One would think you can beat a dead horse only so many times. Using low oil prices this time, the Environmental Protection Agency is urging President Obama and the State Department to reconsider Keystone XL’s climate impact.
The State Department’s environmental assessment concludes that Keystone XL’s contribution to climate change would be insignificant because the oil will come out of the ground regardless of whether the pipeline is built. Indeed, it already is. The analysis included a scenario with sustained low oil prices where tar sands oil production would decline without Keystone XL because the higher costs of rail could make it too expensive to ship. EPA is urging the State Department to give that scenario more weight in light of low prices.
Here are three reasons to ignore the administration’s latest excuse:
- Even with low oil prices, still no impact on climate. Markets respond better than scenarios outlined in a report. Therefore it’s difficult to project how much Canadian oil would come out of the ground if pipeline capacity were unavailable because when such a valuable resource is available, innovators find ways to extract and develop it at lower costs. But even if the scenario were Keystone XL or nothing, the climate impact still would be minimal. Although tar sands oil is more greenhouse gas-intense than other oil on the world market, Keystone XL is still one pipeline in a world that relies heavily on carbon-emitting conventional fuels. Even if one assumes we are facing catastrophic warming, the carbon emissions from Keystone XL would be 0.2 percent of the “carbon budget” allowable to prevent such warming. But that’s not the case, which leads to the second point.
- Look at recent climate science, not recent oil prices. The administration should be more concerned with recent climate science that shows climate realities are far less threatening than the doomsday scenarios projected by climate models. Several peer-reviewed studies over the past few years have found the Earth is significantly less sensitive to carbon dioxide than the Intergovernmental Panel on Climate Change assumes in the climate models it builds to estimate warming. Thus, Keystone XL’s impact on climate change will be even less than any scenarios projected by the State Department or EPA, which already are minimal.
- Oil prices are long-term. Industry makes investment decisions looking decades into the future, not simply based on short-term projections. Although it certainly is possible low oil prices could postpone Canadian tar sands production and prohibit Keystone XL from reaching its peak volume in the near future, oil prices could rise as quickly as they fell. Businesses are much better equipped and flexible to deal with changing economic circumstances than short-sighted politicians in Washington. In fact, the EPA even acknowledges this in its letter to the State Department, writing, “The overall effect of the project on oil sands production will be driven by long-term movements in the price of oil and not short-term volatility.” American Petroleum Institute vice president Louis Finkel noted that oil prices were $40 per barrel when TransCanada was initially moving through the application process.
Keystone XL is environmentally responsible and a victory for the economy. Let’s quit delaying and let Americans start building.