An Argument Against Building the Keystone XL Pipeline

Spread the love

There are a number of arguments against building the Keystone XL Pipeline, but there is only one that counts. We have to keep the carbon in the ground. Building the pipeline is not that.

We’ve discussed this before.

There is now short video ad from Keystone Truth that makes a more specific argument. It isn’t really an argument against building it (see above for that) but rather, a more detailed look at what Keystone XL involves, putting a finer edge, perhaps, on why it should be opposed by Americans. The ad, titled “Sucker Punch – Keystone Truth,” is designed to inform Americans that they are probably getting suckered by the builders of Keystone. Keystone supporters claim that by linking the Canadian Tar Sands to the Gulf Coast of the United States we would become “energy independent.” But there is good reason to believe that the whole point of Keystone is to provide an efficient way to move the tar sands gunk through, not to, the United States for sale overseas. Furthermore, the ad claims, probably correctly, that one of the major financial backers of this effort, perhaps even the major backer, is China. (China has invested 30 billion of the 100 billion invested so far. I believe this is the largest single investment.) It makes sense that a plan to move Canadian tar sands gunk out to the rest of the world would involve foreign investors, and it also makes sense that China would be one of these, if not the Big Panda in the room, because China has the cash to do this. And, probably, the thirst for the gunk itself.

Here is the ad:

It is possible to see the ad as “Red Bating.” This is where we prey on American anti-Asian racism, which often involves the tropes of the clever Oriental Entity and/or the Red Scare. It makes China a bad guy using themes that reach back into American cultural history to exploit long established and deep racialized hatred and mistrust.

This may be true. But it is also true that the ad does not really invoke any of the traditional symbols of this sort of thing. Yes, it shows a lot of red along with the China part of the story, and the red flag with the stars on it, and it even highlights, using a B&W vs. Color contrast, the red in the Chinese Flag and the red in the Canadian flag. But, it is also true that red is the color of China and is used abundantly by the Chinese in pro-China patriotic depiction and decoration, especially in places like … well, like Red Square. Also, that is the Chinese flag and that is the Canadian flag. And China really is investing a lot of money to get the tar sands gunk to a particular market where they will benefit.

One could say that the Chinese, the Canadians, the pro-Keystone Americans, and the Keystone corporate structure are all depicted as the capitalists they are. Running dog capitalists even, if I may borrow a phrase. But yes, the ad not so subtly allows for viewers to make the link to deep seated fear and distrust.

So here we go again. Progressive liberal left wingers (left wingers!) heavily analyzing our own message (because this is a message that works for our side) and possibly even fighting over how to make the argument to the extent that we weaken the argument ourselves. But we keep our integrity. The reason the right wing wins so many of these battles of rhetoric is because they almost never do that.

Suckers. We are. But perhaps we like it that way.

UPDATE: We may be hearing more about Keystone XL on Thursday.

Have you read the breakthrough novel of the year? When you are done with that, try:

In Search of Sungudogo by Greg Laden, now in Kindle or Paperback
*Please note:
Links to books and other items on this page and elsewhere on Greg Ladens' blog may send you to Amazon, where I am a registered affiliate. As an Amazon Associate I earn from qualifying purchases, which helps to fund this site.

Spread the love

16 thoughts on “An Argument Against Building the Keystone XL Pipeline

  1. I find the timing to be odd. In a time when we are using fracking to release massive amounts of oil and gas, already dropping the prices of both (So much that coal, as an industry, is pretty much dead.) they want to take advantage of low energy prices by adding a more costly, both economically and environmentally, product to the mix. Strange.

    It isn’t as if the oil sands are going to go bad if not exploited in the near future, and there is no prize for being the first nations to run out of energy resources. You can do a whole lot with petroleum products, even the very crude stuff produced by tar sands. Fertilizers, plastics, pharmaceuticals all, mostly come from petroleum products. Long after we move on to solar-electric power, or fusion, or zero-point, or what have you for energy we will still need plastics and paint.

    Fact is that given the things you can do with petroleum products it seems the most wasteful is to burn them for energy. So why the rush to exploit this source now? When we run out of economically exploitable oil and gas, and really need some petroleum dependent pharmaceuticals to cure cancer or Alzheimer’s then polluting some small amount of water and land, and spewing some excess carbon will seem worth it. Until then I think we would all be better off, barring a few billionaires, keeping the oil sands right where they are.

  2. If we’re going to wander off into the argument that petroleum is best reserved for plastics / other organic molecules production instead of fuel, we should start with the fact that plastics / chemical production accounts for a tiny fraction of the total amount of petroleum extracted from the Earth and refined. Less than 1%. In other words, the price of crude oil could increase by a factor of 100 (puttin the price of gasoline somewhere in the neighborhood of $400 / gallon) and plastics production would still be a reasonable option.

    Even if we decided to quit burning all oil today, there’d be more than enough oil around already extracted from the ground, never mind the stuff still under the ground, to make plastics and all the other organic chemistry we do for centuries.

    Yes, we use crude oil to make plastics. Yes, plastics and related activities are a huge industry. But the amount they use is utterly trivial compared to the amount we burn.

  3. That’s probably also true for natural gas to the extent that it is used for things other than burning. (More so possibly?)

  4. So, let me get this straight:

    There’s already far more than enough capacity to refine heavy oil on the Gulf Coast. Yet the Chinese are willing to re-export the Canadian bitumen, tacking on the extra cost of shipping it through the Panama Canal and to Chinese markets.

