The Bad News: TransCanada Says a Delay in Pipeline Approval to 2012 May Not Kill It
Protesters against the construction of the Keystone XL oil pipeline demonstrate before the arrival of President Obama on October 25 in San Francisco.
Yesterday, White House Press Secretary Jay Carney tried to pass the buck on the Keystone XL tar sands pipeline decision, saying, “This is a decision that will be made by the State Department.”
Today, in an interview with Omaha station KETV (video here), Obama (aka The Decider) walked that back entirely:
The State Department’s in charge of analyzing this, because there’s a pipeline coming in from Canada. They’ll be giving me a report over the next several months, and, you know, my general attitude is, what is best for the American people? What’s best for our economy both short term and long term? But also, what’s best for the health of the American people? Because we don’t want for examples aquifers, they’re adversely affected, folks in Nebraska obviously would be directly impacted, and so we want to make sure we’re taking the long view on these issues.
We need to encourage domestic oil and natural gas production. We need to make sure that we have energy security and aren’t just relying on Middle East sources. But there’s a way of doing that and still making sure that the health and safety of the American people and folks in Nebraska are protected, and that’s how I’ll be measuring these recommendations when they come to me.
Well, the long view is that dirty fossil fuels, like the tar sands, are not merely an unsustainable source of jobs, but they are essentially fatal to efforts to protect the health and well-being of Americans (see James Hansen slams Keystone XL Canada-U.S. Pipeline: “Exploitation of tar sands would make it implausible to stabilize climate and avoid disastrous global climate impacts”).
The reporter asked Obama about “the potential for jobs, does that play into the equation at all?” The President answered:
It does, but I think folks in Nebraska like all across the country aren’t going to say to themselves, “We’ll take a few thousand jobs if it means that our kids are potentially drinking water that would damage their health or rich land that’s so important to agriculture in Nebraska are being adversely affected” because those create jobs, and you know when somebody gets sick that’s a cost that the society has to bear as well. So these are all things that you have to take a look at when you make these decisions.
This certainly sounds like the president is giving himself rhetorical room to delay the decision (to do a better environmental impact statement or examine alternative routes) or kill the pipeline outright.
Canada’s National Post reports that the “worst-case scenario” of killing the pipeline would be “stranded oil sands — for years”:
The reality is that anything short of a go-ahead in December for Keystone XL would plunge the oil sands sector into disarray until new solutions move forward. The worst-case scenario? Stranded oil sands — for years.
Keystone XL, with a capacity to carry up to 830,000 barrels a day from Alberta to Texas, was due for startup in early 2013. There is no backup on the same scale or timeline.
“Everybody in the industry is thinking about this,” said Bob Dunbar, president of Strategy West Inc., an oil sands consultancy based in Calgary. “Keystone XL is not the only solution, but it is a very elegant solution and it really would have an impact on the industry if it doesn’t proceed in a timely way.”
Even optimists can’t ignore that the pipeline is becoming politically toxic: Anti-Keystone protesters are dogging Mr. Obama everywhere he goes; donors are threatening to pull campaign funding if he approves it; members of the Democratic party are rallying against it; allegations of conflict of interest have strangely emerged; Nebraska has called a special session of the state legislature to discuss whether to block it.
Well, the worst-case scenario for killing the pipeline certainly beats the worst-case scenario for building it!
Fearing Obama may actually do the right thing, or the half right thing, Transcanada suggested today that a delay to 2012 might not be fatal. As E&E News PM reports:
Executives at Alberta-based TransCanada Corp., which has enlisted the oil and gas industry’s lobbying muscle to help surmount environmentalist push-back against XL, walked a fine line on the fate of the pipeline during a third-quarter earnings call. As they reiterated earlier expectations of a State Department decision on the Canada-to-U.S. oil link by year’s end, the TransCanada officials noted that whether a further delay would scotch the project depends on commitments with shippers.
While there are sunset clauses in those shipping contracts for Keystone XL, TransCanada pipelines President Alex Pourbaix said today, “As long as we receive our approval … we do not expect our shippers to rely on those sunset provisions any time in the near future.”
At the moment, TransCanada executives noted, their customers lack an alternative method to ship Canadian oil sands crude that approaches the scale of the $7 billion XL link. But “if the administration delays the project long enough,” Pourbaix posited, those shippers “are not going to support us anymore.”
The bottom line is that the President’s decision will have a big impact on the tar sands development — delaying rapid exploitation of this climate-destroying fuel, perhaps long enough for this nation Canada, and the entire world to come to its senses on the risks of unrestricted emissions of greenhouse gases.
We need to making large investments in clean energy to start cutting emissions now, not diverting staggering amounts of capital and labor to dirty energy, a move that doesn’t merely waste those assets but actually causes net harm to society and ultimately requires even greater sums of money in the future to (try to) undo the impact of all that pollution.