227.1 - Good News: Keystone XL pipeline rejected

Good News: Keystone XL pipeline rejected

Okay, as I always try to do, let's have some Good News at the top.

Last week, I said that indications were that the Obama administration was going to reject permits for the Keystone XL pipeline, the one intended to carry tar sands from Alberta, Canada, to refineries in Texas.

The day after I did the show, that is exactly what happened. The state Department, involved here because the project crossed an international boundary, refused to allow TransCanada, the corporation behind the pipeline, permission to proceed.

The department's press release gave five reasons for the rejection, among them a negligible impact on our energy security; a marginal contribution to the economy;concerns about local communities, water supplies, and cultural heritage sites; and the nature of what would be transported.

Secretary of State John Kerry, in whose name the release was issued, declared in it:

The critical factor in my determination was this: moving forward with this project would significantly undermine our ability to continue leading the world in combatting climate change.

Now, it's questionable if the US is "leading the world" in combatting climate change when its own promises to cut greenhouse gas emissions fall short of those of a number of other nations, but still, to hear that the potential impact on climate change was "the critical factor" in rejecting the project is welcome.

This, as always seems to be true, is not the end of the bigger issue. Canada is already shipping about 3M barrels of some sort of oil a day to the United States through 31 existing pipelines - and about half of that is heavy bitumen - tar sands - from Alberta. But without the Keystone XL pipeline to make it more price competitive, more of those tar sands are likely to stay in the ground - and in terms of global warming, that, not the pipeline itself, was the issue.

Another thing is that as I noted last week, the project may not be totally dead. TransCanada is said to be "exploring its options," including starting all over again with a new and hopefully for them friendlier administration in January 2017, pushing Congress to overturn the decision, or even filing suit under NAFTA, which would involve asking a business-oriented tribunal under the treaty to demand the US approve the pipeline or compensate TransCanada for lost potential profits.

However, newly-elected Canadian Prime Minister Justin Trudeau is unlikely to back a NAFTA challenge, the US has never lost a challenge under NAFTA, and the legislative route has already been tried and failed.

So trying again, starting from scratch, under a new administration is the only realistic option. But even with a favorably-disposed White House, the project would still face extensive and hardened local opposition all along the route. So pursuing it may well appear to the company to be throwing good money after bad. Ultimately, to me, TransCanada seems more likely to lick its wounds, write off its investment to date, and look elsewhere.

So while I don't feel I can be as definite as Michael Brune, executive director of the Sierra Club, was in describing the pipeline as "dead" and "won't happen," I do think we can be pretty damned confident that this is the end of the line for the Keystone XL pipeline and a victory for people power and the environment. And that is Good News.

Sources cited in links:
http://www.state.gov/secretary/remarks/2015/11/249249.htm
http://climateobserver.org/open-and-shut/indc/
http://www.economist.com/news/americas/21678157-barack-obamas-rejection-oil-pipeline-blessing-and-curse-new-prime
http://thehill.com/policy/energy-environment/259611-keystone-xl-not-dead-yet