    That makes no sense. Why would the Chinese pay more for oil than they had to? Why would a supertanker arrive at the Gulf Coast, unload the conventional light or heavy oil its carrying for Gulf Coast markets, then re-load itself with bitumen to be shipped abroad? Why would it be shipped raw out of a market where refiners want that bitumen and there’s far more than enough capacity to already refine it?

    It’s very simple: the bitumen that gets to the Gulf Coast will be refined there for U.S. and international markets. Why? Because there’s big demand for it and lots of capacity. This, in turn, will displace other crude oil imports into the Gulf Coast, which means that other crude oil becomes available in the world markets for the Chinese to acquire.

    If you’ve been following the market, this has been part of China’s game all along. Yes, they’d like to refine some of the resource they own if they can (for which they’ll need exports off of the west coast of Canada or the U.S. and only if it makes economic sense). But they’d be just as happy displacing other oil imports out of the U.S., which they can then grab on the world market instead.

    China wants cheaper oil, not just any oil.

  5. Just because they’ve invested that much in it, it doesn’t mean they have to ship it to China to be refined. They can sell the bitumen wherever they want, most likely in the place that makes the most economic sense.

    For example, American companies sink billions of dollars into petroleum exploration around the world every year with no intention of that oil or gas they produce of ever reaching American shores.

    In terms of costs, it makes complete sense for the Chinese to ship that bitumen to the Gulf Coast and sell it to to refineries there. If that bitumen displaces Nigerian crude oil out of the U.S., that Nigerian crude will likely find its way to European refineries, which would then potentially bounce out Saudi Arabian crudes or other Middle East crudes, which then become available for China.

    At that point, everybody saves a little money on shipping costs because oil doesn’t have to be transported as far and it also doesn’t have to go through costly canals, like Panama or the Suez. What refineries want is cheaper crude and, if they can save a few bucks by reducing transport costs, they’ll find a way to do it.

    So, China invests those billions of dollars in the oil sands and economically wins even if its refineries never take physical possession of the bitumen.

    Otherwise, if Chinese refineries do acquire that bitumen through the Gulf Coast and refine it, Chinese consumers pay more for their gasoline and diesel because of the higher shipping costs. Or Chinese refineries have a harder time competing against imported refined petroleum products because of higher feedstock costs. Either way, their economy is worse off.

  6. I should add that, if using pipelines and rail to ship the bitumen to the west coast of Canada and the U.S. to export it from there can save Chinese refineries money in the end, they’ll do that too.

  7. Yes, that’s the argument, but does it make any economic sense for Asian refineries to get their hands on bitumen from the U.S. Gulf Coast?

    If that bitumen can easily be outcompeted by other crudes, then it makes no sense at all.

    Producers would have already paid about $10/barrel to ship that bitumen to the Gulf Coast through Keystone and then they’d have to pay more to ship that bitumen through the Panama Canal and to Asia.

    The world oil market is incredibly competitive and those extra shipping costs would very likely push bitumen out of the Asian market. This, of course, makes Steyer’s argument that “Keystone is only being built so Chinese companies can refine dirty oil” not a very good one. You can use that argument against the Northern Gateway and TransMountain expansion projects, but it’s not very applicable to Keystone.

    Finally, again, it makes far more sense for the Chinese to sell that bitumen within the U.S. market.

  8. But that does not explain the pipeline. Bitumen is already transported to the US and refined. It’s what I put in my car here in Minnesota. It would be cheap and not subject to as much regulation to expand current transport and expand refinery capacity here. The refine in the US and sell here strategy is being dismantled by Keystone XL.

  9. The United States refinery fleet is already very big and running underutilized. There’s no point in building more refineries that’ll just sit there idle and losing money when there’s more than enough room in the existing fleet to do the job.

    What explains Keystone XL is that there was a big expansion of coking capacity in the refineries of the U.S. Gulf Coast over the past twenty years. These refineries are currently running underutilized and they’re looking for heavy crude. Meanwhile, there’s a big supply pool of it in western Canada that looks cost competitive with other sources of heavy crude oil in the world.

    So, the market at the Gulf Coast wants the bitumen. That’s why Keystone XL was proposed.

    Let’s look at this another way. Currently, the Gulf Coast U.S. is a world market for oil, paying world prices. So, the Chinese can sell the bitumen there for world prices OR they can pay a tanker to ship it to their refineries in Asia where those refineries essentially pay those same world prices. If it costs $10/barrel to ship that oil, they just lost $10/barrel. It makes absolutely no sense to do that.

  10. I’m sorry, but the argument foy shoring up transport to the upper plains and building more refinery capacity there is still perfectly sound.

  11. I’ll admit they’ve been increasing heavy-oil refining capacity in the mid-west, but they’d have to expand it alot more to absorb all that bitumen. To put this in perspective, the addition to the BP Whiting refinery cost $3.8 billion, all for 102,000 barrels per day of coking capacity, or about 15% of proposed Keystone XL throughpout.

    Meanwhile, the capacity at the Gulf Coast coast is already there and they don’t have to spend a nickle to take that heavy oil. To the market, it’s a no brainer. And it’s why nobody will be dumping huge amounts of cash to build more coking capacity in the U.S. midwest.

  12. “This may be true. But it is also true that the ad does not really invoke any of the traditional symbols of this sort of thing. Yes, it shows a lot of red along with the China part of the story, and the red flag with the stars on it, and it even highlights, using a B&W vs. Color contrast, the red in the Chinese Flag and the red in the Canadian flag.”

    Ya, it doesn’t invoke any of those traditional stereotypes…except this one. and that one. and the other one…

Leave a Reply

Your email address will not be published. Required fields are marked *