Keystone XL: A Good Idea for our Long-Term Energy Strategy?

Debate surrounding the controversial Keystone pipeline expansion proposal speaks to the nation’s larger debate about energy security and climate change. Does friendly Canadian oil satisfy our national security needs? Is it worth the risks to our economic security?

“The State Department’s decision on whether to permit this pipeline represents a critical choice about America’s energy future. This pipeline is a multi-billion dollar investment to expand our reliance on the dirtiest source of transportation fuel currently available. While I strongly support the President’s efforts to move America to a clean energy economy, I am concerned that the Keystone XL pipeline would be a step in the wrong direction.” (Henry Waxman (D-CA), former Chairman and current ranking member, House Energy and Commerce Committee in a letter to Secretary Clinton)

The House subcommittee on Energy and Power is considering legislation to push the State Department to approve the Keystone XL pipeline project, which would increase the pipeline’s capacity by about 500,000 barrels a day at a cost of $7 billion U.S. dollars by November 1.  The project, whose approval was once considered inevitable, is staunchly opposed by environmental groups and many state and federal legislators, such as Waxman.

At the heart of this debate is America’s energy future, and whether investment in this project represents a sound strategy in handling our energy challenges. And more to the point: is the project a sound investment in our national security, as many argue? While it may lessen our dependency on Middle East oil, the extent to which and at what point—some estimates say 2016, other 2030—it will is highly debatable (see here and here for arguments on its impact). Either way, 500,000 barrels of crude a day is just 5% of our current daily crude oil imports.

Another major element of the controversy is the nature of the oil itself. Bituman (also known as oil sands or tar sands) is “unconventional” petroleum that is both challenging and water-intensive to extract and energy-intensive to refine. Only recently has technological advancement made it a viable, affordable energy source.

Yet the economic impact of the project is up for debate. While proponents such as Karen Alderman Harbert, President and CEO of the U.S. Chamber of Commerce’s 21^st Century Energy Institute, suggest it will create 250,000 jobs and help cut gas prices, others tell a different story. Philip Verleger, oil market economist, claims that Canadian company TransCanada Corp. intends to use the pipeline to extract $5 billion more from Americans each year. If he is correct, the pipeline will contribute to price increases “at the pump”—adding to the cost of doing business and stymieing American economic growth.

Questions of greenhouse gas emission and water safety also remain. Environmental groups will tell you that it releases up to three times more greenhouse gases in production than regular oil, while oil companies say only 5-15% more. Proponents of the pipeline argue that this is a moot point, however, citing that the oil will be drilled whether or not it is purchased by the U.S. (China is showing  interest in buying, as well). Either way, increasing levels of greenhouse gases increase climate change, which directly impacts our economic security (see our newest report on the topic here).

Environmentalists and farmers alike are worried about the safety of our vital natural resources. Of particular concern is the Ogallala Aquifer, a major source of drinking water and irrigation for the High Plains region and beyond, directly impacting states from South Dakota to Texas. Disruptions to this water supply from leaks in the pipeline could upset agricultural production on a large scale, negatively impacting the American agriculture industry and food supply, while increasing pressure on our already-stressed national water supply. Recent leaks along the already-existing portion of the pipeline lend credibility to such worries, despite claims by TransCanada that it will be the safest pipeline ever constructed.

These very real concerns about pipeline safety aside, the main problem with the expansion is that it represents a lack of vision. Broad thinkers recognize that America must develop a clean energy economy—one that is based on safe, reliable, and renewable resources—in order to enhance our national and economic security, protect our resources, and ensure opportunity for future generations.

This essential component to our economic growth and our national security (climate change is a stated national security “threat multiplier” by the Department of Defense) requires dedication, time, and resources. Piecemeal solutions such as Keystone XL may barely scratch the surface of our national security goals by lessening our dependence on Middle East oil, but fail in our efforts to generate clean, safe, and reliable energy. For a discussion on the necessity of safe and reliable energy, see our Climate Security Index.

Meanwhile, such distractions suck valuable resources away from technology development that has the potential to utterly transform our economy for the better. Long-term, we need energy sources that can meet our increasing demand without contributing to climate changes that affect everything from the world food supply to human migration patterns. Keystone XL addresses neither of these looming necessities.  Why not choose to invest in our future, building our clean energy economy today?

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