Keystone cop out marks divide

Robert Bachman, a friend and a distinguished reservoir engineer from Calgary, sent me an e-mail on 11 November 2011: ‘Michael, I am really looking forward to your comments on the Keystone debacle. You know as well as I do that the US has just stabbed their best friend in the back. It will take a while to sink in here in Calgary. Forcing Canada to more international markets may be a good thing for us in the long run. Not so sure it is good for you. Plan B for the US: kiss and make up with Hugo.’

Bob is a gentle soul, not prone to hyperbole. Something must have boiled over in him to send that message. Here is my take. The Keystone pipeline debacle shows that the ideological divide in America’s climate and energy wars has now become a gaping chasm. It is an all-out war, with no prisoners.

For economic and energy pragmatists TransCanada’s 1700 mile Keystone XL pipeline, slated to carry at full capacity 800,000b/d from Canada’s Alberta tar sands to US Gulf refineries, was a no brainer. The US imports about 60% of its 20 million b/d needs, much from far away, unstable and even unfriendly regimes such as Venezuela under Hugo Chávez. What could be better than to tilt the balance towards our closest friends in Canada, from where the US already imports 2.5 million b/d?

Standing in the way were environmentalists and movie stars, in many cases with outrageously silly arguments, that decried the would-be potential risks on drinking water aquifers, already under thousands of other oil & gas pipelines criss-crossing the country.

When thinly disguised ideological objections are in the background, the superficial public arguments that politicians employ can be off base to outright silly as in a 5 October 2011 letter written by senate majority leader Harry Reid to secretary of state Hillary Clinton, objecting to the Keystone pipeline. Clinton’s department was supposed to make the decision. Reid wrote: ‘The proponents of the pipeline would be wiser to invest instead in job-creating clean energy projects, like renewable power, energy efficiency or advanced vehicles and fuels that could employ thousands of people in the US rather than increasing our dependency on unsustainable supplies of dirty and polluting oil that could easily be exported.’

He continued: ‘The fastest and best way to break our addiction to oil and free our country and our economy from the dangerous grip of Opec is to develop and deploy new technologies and clean affordable alternatives that destroy demand for oil not exacerbate it.’

In just a few sentences Reid presented at least five huge misinformations that have fed the ideological divide. Clearly Reid wants a world free of fossil fuels, socially engineered to his liking.

1. Any rudimentary engineering economic calculation irrespective whether one believes in man-made, CO2-induced global climate change, peak oil or geopolitical calamities, clearly shows that fossil fuels economics are significantly superior to any alternatives such as solar and wind. The entire 21st century will continue to be dominated by fossil fuels. Countries that do not recognize this and do not put it center stage of national policy will pay a huge price.
2. ‘Renewable power’ is not an alternative to oil or vice versa. We do not use any oil to speak of for power generation and, essentially, we do not use anything but oil for transportation. This is a cardinal mistake, but a legacy of 40 years of policy.
3. ‘Advanced vehicles’ – what is he talking about? Vehicles have improved dramatically over the past 40 years but gasoline demand has been going up (slowed down only by economic recession). We manage to find new uses for transportation. ‘Fuels’? Surely he is not talking about the negative energy balance corn-based ethanol or the non-existent cellulosic ethanol.
4. ‘Addiction to oil’ is a slogan used by people in both parties that is a cheap rallying cry but quite ignorant. Yes, a rich nation like the US will use more oil than others. But what is often absent from this debate is the fact that the use of energy generates wealth: energy and energy abundance is what separates rich from poor countries.
5. The last time I looked, Canada, the US’ closest ally, was not a member of Opec. Oil from that country should be a national policy, encouraged not rejected.

Well, the preposterous becomes reality. On 10 November the Obama administration announced it would 'consider alternative routes for the Keystone XL oil pipeline to avoid ecologically sensitive areas of America¡¦s heartland'.

The decision was interpreted by friend and foe alike as a move to delay any final decision until after the 2012 election. Jack Gerard, president of the American Petroleum Institute said: 'This is clearly about politics and keeping a radical constituency opposed to any and all oil & gas development in the president¡¦s camp in 2012. It appears there is only one job that is being focused on here'.

All ignored the elephant in the room: China would love to have Canada's oil.

This whole affair has been an outrageous spectacle from the beginning. But its denouement points to the unfortunate polarization of American politics and the forcing of people, reasonable people to take sides. I am convinced it will become a defining issue in the coming presidential election.

For Canada, prime minister Stephen Harper took less than 48 hours to utter the obvious: Canada will seek new markets in Asia, such as China. OE

Michael J Economides is a professor at the Cullen College of Engineering, University of Houston, and editor-in-chief of the Energy Tribune. The views expressed in this column do not necessarily reflect OE's position.