Blocking Keystone XL: How Long a Victory?

There's no doubt that Bill McKibben, the Sierra Club, and all the folks who persuaded President Obama to slow down the Keystone XL pipeline juggernaut won a tremendous victory. The question of the day is: How long will it last?

The optimistic view is put forward by Steve Kretzmann and Lorne Stockman over at Oil Change International. Their reading of the tea leaves is that "there is good reason to believe that this delay may kill Keystone XL, at least in its current form." If oil is not flowing from Alberta to Texas by the end of 2013, they argue, the contracts between TransCanada and its customers could well be invalidates. TransCanada competitor Enbridge, which just yesterday bought a 50% share in an existing pipeline from the dirty oil terminal at Cushing, Oklahoma to Texas, could fill some of the gap, but Canadian tar sands would have to compete with the boom in shale oil coming out of the Bakken field in North Dakota. An alternate route for the Alberta oil, west to ports in British Columbia, would have to deal with mountainous terrain as well as some 100 First Nations communities who are implacably opposed to the project. All in all, Kretzmann and Stockman argue, the Keystone XL delay

is a slap in the face for an industry that generally gets its way in North America. . . . Opponents can place barriers in its way and that is a major threat to the industry's growth.

Now for the pessimists, like Brad Plumer at Wonkblog. With Enbridge buying into the Seaway Pipeline, he contends, the price of oil from the Midwest is already rising, which will only encourage production in Canada. In addition, he says, "there are all sorts of ways" for Canadian oil to get out. A pipeline could be built to eastern Canada. Enbridge's Alberta Clipper line to Wisconsin could be expanded, and the proposed "Wrangler" pipeline could ship the oil to Oklahoma--all without State Department approval. The stuff could even be shipped by rail or barge. Plumer concludes:

So while blocking a pipeline here or there can hamper oil production, it’s certainly not a long-term solution for those who worry about the global-warming effects of carbon-intensive oil sands in Alberta and elsewhere. The only sustainable way to get those emissions under control is with a price or cap on carbon — either a tax or cap-and-trade system — and by reducing demand for oil. (And if Canada doesn’t want to cap carbon, the U.S. could tax crude imports at the border.) Without a carbon price, oil will always find a way, as long as people want to use it.

But delay is delay. More time for opposition to organize, more time for the price of solar and wind to come down, more time for the climate deniers to be beaten back. The war's far from over, but we won the battle.

--Paul Rauber