Wednesday, January 7, 2015

3 simple reasons why Keystone XL is a bad idea (and what we should do when we approve it)

1. Allows precious North American petroleum resources to be sent to China

I’m not an anti-export guy. I actually think international trade, over time, is a good thing. But we have to think carefully when it comes to energy. Sometime in the next 50 to 150 years we will have to have moved from carbon-based energy sources to cleaner sources and renewables.  Allowing a North American resource, as nasty and cruddy as it is, to be more easily shipped overseas, especially to a major rival like China, seems un-wise. I was talking to my WWII-vet father-in-law about this and he said it reminded him of the stories of the USA selling scrap metal to the Japanese in the 1930s only to have it come back to us as bombs.

2. Oil prices will rise

Contrary to what many say, the additional supply from tar sand oil will not have the typical affect of increasing supply thus lowering prices. That’s because not all oil is equal. Tar sand oil is about the most difficult, and expensive, to extract and refine. It’s not like North Sea oil or West Texas oil or Saudi oil. That oil that is easy to get out of the ground and easy to refine. Because of the costs to extract and refine what essentially starts as a think tar-y sand, a barrel of tar sand oil needs to trade for upwards of $70-$80. Right now a barrel of oil is under $50.

3. Ignores the property rights of middle-Americans

It’s bad enough when the local or federal government imposes eminent domain to take land for roads or other interests that serve the common good. But here we have a situation where a company from another country is petitioning our government to allow them to use U.S. citizens' private land. Sure, some of those landowners are okay with it, especially with the bribes payments they'll receive. But not everyone is in favor.

Okay, I’ll admit it, I’m a knee-jerk-reactionary-tree-hugging-card-carrying-liberal. Except I’ve misplaced my card somewhere. I think I must have left them in the pocket of my cargo pants when I stripped down at Burning Man back in 1999.

Anyway, I’ve been to the anti-KXL rallies. I’ve written letters and all the other do-gooder crap. And I also think the main-stream green movement maybe picked the wrong "line-in-the-sand" issue with Keystone XL. What makes Keystone XL a bad idea is not the pipeline itself. Sure, every pipeline brings environmental risks, but there are so many pipelines crisscrossing the country all over the place, many in worse locations, that are older and are a greater risk to the environment. What makes Keystone XL bad is not Keystone XL itself but what it will lead to.

It’s thus a fairly complex issue and not a good political “sound bite” issue. It's easy to pick it apart with environmental studies that only look at the pipeline. And there is the constant argument over jobs. It’ll create lots of jobs or it will create few jobs. In an economy as large as ours the number of jobs this thing creates will be a rounding error regardless of whose estimates you use. And the real winners, the oil companies, stand to gain tens of billions of dollars. Yes, that is a billion with a ‘b.’ The math is easy, really. There are literally billions of barrels of oil locked up in those tar sands. By making it easier to get it out, they can sell it on the international market for $10-$15 more per barrel while saving a few dollars with cheaper shipping (pipeline vs rail or truck). At $20 per barrel times a billion or ten, the profits are amazing. That is who wins. Royal Dutch Shell. Exxon-Mobil. And PetroChina. The last one is the listed arm of state-owned China National Petroleum Corporation. I really don't like the idea of a Chinese government-owned company standing to reap a windfall while it despoils our environment to send refined oil back to itself. It's a huge subsidy and back in the good old days, when one country took the resources of another we called it colonialism.

Here's what we should do

But beyond all that, what I’d rather see is a way for both sides to get past their bullshit posturing and come together. Here’s an idea: If we approve Keystone XL, tax the shit out of that nasty dirty oil. Ship it to China for China to pay the export duties. Use that revenue to ramp up our wind, solar, and yes, nuclear, energy capabilities. Congress has to, HAS TO, get out of its current bi-polar mess and start to govern again. The Tea-party fascists need to go home. And yeah, we need new leadership on the liberal side too. Pelosi and Reed had their chance and we see what happened. They can go home and teach at some local university.

We need creative leadership in Washington DC not a bunch of demigods looking out for personal, party, and corporate interests. Remember, it's supposed to be "We the People..."