Why the Keystone XL Pipeline decision is not as important as you might think

First of all, the Keystone XL decision is not as final as either supporters or proponents might have you believe. All the administration is doing is saying that the pipeline can’t go through the Nebraska sandhills. TransCanada will be able to submit a new proposal that routes the pipeline around the sandhills.

Second, the impacts of building or not building the pipeline are being exaggerated. The Washington Post published an excellent 5 myths piece that debunks the more extreme claims on both sides. While tapping all of Canada’s  oil sands would be a disaster for the climate, it would also take around 1,000 years. In the more immediate future, it would amount to well under 1% of the U.S. current greenhouse gas emissions. Second, even if the U.S. does end up rejecting a newly routed pipeline it would still be Canada’s decision to extract the oil and sell it on the global market. Selling to the U.S could actually be less harmful than shipping the oil farther away.

Some jobs would be created by the pipeline, but most would be temporary, and the numbers tossed around by supporters are grossly exaggerated. (see the 5 myths piece for details). Broadly speaking though, even if the claims were correct, they still would only move the unemployment level by just under .002%.

With all that said, good public policy usually comes down to making several decisions that each have minor impacts. By far the most frustrating arguments of the deficit reduction debates were claims that a certain tax raise or spending cut should not be enacted because that individual tax increase or spending cut could not solve the entire deficit problem by itself. Similarly, no one decision or policy will ‘solve’ climate change or unemployment.

Even though the impacts aren’t overwhelming, the administration made a good decision in sending the plan back to TransCanada. I am concerned that Canada will develop the oil sands anyway, but approving a transnational pipeline that runs through an environmentally sensitive area (Nebraska sandhills) without adequate time to do a full analysis of the costs and benefits is a bad idea. While I would prefer to see the money invested in clean energy, I think the best realistic outcome is for the U.S. to make a deal with TransCanada that involves both stringent environmental regulations (certainly a rerouting of the pipeline) and the purchase of some carbon offsets.  Maybe I’m wrong and the Canadian environmental movement is strong enough to stop Canada from developing the oil sands; but with that much oil at stake I doubt it.


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