At least now we have a settlement to the seven-year Keystone XL pipeline debate. The question was whether the U.S. government would allow Trans-Canada to build a pipeline from Alberta through the center of the United States to connect with existing pipelines that end at refineries along the Gulf of Mexico. The answer—after seven years of maybes —was no.
Keystone’s opponents argued that the pipeline would contribute to environmental degradation, while its supporters trumpeted its potential economic benefits and job growth. In truth, however, the Keystone debate represented the worst in American political ideological entrenchment. Neither the environmentalists nor the economic minded advocates had the facts on their side.
To the environmental movement, Keystone became a red line in the sand in the fight against fossil fuels. However, they have not shut down production in the Canadian tar sands with this victory, nor have they limited the amount of oil refined on the Gulf Coast. For seven years, the tar sands were exploited without a pipeline, and this will continue. Moreover, oil now may be sent to Canada’s west coast for eventual shipment to China, where emissions standards are significantly more lax than in the United States. The Gulf Coast refineries, which have been operating at capacity for months, will just continue to import oil via emission-heavy tankers from Saudi Arabia and Nigeria, because transportation costs from there are lower.
For the economic advocates, Keystone represented a vision of an American economy transformed into an energy-producing powerhouse with hundreds of thousands of new jobs. Every study indicated that the pipeline construction would provide, at most, 20,000 temporary construction jobs and just 35 permanent jobs. In fact, an analysis I conducted in 2013 that compared the Keystone XL project to the only similar large-scale pipeline project in recent American history, the Trans-Alaska pipeline, revealed that many states would in fact see an eventual net rise in unemployment consistent with classic boomtown effects.
In truth, each side ignored the real facts. The pipeline would have helped make oil transportation safer and more efficient. Pipelines have significantly better safety records than trains when it comes to transporting oil, and just recently we saw two derailments in Wisconsin: An ethanol-carrying train spilled 20,000 gallons into the Mississippi River, while the other only spilled 1,000 gallons of crude onto land. Only. Most of us have seen the startling pictures of crude oil rail car explosions. There is a vast web of rail lines carrying crude across the United States. Environmentalists should have fought for pipelines in place of rail.
Similarly, pro-business advocates should have made the real argument in favor of Trans-Canada’s application: Free markets. Even the environmental impact statement and Hillary Clinton’s State Department found no environmental reason to reject the pipeline. So the true argument for the pipeline was that, absent compelling reasons, government should not have the power to select winners and losers.
The biggest losers of the entire seven-year process are Trans-Canada, which was summarily humiliated by the Obama Administration in a very public press conference, and the U.S. economy. Domestic and foreign corporations who hoped to invest in energy infrastructure projects like pipelines, refineries, liquefied natural gas terminals and deep-water ports in the United States understand the message of the Keystone XL debacle: The United States is not currently open for business.
Farewell, then, to a debate we never really had.