Keystone XL and the Senate

Brush Fire

Brush Fire

LAKE MACBRIDE— During the run-up to the Nov. 18 vote on S-2280, a bill to approve the Keystone XL Pipeline, I messaged Senators Tom Harkin and Chuck Grassley, asking them to vote no. Harkin voted no, Grassley yes.

Senator Grassley sent along an explanation of his vote, which is pasted below. As he indicated, the motion failed to pass the Senate. What this letter doesn’t say is that I asked him to vote no, without any other comment. I have been around politics too long to believe that logic and rational thinking have much to do with why a U.S. Senator votes a certain way.

The framing of Grassley’s response points out the challenges opponents of the pipeline will have once the 114th Congress convenes. His arguments are rational in their way, if misguided.

It is hard to disagree with building a pipeline per se. There are many pipelines in the world, and they are a mode of transportation that serves the oil and natural gas industry, which in turn supports political stability. As Grassley pointed out, building pipelines creates jobs.

This is not a partisan issue. In Hillary Clinton’s secretary of state memoir, she mentions building pipelines several times, always as a solution to energy problems which in turn increases political stability around the globe. It will be hard to win the argument against Keystone XL because of the existential fact of it being a pipeline.

If oil prices continue to decline, the economic conditions which made the Tar Sands viable will erode. The reasons for declining oil prices are complex, but it boils down to a combination of increased U.S. shale oil production, lack of willingness by OPEC to curb production, and our society’s addiction to fossil fuels. It seems unlikely that the oil and gas industry will allow prices to get too low, and we are not in control here, except for our personal energy choices.

Something’s got to give to reduce reliance on fossil fuels. Plugging an electric car into our household grid is not an answer if all we do is switch our energy source from gasoline to coal and nuclear, both of which have their own risks to human health. Grassley doesn’t directly mention decreasing reliance on fossil fuels as an issue in his response.

The argument about what happens to the oil in Texas is unresolved, despite Grassley’s assertion otherwise. The issue with refining, in light of increased U.S. oil production, is one of limited capacity. It has been a while since I was familiar with refining operations, but I suspect refineries are still running every minute they can to keep up with demand.

Could the refineries re-tool to handle Tar Sands oil? Yes, definitely. Is there an economic reason to do so when there is plenty of Middle East oil entering the Gulf of Mexico at a low price? Probably not in the short term, and there appears to be little interest in increasing refining capacity in light of the current regulatory environment. Going forward, one would expect the Tar Sands crude oil to be exported the way U.S. light sweet crude currently is—because the refineries are already doing all they can to keep up with imports.

Grassley’s right to say we should decrease our reliance on imported oil. The simple fact is there is not enough oil being produced in North America to meet U.S. needs, and as I mentioned, there are economic constraints to refining capacity. What is missing is affirmation of the need to decrease use of fossil fuels, and that’s more the problem with the response.

The trouble for opponents of Keystone XL is that Grassley takes apart many of their arguments in a way that will build political support for a likely re-consideration of the project in 2017, if not in 2015. It is important to read his response and learn from it… and hope the climate doesn’t reach the tipping point while we dance around what most needs doing: reducing and eliminating our reliance on fossil and nuclear fuels.

Charles E. Grassley
Washington, D.C.
December 4, 2014

Thank you for taking the time to contact me. As your Senator, it is important for me to hear from you.

I appreciate knowing your concerns regarding the crude oil pipeline from Canada to Nebraska called the Keystone XL pipeline. On November 18, 2014, the Senate held debate and voted on S. 2280, a bill to approve the Keystone XL Pipeline. I was an original cosponsor of this bill and supported its passage. However, the bill failed by a final vote of 59-41, one vote short of the 60 votes necessary for it to pass the Senate.

The pipeline would supply more than 800,000 barrels a day of Canadian crude oil to U.S. refineries and help to counteract both insufficient domestic oil supplies in the United States and reduce dependence on less reliable foreign sources. The Keystone XL pipeline is a $7 billion, 1,700 mile pipeline that would create thousands of private-sector jobs at no cost to American taxpayers.

In 2008, TransCanada applied for a presidential permit from the State Department to construct and operate the pipeline. Due to environmental concerns, the State of Nebraska approved a modified route in January, 2013. Following this modification, the State Department released a draft Supplemental Environmental Impact Statement (SEIS) on the new presidential permit application. The State Department noted that oil sands development would go ahead regardless of the production of the pipeline by using different pipelines or rail to get to market. The report essentially found that the pipeline would not accelerate greenhouse gas emissions or significantly harm the environment along its route.

After nearly six years of rigorous regulatory review, the State Department issued its fifth environmental review on January 31, 2014. This fifth review reached the same conclusion as earlier reviews. It found that the pipeline will have no significant impact on the environment and is the safest way to transport the oil. It also found that rejection of the pipeline will not affect Canada’s decision to develop these oil resources. The administration had been in the middle of a 90-day review period for federal agencies assessing the State Department’s environmental study when, on April 18, 2014, the State Department announced an indefinite extension of the agency comment period.

Opponents of the Keystone pipeline argue that the pipeline will not increase oil and gas supplies in the United States, rather, that all of the Canadian crude would be sold to world markets. Even President Obama reiterated this claim when he said the pipeline would allow the Canadians to “pump their oil, send it through our land, down to the Gulf, where it will be sold everywhere else.” However, the Washington Post “Fact Checker” disproved this claim. It noted that the State Department’s final environmental impact statement specifically disputed claims that the oil would pass through the United States and be loaded onto vessels for ultimate sale in foreign markets. It found that the crude oil would almost certainly be refined in the United States, with at least 50 percent of the refined products remaining in the U.S. market. It stated, “market conditions could change, of course, but there is little basis to claim that virtually all of the product, or even a majority, would be exported.”

The energy and economic development benefits of this pipeline are too important to delay any longer. We need an all-of-the-above approach to meet the country’s energy needs and give consumers choice. That means oil, ethanol, electricity from wind, and nuclear power. A pipeline would be safer than transporting oil by rail. Canada will produce this oil with or without U.S. involvement in the shipment. I’d rather work with one of our strongest allies than continue to get oil from the volatile Middle East or Venezuela.

What is needed now in the United States is an increased supply of oil. It is simple economics. If you increase the supply, you decrease the price. We are still relying on a very finite amount of oil. We must increase our own domestic supply of energy while promoting the use of alternative sources of energy at the same time. I will continue to support these goals with your thoughts in mind.

Again, thank you for taking the time to contact me. I appreciate receiving your comments and urge you to keep in touch.

Sincerely,
Chuck

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