The Agenda

The Realistic Alternatives to Keystone XL Pipeline

MIT economist Christopher Knittel, known for his work on the potential environmental benefits of carbon pricing, argues that opponents of the Keystone XL pipeline are neglecting the likely possibility that the likely alternatives to the Keystone XL pipeline and consumption of crude from the Alberta tar sands are actually worse than allowing the project to proceed as planned:

1. The value of tar-sands production is such that Canada will almost certainly build an alternative route to access the global market;

2. though the Keystone XL pipeline will increase the value of tar-sands production, the supply response isn’t likely to be very strong;

3. and the alternative to tar-sands oil production may well be Venezuelan Petrozuata or Californian Kern River oil, both of which are dirtier than the tar-sands oil sold to the U.S.

Knittel doesn’t address all of the concerns raised by opponents of Keystone XL, including those centered on the threat of groundwater pollution that might impact the vulnerable Ogallala Aquifer. But he demolishes the argument from carbon emissions. 


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