Tuesday, April 23, 2013

Keystone is not so simple

The debate over the proposed Keystone XL Pipeline has burst into a shouting match between two sides that are both exaggerating their claims. The public is left in the dust with an assortment of half-truths that don't come together to give an accurate picture. One of the purveyors of misinformation gave a speech to my school's Environmental Club. I gave an effort to counter some of his claims, but I don't think anyone in the audience was convinced that he was wrong.

Garth Lenz has really taken some beautiful photography that you should check out: http://garthlenz.photoshelter.com/. I don't know how our tiny club was able to get him to come to Davis from Canada to talk to maybe 15 people on a Thursday night, but it was certainly an interesting experience to have such a personal conversation with an activist. I think that I come across as a skeptical conservative in the company of Environmental Club, despite the fact that I consider myself an enthusiastic supporter of environmental issues. I guess the difference is that I don't see saving the environment as a goal in and of itself, but mostly as a means to achieving human prosperity.

I am not going to dispute the validity of most of the following statements, but they are by themselves very misleading:

Oil from tar sands is much dirtier than oil from conventional reserves.

Yes, the process is very dirty, and the illustrations from Lenz's photography paint a bleak image of the devastating effect of mining tar sands. Lenz says that extracting oil from tar sands is twice as bad as extracting conventional oil, but he leaves out the fact that it is burning the oil that is most of the problem-the total GHG emissions from tar sands are only about 15% more. Another thing to keep in mind is that tar sands should be compared to other new sources of oil for a fair perspective since the supply for much of the easy-to-reach oil has already peaked and we aren't discovering much more.

Building Keystone would be game over for climate change.

I would actually say that in some ways, this is the best argument against Keystone, but not because the statement is right on its own. The fact is, if we're going to significantly limit climate change, we need to keep fossil fuel in the ground. But the Alberta tar sands are just a small portion of the fossil fuels in the world, and even if we left them all in the ground, it would hardly make a dent in climate change. In fact, they contain less than 1% of the world's emissions, hardly a cause for thinking that exploiting them would be the end of the world.

The key to reducing emissions is to reduce demand for oil. Of course, cutting off supply would lead to higher prices and thus reduced consumption, but it appears that the pipeline would be profitable even with a reasonable price on carbon. This brings me to another point: if we had an appropriate rising carbon tax, then we wouldn't need to worry about whether or not Keystone would be worth it given its climate change impacts. Lenz did acknowledge that a carbon tax would be the best environmental policy. I am glad that he supports the Citizen's Climate Lobby and its efforts to implement a revenue-neutral carbon tax. However, I feel that the Keystone activists would be much better off campaigning for it rather than dithering against a relatively benign pipeline. I understand the sentiment that if Keystone gets approved, then that will just open the door to more fossil fuel projects. I don't think that stopping Keystone would do enough to dissuade industry from proposing other pipelines though, at least as long as oil is so expensive. I don't think that it is worth it to take the risk that oil companies will simply ship the oil by train or build a pipeline to China instead. The fact is, people do benefit from cheaper energy, and the increase in supply will bring cheaper energy.

Another half truth: there is no benefit to building the Keystone Pipeline. Only a couple of thousand jobs are created, and nearly all of them are short-term. Also, most of the oil is going to China anyway, so it won't benefit us.

Okay, I will admit that if more people knew the above, support for Keystone would go way down. It's true that building the pipeline would not be a great stimulus. "Job creation" should not be the basis for evaluating the merits of an energy pipeline. The point of Keystone is to deliver cheaper energy in a more efficient manner than trains or ships. If it took more of an effort to build Keystone, then the energy is not really much cheaper. If more jobs were necessary to maintain the pipeline, then it may not have been a profitable endeavor in the first place. As far as providing cheaper energy, fewer jobs should be celebrated, not scoffed at. Of course, I realize that politicians and the American people would love for everything to create jobs with no negative effects. Politically, it makes sense to attack Keystone because it won't really add any jobs, but that is simply poor economic reasoning. I have no problem, however, with calling Republicans out for pretending that building Keystone will somehow magically add hundreds of thousands of jobs and repair the economy.

Garth Lenz really flustered me with some of his statements about what was going to happen to the oil. He said that it would be piped to the Gulf of Mexico and then shipped off to China, so we won't see the oil anyway. The reality is that we all benefit from cheaper energy. Sure, Keystone would be embraced more in the US if it directly impacted the price of oil and made gas 20 cents a gallon cheaper (in reality, maybe gas will be 1 cent/gallon cheaper worldwide). But the US is not the only country full of people in the world. I still cannot believe that he told me that if Chinese people are better off from Keystone, then it does nothing to help the US. I would think that someone who cares about the global environment and who isn't even from America would not be so jingoistic as to basically say that Chinese people are inferior.

I don't want to endorse Keystone, but a majority of economists do support it. And contrary to what some activists (including Lenz) may say, not all experts endorsing the pipeline are paid off by the oil companies. In fact, my economics professor does research on reducing energy use and his Skype handle is something like "Taxcarbon". There are real drawbacks of building the pipeline and even bigger costs to exploiting the tar sands that should be considered. This does not excuse misrepresenting and exaggerating either the costs or the benefits of the project. In the big picture, Keystone is neither going to tremendously boost the economy or completely end hope of limiting greenhouse gas emissions to a reasonable level. Keystone is not an easy decision, but it is not all that important either.

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