Jeff Rubin, author of the forthcoming The Big Flatline: Oil and the No-Growth Economy, suggests that the Keystone XL pipeline is a better choice for the environment than the chief alternative, the Northern Gateway project that will transport oil from the Alberta tar sands to a port on British Columbia’s coast, crossing an environmentally sensitive rainforest in the process.
Eventually, Rubin explains, a number of pipelines will be needed to accommodate tar-sands production, but in the near-term, the fact that Northern Gateway might proceed while Keystone XL might not will have important economic implications. The status quo, in which tar-sands production runs into a bottleneck in Cushing, Oklahoma, benefits firms that own oil refineries based in the Midwestern U.S., as oil supplies have to be sold below the global price. So Canadian energy development firms and Canada’s federal and provincial authorities have a strong interest in seeing to it than that tar-sands productions makes it to global markets, whether Keystone XL and eventually the U.S. Gulf Coast or through British Columbia’s rainforest and the Pacific.
From an environmental perspective, a few thoughts come to mind:
(1) given the carbon-intensity of tar-sands production, one might hope that the exploitation of the Alberta tar sands will simply cease — but demand for hydrocarbon-based energy is high and rising, so that seems extremely unlikely;
(2) the Ogallala aquifer is indeed sensitive — but does the threat to the aquifer outweigh the potential damage to British Columbia’s rainforest?
(3) The most likely possibility is that Northern Gateway and Keystone XL will both be built. So what should be the fallback strategy for environmentalists? Many if not most would, I suspect, endorse some kind of carbon pricing regime.