Asking the wrong question about Keystone XL

Oral Testimony to the US Congress Subcommittee on Energy and Power hearing entitled

“H.R. 3, the Northern Route Approval Act.”

April 10, 2013

The State Department assumes that future production of the Alberta oil sands will be the same even if it denies construction of Keystone XL. Yet a great deal of evidence contradicts this assumption. Ironically, much of this evidence comes not from environmentalists, but from industry analysts, Canadian politicians, and even the oil sands producers themselves.
Quite simply, plans to triple oil sands production over the next two decades cannot be realized without increased pipeline capacity. In addition to Keystone XL, two key proposals seek to ship Alberta bitumen across the province of British Columbia. These are the Northern Gateway of Enbridge and the Trans Mountain expansion of Kinder Morgan. I happen to live in Vancouver, where I am a professor of energy economics, former chair of the utilities commission, and a frequent policy advisor on energy and climate.

Industry analysts increasingly rate the probability of these two projects at below 50% - and with good reason. Aboriginal bands along the overland routes and on the coast, where oil tanker traffic would increase dramatically, are strongly opposed. And because these native bands have never signed treaties to extinguish their land title, they have a powerful legal position in the Canadian courts. Just as important, there is strong public opposition in BC to both projects. The City of Vancouver opposes use of its port to serve Kinder Morgan and vows to do everything it can to block the project. And the provincial opposition party vows to stop Northern Gateway if it forms the next government – it has a 20 point lead in opinion polls, and the election is next month.

So, if we ask if denial of Keystone XL will slow oil sands development, and the carbon pollution it causes, the answer is a resounding yes. Without these three projects, oil sands expansion will be slowed as producers scramble to develop less effective, more costly alternatives, such as rail.

But this is not the most important question to ask when considering a project like Keystone XL. We must have the honesty and political courage to ask a much more important question. We must ask what we must be doing today to slow the global rise of carbon pollution – and ask what role the decision about Keystone XL can play in this difficult, but hugely important challenge.

This is not an easy question to answer, or even to ask. Oil industry executives don’t want to talk about it. Most politicians avoid it, as does the mainstream media. They prefer to discuss the jobs and wealth from extracting more fossil fuels from the earth’s crust. But closing our eyes and procrastinating is not the answer. And the more we procrastinate, the greater the harm to ourselves and our children, and the greater the cost of changing course when we can no longer procrastinate.

Rising carbon pollution in our atmosphere is a classic tragedy of the commons. Since each source of carbon pollution is only some percentage of the whole, each polluter argues that it might as well continue – even expand. China says it should burn coal as long as North America still burns fossil fuels. Canada says it should develop oil sands as long as China still burns coal. Next, with this logic, Venezuela will say it should develop all of its enormous deposits of heavy oil. Given the incredible amount of fossil fuels in the earth’s crust, scientists have been quite clear that this game’s end state is a dramatically hotter, more unstable planet than the one we have based our economies on – a planet we are hurtling toward with great momentum.

If they are honest about our tragedy of the commons conundrum, US political leaders know that domestic efforts to reduce carbon pollution are meaningless if they are not taken in concert with serious efforts by others. They know that we cannot ask, and yes pressure, others to act if we in North America are not acting. Yet Canada, and the province of Alberta in particular, are not doing their share.

In 2009, President Obama stressed the urgency of US action as part of a global effort, and on that basis set a target for the US to reduce its emissions by 2020 to 17% below their 2005 level. Independent sources now confirm that the US is on track to achieve its target. In solidarity, the Canadian government promised to achieve the same target for 2020. But just last year, the Canadian Auditor General reported that emissions in 2020 are likely to be 7% higher rather than 17% lower. The main reason, not surprisingly, is the projected oil sands growth.

The Keystone XL decision provides the ideal opportunity for the US government to signal to its allies, trading partners, and the rest of the world that the climate tragedy of the commons cannot be addressed if we are not pulling together. It cannot be addressed if we accelerate the extraction of fossil fuels from the earth’s crust. It cannot be addressed if countries like Canada are free-riding on the efforts of countries like the US.

In denying Keystone XL, the US government would explain to Canada that it is extremely concerned with rising carbon pollution and with the fact that it is incurring costs to keep its pollution reduction promises, and expects other countries to meet their promises too. It should also explain that it will next be talking to other countries, such as China, about free-riding on the efforts of others. In solving this extremely difficult, global, climate, tragedy of the commons, we should expect nothing less from the world’s most powerful nation.