Heard it on the Pipeline
Terry H. Schwadron
Hear something, say something.
That Team Trump overturned the Obama opposition to the $8-billion Keystone Pipeline project and issue the formal State Department permits a week or so ago was no surprise, of course. It was the exuberance of President’s announcement that caught my attention, even in a news-filled week.
“Today we take one more step in putting the jobs, wages, and economic security of American citizens first,” the President said, adding that his administration had blown away eight years of obstruction to the TransCanada pipeline in an effort to add jobs and American energy security. The permits followed an earlier executive order to clear obstacles for the pipeline project. “Today, we begin to make things right,” said Mr. Trump.
For years, the pipeline, which runs from Canadian black sands areas to hook up with existing pipelines in the Nebraska, took on an oversized symbolic status either as a statement for environmental protection or for a pro-business reaction to overregulation. Both sides were overstating the importance of this particular project, but that’s what happens to symbols.
Obama’s opposition, in part, grew from the belief that approval would be hypocritical in light of support for worldwide curbs in drilling needed in support of climate change policies. In making the announcement, it was also said that Secretary of State Rex W. Tillerson, formerly head of Exxon Mobil, took himself out of the decision-making for obvious reasons.
Still, it’s the overstatement that rings in my ears. By all means, take action, take credit, but can’t we just be honest about what the effect will be?
Now that the project is approved, what will the actual impact be, and what’s the hypocrisy I’m hearing? Apart from environmental arguments, let’s look at the reality:
· Putting American citizens first? The project is Canadian, and benefits Canada. Once it is complete, the pipeline will be an inert straw that will carry 8–00,000 barrels of black sands oil, among the dirtiest forms of oils around, to refineries in the Gulf before sending it overseas. How does this put Americans first?
· Jobs. The pipeline will create construction jobs, which, by their nature will be temporary. The White House announcement said it is expected to support 42,1000 jobs up to two years, with 16,100 directly related to the project. By contrast, various analyses of the project suggest that in the end, the pipeline will create about 35 jobs.
· American materials. President Trump promised that pipelines such as this would be built with American-built steel. Nope. Turns out that Keystone planners already had bought their foreign-made steel and no new American steel-making will result.
· Energy. The Canadian firms behind the project intend to sell this oil overseas, mostly to China. The pipeline does not provide Americans more energy security. Still various refining and transport costs “expected to add $3.4 billion to the U.S. GDP,” the White House said without explanation. The American Petroleum Institute applauded the decision.
· Business vs Environment. Yes, it is a pro-business, anti-environment move. When the project began several years ago, there was more of a business case for the high costs of extracting, transporting, refining and shipping oil drawn from this particular source. In the intervening years, the price of oil has dropped, and Canadian oil is considered more price depressed than the world standards while American oil and gas output has been consistently rising. Two big European companies have abandoned projects based on drilling in black sands areas.
· Will it leak? Every pipeline leaks. Will it be a big leak? Can’t tell, of course. Pipelines are said to be safer than trains.
· Does it meet campaign promises? You betcha. Mr. Trump said it early and often, among other things, distinguishing him from Hillary Clinton, who had (finally) opposed it. Permission for the pipeline fits perfectly with a put-America-back-to-work philosophy.
· Is it fully approved? No. The project still needs the approval of the Nebraska Public Service Commission and local landowners who are concerned about water and land rights. Protests are likely. Mining the oil sands requires vast amounts of energy for extraction and processing.
These big projects are hard enough to evaluate without people, particularly the White House, going overboard to provide unwarranted explanations of wonderful outcome.
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