Keystone XL is in America's Interests

abarrelfullabarrelfull wrote on 13 Nov 2015 07:56
Tags: canada pipeline usa

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So the US President has denied permission to Transcanada to construct the Keystone XL Pipeline Project.

The project was launched in 2008, and has been waiting for US government approval since 2009.

The pipeline project has numerous critics, who claim many problems including

  1. It's not Safe
  2. It's bad for the climate
  3. It's bad for health and the environment
  4. It's bad for the economy
  5. It's a step backwards

If we are to be realistic, any energy project is not without its social and environmental costs, and all good companies, pressured of course by central and local regulators, try to minimise these costs whilst maximising the benefits.

Much of what its detractors claim, appear to be exaggerated or wrong headed however, and they completely fail to face up to the costs of refusing this project.

The Climate:

  • The way to fight climate change is to reduce the usage of fossil fuels, not stop their production. Less production in Canada will increase oil prices marginally, increasing incentives to produce oil elsewhere. Given that companies doing business in Canada are held to much higher standards than in most oil producing countries decreasing Canada's market share looks irresponsible

Local Pollution:

  • The problems in the oil sands production areas and with pipeline spills are well documented. The right solution here is undoubtedly making the polluter pay, and stricter controls. As in the point above, the environmental devastation in places like Nigeria is unthinkable in the USA or Canada

The Economy:

  • There are worries that the crude will be exported. Even if it is, that does not stop the project being positive for the USA. Moreover, refineries in most other countries are unable to effectively process this heavy crude in the way that those on the Gulf Coast can. So majority will definitely be processed locally.

The Opportunity Cost

  1. Canada's biggest trading partner is the USA. Anything that hurts Canada, reduces their ability to buy US imports
  2. Canada needs to sell this crude, and if the USA doesn't want it, China does. At a time when China's inexorable rise is worrying everyone, why push the Canadians into their arms.
  3. The countries that will gain from Canada's loss, are a who's who of dysfunctional petro states
  4. Canada, along with domestic tight oil, have raised the prospect that the USA in the future, will not need to buy any crude oil whatsoever from the Middle East. This means less need to intervene, less risk of conflict and fewer body bags.

Mr President, you may have made some of your supporters happy, but you have failed to look out for the Nation's interests.

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