House climate aide to the Clinton administration. If President Obama wanted to dramatically cut U.S. greenhouse-gas emissions, Bledsoe says, he would approve the pipeline and, at the same time, announce new environmental regulations for coal-fired power plants, which are far more polluting than the oil sands. “The emission reductions you gain from regulating existing power plants are many times greater than those that might accrue from the [denial] of the Keystone pipeline,” he says. “Orders of magnitude more.”

Power plants account for roughly 67 per cent of U.S. pollution (compared to about 14 per cent in Canada). Two coal-fired power plants owned by a regional utility in Georgia emit nearly as much pollution as the entire Alberta oil sands, according to figures from environmental agencies in Canada and the U.S. And in Canada, Saskatchewan had the highest per capita greenhouse gas emissions of any province last year thanks in part to its dependence on coal. Meanwhile, the country’s top polluter, TransAlta’s 1970s-era coal-fired Sundance power plant near Edmonton, emits the pollution equivalent to about a third of the existing oil sands operations—but that plant receives scant attention from environmental protesters.

With the world’s largest coal reserves, the U.S. will remain a major player in the global coal trade. The industry is proposing to build six new coal export terminals in the Pacific Northwest. Environmentalists largely credit coal with killing proposed cap-and-trade regulations during Obama’s first term, says Mary Anne Hitt, who heads the Sierra Club’s Beyond Coal campaign. The legislation found stiff opposition from Democrats in traditional coal-mining areas along with the railway industry, which traditionally makes half its profits from coal, and coal-hungry utilities in the southeast. “Most of the postmortem analysis on the climate bill was that it was because of the coal lobby,” she says.

The problem with focusing solely on Keystone XL is that it does nothing to deter demand for fossil fuels like coal and oil, say industry experts. Nor will blocking Keystone stop oil sands development. “It will increase costs a bit, so maybe a little more oil stays in the ground,” says Andrew Holland, a senior fellow for energy and climate with the American Security Project. “But it will be at the margins.” If activists were serious about finding the most effective way to combat climate change, say several environmental analysts, they would push for a price on carbon, developed jointly between Canada and the U.S., that would put a premium on all carbon-intensive fuels, not just oil sands crude.

Despite Keystone’s role as a flashpoint for the discussion over climate change, its true appeal among environmentalists is as a political tool, says Holland. In pushing Obama to veto the pipeline, activists have found one of the few environmental issues that can successfully make an end run around America’s often slow-moving political system. “It’s arbitrary that we’re choosing to go after the tar sands versus the Venezuelan heavy oil area,” he says. “For the environmentalists this is about the fact that you don’t have to convince a majority of 435 members of the House and 100 senators. You don’t have to convince the American people or the Canadian government. You just have to convince the President.”

That may be the real symbolism of the pipeline: For an environmental movement desperately in need of a victory, Keystone represents an easy win—even if it’s a loss for the environment.