Monday, March 11, 2013

NRDC blasts Keystone

I just got an email from a guy at the Natural Resources Defense Council, an NGO I support. They totally firebombed my theory about the Keystone, and their arguments make sense.

First and foremost, they argue that the "Keystone XL pipeline is an absolutely necessary step for tar sands expansion." I had heard a lot about how if they don't build the pipeline through the US, they'll build a (presumably more expensive) pipeline west toward Vancouver. However, the NRDC believes that pressure from groups in Western Canada will keep that from happening. This blog entry from late 2011 says that First Nations groups are opposed to it, and apparently they control a lot of the land needed to build it. Another blog entry from March 2012 lists the other options for export and finds them all unappealing, and a third from March 1, 2013 says, "With alternative pipeline proposals to the west and east coasts stalled due to public opposition and rail such a high cost option, Keystone XL remains the gateway to the higher prices of overseas markets for expensive tar sands." However, blogger Andy Stevenson posts a map showing a number of potential exit routes for the tar sands. It looks to me like there are a number of possible outlets for the muck. See more after the break.

Andy Stevenson applies an economic approach, looking at the relevant prices. The price of the mined tar sands (i.e. their value, and the reason for producing them) is low relative to other oil because it's so expensive to get the sands to a refinery: their value will go up a lot if they have a pipeline to easily get it there. However, if current oil prices are around $90/ barrel, then heavy crude from the tar sands is still worth at least $35-45/ barrel. I have no idea what the extraction costs are, but if they're less, they'll keep pumping it out with or without Keystone. They'll probably produce more with than without the pipeline, but how much more? What's the impact of that extra production, which is all we can think about stopping? Is it worth all this effort to stop that extra amount of production, or can the NGOs' effort be better used in other areas?

I'm not too impressed by Andy's last argument, which basically says that we don't need the tar sands because we are going to be producing more domestically. I think that's arguing that since we have plenty of fracking going on we won't need other sources, but a) does that mean you want lots of fracking? (maybe so, since it's probably cleaner than the sands) and b) regardless of US demand, the point of the pipeline is for exports, not necessarily consumption in the US, so the climate impact of the tar sands doesn't hinge on US demand.

People want petroleum to run their cars, to produce their crops cheaply, and to power their concert venues. This is a dirty source of petroleum. Is it possible to bottle it up? If so, at what cost? Is there anything else you could do with that cost that would make more of a difference? And do you even want to fight to bottle it up if doing so means incentives for more fracking? (Personally I'm on the fence about fracking too, but that's another post!)

I wrote before that I was thinking that the Keystone is probably not a good place for the environmental movement to invest its energy, but now I'm rethinking. If they really can bottle it up, then maybe it's better to try to do so! I've been wrong before and I'm willing to change my opinion if there's a good reason to do so. Looking forward to getting more information.

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