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Sep 19, 2011

What’s Lighting Up the Web: The Keystone XL Pipeline

 

Over the last month, throngs of environmental activists around the country have protested the possibility of an expanded oil pipeline that would snake 1,661 miles across North America, from Hardisty, Alberta to the Gulf of Mexico. Over 1,000 protesters were arrested outside the White House in Washington, D.C., alone.

First proposed by TransCanada Corporation in 2005, the Keystone XL pipeline would move 435,000 barrels of oil from the Alberta oilsands every day.  Countless journalists, bloggers and activists have written about the security and environmental concerns regarding this pipeline expansion. One key question stands out and is at the heart of the debate: what implications would an expanded pipeline have on U.S. dependence on oil—foreign and otherwise?

About half of the oil we import comes from the western hemisphere. And half of that (25 percent of all imports) comes from Canada. Many proponents of Keystone XL claim that the pipeline expansion would greatly increase that number. Given our friendly relationship with our northern neighbors, this looks, ostensibly, like a rosy picture.

But, in a recent blog post, Peter Lehner of the Natural Resource Defense Council argued against the notion that Keystone XL would make a dent in U.S. reliance on non-Western oil:

Once the tar sands oil hits the transportation network in Port Arthur, it can go anywhere in the world. TransCanada, the company behind the Keystone XL pipeline, told regulators that 90 percent of the pipeline’s initial capacity would go to six shippers. Those shippers include Shell, Total, and Valero—the largest fuel exporter in the United States. Their statements to investors and regulators leave no doubt they plan to use tar sands oil to produce diesel fuel for export.

The Keystone XL’s tar sands oil will be exported, because America doesn’t need it. Our nation is already a net exporter of finished petroleum products. That’s why a good deal of Keystone’s capacity will end up on the international market.

Michael Levi, writing for the Council on Foreign Affairs, responded to Lehner’s logic in his recent piece, “Separating Fact from” Fiction on Keystone XL”:

Advocates have started noting that Gulf refiners are likely to export diesel made from Canadian crude….That sounds correct to me, but I don’t see why it matters. U.S. demand for refined products is tilted toward gasoline; European demand is biased toward diesel. As a result, the United States ships diesel to Europe, and buys gasoline from it. Canadian oil would increase the amount of U.S. gasoline that is produced in the United States, which is to say, it would decrease imports.

For three decades, Rocky Mountain Institute has focused on identifying pathways to reducing U.S. dependence on oil—foreign and otherwise. Last week, we featured highlights of our latest analysis in our new Reinventing Fire infographic, to be further explained in the publication of Reinventing Fire: Bold Business Solutions for the New Energy Era, slated for release later this fall.

In 2008, RMI’s cofounder and Chief Scientist Amory Lovins wrote about the proposed Trans-Alaska Pipeline System that would cut through the Alaskan National Wildlife Refuge. His message is just as relevant today with regard to Keystone XL:

Protectionism distorts relative prices by taxing foreign oil (violating free-trade rules) or subsidizing domestic oil (suppressing efficient use). Both approaches weaken competitiveness. Both illogically suppose the solution to domestic depletion is to deplete faster—or as David Brower said, “strength through exhaustion.”

By substituting resources that do oil’s tasks better and cheaper, the U.S. can lead the world beyond oil. Face facts: America’s oil output peaked in 1970 and Texas is now a net importer of oil. Let’s get on with what we can do together, better than anyone: saving oil quickly and depleting it slowly.

Where do you stand in this debate?

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