However, because of the global nature of the oil market, the security benefits of the pipeline are illusory. A disruption anywhere sends prices up everywhere. Suppose, say, that a civil war were to break out in Nigeria, sending world oil prices soaring. Could we expect Canadians to sell us their oil at a discount just because they are our neighbors? Hardly. Would a pipeline from Canada stop higher oil prices from enriching unfriendly regimes? Not at all. At best, a pipeline from Canada might reduce the temporary logistical costs of a supply disruption, but we already have the national oil reserve to protect against those short-run effects.
On the environmental front, the biggest objection to Keystone XL is that oil from Canadian sands has a far higher carbon footprint than oil from conventional sources. The State Department’s environmental impact statement makes two claims that attempt to downplay that issue. One is that Canadian oil is only a little dirtier than that from other major suppliers like Venezuela and Nigeria. The other is that improvements in extraction methods may eventually reduce carbon emissions from oil sands.
Neither claim is entirely false, but in the end, they only divert attention from a far larger issue: The lack of a comprehensive energy policy. What we really need is to slash total energy use, and at the same time, shift the energy we do use away from dirty sources like oil sands to cleaner sources like renewables and natural gas. The best way to do that would be a tax on the carbon content of energy from all sources, although other policies, such as cap-and-trade, could also do the job.
A carbon tax or similar policy would put real economic pressure on Canadian oil producers to do what is now only a vague promise: find a way to extract energy from oil sands in ways that are less environmentally destructive, if that is really possible. If not, oil from Canadian sands would become so much less competitive that the backers of Keystone XL might well withdraw their proposal.
But what about jobs? Aren’t jobs what matter most? Yes, jobs are important, but environmentally harmful projects like Keystone XL are the wrong fix.
For one thing, the number of jobs involved is often exaggerated. Pipeline backers claim it would directly create 20,000 jobs and support hundreds of thousands more. Fantasy. The State Department speaks more realistically of 6,000 new jobs. Of course, even 6,000 jobs would be welcome, if they were good ones, but they are not.
What makes a good job? Above all, a good job puts someone to work producing something we need. Jobs that only increase our access to the dirtiest source of oil on the planet and feed an energy demand we should be making every effort to curb do not qualify. There are many more beneficial jobs waiting to be created: upgrading an obsolescent electric grid, putting laid-off teachers and police back to work, encouraging private sector jobs through tax reform or export promotion, you name it.
The bottom line? The jobs Keystone XL would create are just the kind we don’t need. The oil it would carry is just the kind we don’t need. Its security benefits are illusory. It is not in the national interest.
Ed Dolan blogs at Economonitor.com and is the author of TANSTAAFL: A Libertarian Perspective on Environmental Policy.