How did the Keystone XL Become Such a Big Deal?

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The Republican takeover of Congress has marked a new phase in the ongoing fight over the  Keystone XL, a proposed oil pipeline from Canada to the Gulf Coast. After regaining control of the Senate, one of Mitch McConnell’s first acts was to try to pass a bill in support of the pipeline. Democrats, in turn, responded with a successful filibuster.

In theory, the debate hinges on the origin of the oil, since extracting oil from Alberta’s so-called ‘tar sands’ is believed to be more environmentally harmful than extracting oil from competing sources. The process itself is also very energy intensive: until recently, such oil wasn’t even considered part of the global oil reserve because it was too expensive to extract. Technological advancement and changes in oil prices, however, have changed that.

That change opened up the possibility of exploiting the oil sands, bringing into play a tremendous amount of potential energy. Such a tremendous amount, that noted climate-scientist James Hanson has said that if Alberta’s oil is extracted and burned, it would represent “game over for the climate”.

For environmental groups, that piece in The New York Times gave special urgency to the fight against Keystone XL. But two other factors played at least as important of a role.

First, the Keystone XL pipeline was prosed in 2008. That, as you might remember, was a Presidential election year. Climate change activists quickly saw that Keystone XL gave them an opportunity to pick an argument early on during a new administration. Importantly, both major-party nominees – Barack Obama and John McCain – were already on record as believers in the science of global climate change and as advocates of implementing some sort of a price on carbon. Environmental groups had reason to believe they would have an ally in the White House and thought Keystone XL would give them a chance to bring some productive pressure to bear.

In other words, it was an opportunity to help set the agenda.

Second, because the proposed pipeline crosses an international border, the fight over Keystone XL gives a rare privileged position to the White House. Often, the details of energy policy run through obscure Congressional committees, executive departments, court cases, and gubernatorial desks. Keystone XL was different; it had to be approved by the President. This created a rare single leverage point on a tangible piece of energy policy.

Environmental groups saw an opportunity for a show of strength. Unfortunately for them, they miscalculated.

If climate-change activists had been able to stop the pipeline, it would have shown that the movement was capable of exerting a new level of influence. Instead, the fight rapidly reverted to old tropes.

Republicans, never warm to the science of climate change in the first place, were unwilling to credit Hanson’s argument that the new pipeline would usher in the apocalypse. Probably, in part, for the very good and relevant reason that Keystone would do no such thing.  Looking for a symbolic victory, opponents of the pipeline purposefully obfuscated the fact that Keystone is hardly the decisive factor in whether or not Alberta’s oil sands are exploited. There’s also a competing overland route to the Pacific, as well as alternative pipelines and railroad lines into the United States.

Pipeline or no pipeline, if the price of oil remains high enough – and in the absence of a tax on carbon – the Alberta oil sands will be exploited. In other words, while the climate-change argument against developing the oil sands might be sound, the relevance of that argument to the construction of the Keystone XL pipeline is dubious. Unable to win a quick victory, opponents of the pipeline risked that contradiction becoming a problem.

Ultimately, the same thing that led environmentalists to pick Keystone XL as a symbol turned out to be the movement’s major liability: Barack Obama has no place to hide. While opponents of the pipeline thought they could leverage their influence over the President, pipeline proponents quickly made sure to raise the political costs to the President of blocking the pipeline.

If opponents of the pipeline exaggerated the dangers of building it, proponents exaggerated the benefits. They argued that the pipeline would create thousands of jobs – omitting the fact   that only dozens of those jobs would be permanent. (Admittedly, this isn’t unusual for construction jobs, which might be a good reason not to champion short-term construction projects on the basis of job creation.) Proponents also made a big deal out of the idea of oil security and argued that Keystone XL would help bring down energy prices in the United States – a dubious claim that ignores the economics of energy markets.

In the end, the only thing the fight accomplished was to raise the political dangers associated with a decision that has relatively low costs and relatively low benefits. Not surprisingly, the White House responded by putting off the decision as long as possible. Perhaps they’re waiting for the issue to become less contentious – a drop in energy prices over the last year brought on by the development of shale gas in the United States has certainly made the pipeline less relevant. Perhaps they’re waiting for the right moment to use it as a bargaining chip. Perhaps, as I increasingly suspect might be the case, they’re tired of GOP opposition and appreciate the opportunity not to give in to Republican pressure.

Either way, the politically contentious but substantively less interesting question of whether or not to build the pipeline has distracted from the much more interesting question of how to build the pipeline. Environmental groups have spent a lot of energy on arguing that building the pipeline is risky, but they have spent little time arguing for ways to make it less risky. If they ultimately lose the fight, and Keystone XL is built, they will have little say over how its built and over how potential liability for spills is allocated.

That might turn out to be a colossal mistake. Just as it was a strategic blunder to transform the fight over Keystone XL into a show of strength when they weren’t ready for one.

In the long run, if climate change activists want to have more success, they’ll have to do a better job at picking their battles. They’ll also have to do a better job at picking their allies.

Follow Pedro on Twitter @IamPedroA.

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One thought on “How did the Keystone XL Become Such a Big Deal?

  1. The Keystone Pipeline from Hardisty Alberta to Cushing, Oklahoma has been in operation for 5 years. The XL from Cushing to the Texas gulf is almost COMPLETE. It is only the Parallel route the Extension Line (XL) that is being 'debated'….and this is a slightly different route, to pick up Oil from Montana and North Dakota, joining the EXISTING cross-border Keystone Pipeline, at Steele City, Nebraska.. The Oil that this EXTENSION pipeline would handle is NOW being shipped by rail and tanker truck….thus it Has NO IMPACT on what the Alberta Oil Sands (ain't NO TAR there) put out, only that it will pick up American Oil and reduce the possibility of Rail and Road environmental spills. The ONLY people being screwed by the alleged "Environmentalists" and Obama…are….AMERICANS. Enjoy it…and LEARN THE FACTS.

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