The Keystone XL Pipeline: The Two Sides

As an environmental advocate, I generally side with the greener options as I believe that they are an investment for our future. However, we must not forget that environmental justice and social justice go hand to hand. Not every pro-environmental decision is an advantage to society and the economy. The controversy following President Joe Biden's decision to cancel the Keystone XL Pipeline was related to its social and economic effects. Many were happy for his commitment to the environment, while others believed it was a financial mistake. For this blog, I decided to see this event through the lens of both sides in order to fully understand the controversy. As environmentalists, we want people to hear our thoughts, so we must also listen to the opposer.

The Current Keystone Pipeline

The Keystone Pipeline transports tar sand oil from Alberta to the middle and end of the United States. Alberta gets these large amounts of crude oil from the Canadian Boreal forest and has been delivering oil since 2010 with TransCanada. Tar sand oils contain a sticky type of petroleum called bitumen, which gets converted into fuel. To access tar sand oil, the industry digs up and strips forests. The amount of byproducts produced from drilling is immense and get disposed of in tailing ponds that contain severely toxic contaminants. Along the Athabasca River in Alberta (see image below), is one of the world’s largest collections of tailing waste ponds which measures up to 500,000 Olympic swimming pools! The environmental management of tailing ponds is another crucial issue as they exist indefinitely and occupy a large space. 

Unfortunately, most pipelines go through First Nation lands which end up destroying their homes and the bio-diverse environment they depend on. In an attempt to resolve conflicts, the oil sands industry works with local indigenous people to provide them with opportunities. For instance, some First Nations have become partners with oil sands projects to obtain a stable job, grocery stores, housing and more for their community.

On July 8th, 2015, was the 5th anniversary of the original Keystone pipeline, which many celebrated. One significant highlight of the Keystone pipeline included the millions it paid in property taxes to counties, township, and natural resource districts along its route. TransCanada also claims to have contributed to alternative energy generators as some of its pipeline pumps used wind farms.

The Introduction of the XL Keystone Pipeline

TransCanada introduced the Keystone XL pipeline which would carry barrels of bitumen from Alberta to Texas in July 2008 (seen image below). The extension would increase the system’s capacity from 15,0000 to 830,000 barrels of oil per day. The Alberta government insisted that the construction would create 15,000 jobs, as well as boost the economy. 

From 2009 to 2011 many environmentalists started protesting against the pipeline extension due to its negative environmental effects. Demonstrations were held at the White House and the Parliament pleading the governments to reconsider their decision. Climatologists such as James Hansen believed tapping all of Canada’s oil reserves would result in irreversible carbon emission effects. An increase in the production of tar sands results in the warming of the planet which would be a "game over for climate change".

The construction of the Keystone XL has launched and halted a lot through the years. Obama decided to veto the bill which approved the construction of the Keystone XL in 2015. When Trump came into office, he signed an executive order to approve the pipeline extension. Indigenous groups and environmentalists continued to protest, but in April of 2020, the construction commenced. As soon as Biden was elected, he cancelled the Keystone XL U.S. permit, thus TransCanada (now TC Energy) suspended its construction.

The Albertian Uproar

When the cancellation of the Keystone XL pipeline occurred, it caused an angry uproar from Alberta. They stated that,"The Keystone XL pipeline would offer a safe, reliable, and environmentally responsible way to deliver crude oil from western Canada to refineries in the U.S. Gulf Coast.”while also reducing the reliance on OPEC. The Organization of the Petroleum Exporting Countries (OPEC) is a group consisting of 14 of the world’s major oil-exporting nations such as Iran and Saudi Arabia. In 2019, 74.9% of the crude oil reserves were held by OPEC countries. Thus, OPEC had a monopoly on the price of oil in the world market. Since Canada is not part of OPEC when U.S. imports most of its oil from Canada rather than from OPEC it receives more control over the oil price. It also reduces competition for heavy oils and has a low political risk for both countries. The sources of U.S. petroleum imports throughout the years can be seen in the graph below. Jason Kennedy, the premier of Alberta, states that oil exports from Canada to the U.S. share the commitment to environmental stewardship and combating climate change, whereas exports from OPEC do not. Hence why he stated that the Keystone XL Pipeline is an environmentally responsible oil transportation method. He argues that the U.S. becoming more dependent on OPEC for oil imports is a mistake and will weaken the Canada-U.S. relationship.

Alberta continues to fight for the pipeline extension as they would gain a lot from constructing the pipeline as thousands of new jobs would be created. Many First Nations who are involved in working with TC Energy would obtain contracting opportunities from the pipeline extension. Alberta already has the highest unemployment rate in the whole of Canada, and this cancellation would only worsen it. Most significantly, it would aid the economy by contributing approximately $2.4 billion to Canada’s GDP and would generate $7 million in property taxes in its first year of service. Specifically, Calgary needed the Keystone XL pipeline as a catalyst for economic growth and recovery during the pandemic. The Alberta government already invested $1.5 billion in the project and more in loan guarantees, now it looks like the investment is lost. Many argue that this was a foolish investment by the Albertian government, as the cancellation should have been expected.

The Cheers and Praise for Biden’s Decision

Biden cancelling the Keystone XL pipeline did not only come with criticism, many were happy to hear his decision, as it was a notable step for a greener future. The Keystone XL pipeline would have increased the use of crude oil, an energy source that requires more fuel, water and carbon emissions than conventional oils and gasses. An environmental review found that crude oil production creates 17% more carbon pollution than other oils. As discussed previously, it would create toxic runoff and would worsen the conditions in the Alberta's forests. An extension of the Keystone pipeline would also increase the risk of oil spills, which cause disastrous environmental messes.

The risk for local communities, especially First Nations, is a principal reason for opposing the Keystone Pipeline extension, hence why indigenous communities protested throughout the construction as seen below. First Nation groups in Alberta have already started to sue the government for damages from oil sands that occurred on their lands without their consultation in the past. The Keystone XL pipeline would ignore the Native American's treaty rights and run through several indigenous lands. With the pipeline passing through indigenous communities' lands, their water sources would be threatened by the dirty tar sand oil.  

Though some jobs were lost due to the cancellation, it is not as extensive as it seems to be. After Biden’s decision, about 1,000 people were out of their job, not the thousands as previously claimed. The Keystone XL Pipeline would have made approximately 10,000 hires, yet most were temporary and only 50 were permanent, a shockingly low number. The oil industry generates billions in profits, yet they have always made large yearly slices in their workforce, and 40% of their employers in the U.S. are paid minimum wage. Moreover, there are some claims that the Keystone XL Pipeline would have been worse for the economy, especially long term. The NYU Law School’s Environmental Law Center estimated that by burning tar sands oil the Earth’s temperature would increase by about 2 degrees Celsius, which could then cut the U.S. GDP by 2.5% due to the long term damages.

 
Most significantly, many believe that investing in the Keystone XL is a step back for the renewable energy sector, as it would set derail the conversation on incorporating alternative energies. Many said that the fate of the pipeline represents America’s energy future, as it would dictate how most of America's energy would be produce. With the pipeline construction cancelled, the focus can now be shifted back to finding new effective energy systems instead of continuing with oil sands production.

There is a lot hope for a sustainable future and the jobs it will create, especially in renewable energy. For example, the largest solar farm in Canada resides in Alberta and with the solar industry growing, it is estimated that there will be 70,000 new jobs for Alberta. The transition to renewable energies is promising, yet it will take time to surpass the economic value of the crude-oil industry.

Final Thoughts

The Keystone XL Pipeline has gone through a long journey of tears and cheers as the best choice continues to be debated. The battle between the people who want the pipeline versus those who want to stop the crude-oil industry is a never-ending discussion of short term and long-term results. The pro-pipeline side sees all the immediate positive effects the pipeline will have on the economy and politically. It will grow the economy, establish a strong political relationship and create the jobs needed at this time. The environmentalists see the horrors the pipeline will pose and how a cancellation will allow for a long-term benefit both environmentally and socially.

When I look at the Keystone XL Pipeline, I see the benefit in reducing the dependency on OPEC countries, not specifically for political reasons but also environmental ones. The overseas shipping of oil from OPEC countries to the U.S. increases carbon emissions due to the transportation needed. Studies also show that and ships transporting oil cause greater environmental damage than oil pipelines. On the other hand, I believe in the future of the renewable energy sector and know it is an industry worth investing in. Extending the Keystone Pipeline will reduce the need for energy production alternatives and would create many disastrous environmental events. Though Canada is trying to transition Alberta to the renewable energy sector, it is hard to see the economic benefit, as the initial cost is immense. The road to finding a middle ground is to continue research in finding cheaper energy alternatives that will be economically comparable to the oil industry. As we wait for the green future, we should continue to have open discussions where we understand and learn from the other side. 

 

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