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June 07, 2013

Keystone XL: The Iconic Climate Battle


In February 50,000 people marched on the freezing Washington Mall to tell President Obama that he must reject Keystone XL and move forward on climate. Since then, Sierra Club activists and our partners have met President Obama, Vice President Joe Biden, and Secretary of State John Kerry at more than 20 events around the nation to repeat the message. Hundreds of people demonstrating the escalating public opposition to Keystone XL – from 200 in Chicago, to 500 in New York City, and 1,000-plus in San Francisco. Just last week hundreds more met President Obama in Palo Alto and Santa Monica, California, and the size and momentum of these events only continues to grow as the decision on the pipeline looms closer.

It’s no accident, certainly no mistake that the fight to stop the Keystone XL tar sands pipeline has become the iconic climate issue.

And the attention and controversy we’ve generated in this fight has led to a common question, “Why Keystone XL, what’s the big deal?” Some climate activists who came late to the battle argue that it’s the wrong target. Not so. For those of us who were there at the start of the tar sands campaign seven years ago, Keystone is a brilliant target and a battle that win or lose, we win. Here are ten reasons why this has become a critical battle in the war on climate.

1. Massive. Tar sands are the third largest proven oil reserve in the world behind Saudi Arabia and Venezuela. If we’re going to avoid a climate disaster, we need to leave three quarters of the proven reserves of oil in the ground. We have to block development of the tar sands along with most of the rest of the proven reserves in the world or we’re cooked.

2. Landlocked. Canada’s tar sands are the largest non-nationalized proven oil reserve in the world, but it’s landlocked. Oil companies can’t expand because they can’t get their oil to market. All the pipelines in Canada are dead or blocked for at least another 6-10 years from being operative. US pipelines are the only ones that could move oil in less than two years. Tar sands investors are running out of patience after three years of delay.

3. Discounted. Tar sands are expensive to produce (approximately $70/barrel). They are also discounted (approximately $25/barrel) when sold into the US because we have a glut of oil in the Midwest due to a bottleneck at Cushing, Oklahoma. The Keystone is the critical pipeline for draining the glut, eliminating the discount, and allowing oil companies to profit. No profit, and oil investors won’t risk stranding their assets.

4. Remote. Tar sands are located in the upper NE corner of Alberta. They are a thousand miles from BC and nearly twice that from Texas. Given the expense of producing them, and the discounted price of the market, they can’t afford alternative transport. To ship by rail costs over $30/barrel, by pipeline $2. Do the math. Without pipelines like the Keystone XL, tar sands are going nowhere.

5. Market Signal. Obama is the first President to ever delay a pipeline. There are more in the cue including the Lakehead expansion in Michigan, the Alberta Clipper expansion in Minnesota and Wisconsin, and the Line 9 Trailbreaker reversal through Vermont, New Hampshire and Maine. If KXL is rejected, it not only emboldens opponents to other pipelines in Canada and the US, but tells investors to put their money elsewhere.

6. Fierce Competition. We may hate the development of US tight oil, and many groups like us are fighting to block it, but the reality is production of tight oil in the US is skyrocketing and it’s already causing tar sands companies like Suncorp and Total to pull the plug on new upgraders and even to sell some of their operations. They can’t compete with cheaper and lighter tight oil and the window of opportunity is closing rapidly.

7. Diversity. This pipeline fight unifies a broad array of activists. It involves Canadian and US NGOs; First Nations across Canada and Native American tribes; ranchers, farmers, and landowners coerced by eminent domain to allow a pipeline on their lands; refinery communities who will be poisoned by the increase in toxic emissons; and clean tech companies and investors who remain disadvantaged by cheap oil.

8. Latent Anger. Oil companies are damn near at the top of the list of companies the public dislikes most. Poll after poll shows that Americans believe oil companies manipulate gas prices and have too much power over government. Nobody knows who supplies their electricity or natural gas, but everyone knows who’s ripping them off at the gas pump. For those who also fear climate change, the Keystone XL has ignited that anger and along with it the climate movement.

9. Singular Target. While this was supposed to be a Dept. of State decision, it’s de facto President Obama’s decision. He doesn’t need Congress. He just needs the courage to tell the American people, who know little or nothing about the KXL, the truth- i.e., that it will raise gas prices in the Midwest, make it impossible to meet our Copenhagen target of 17% reduction, and largely be turned into diesel and sold onto the international market. Climate activists believe KXL is the test of whether their President has the nerve to face down Big Oil and its Congressional puppets.

10. Frustration. Climate activists are fed up. Obama raised their expectations, then dashed them. They lost cap and trade. There is no hope of a realistic price on carbon. Oil barons are pouring hundreds of millions into buying off Washington. The president talks a great game on climate, but the climate crisis is building, and Keystone is a singular action that the president can take tomorrow to back his bold words with action.

At the end of the day, President Obama knows that approving Keystone would be a giant step backwards. It’s not just a random battle we picked. It is a litmus test of whether he is going to be bold enough on the penultimate climate issue of our day. If he opens the door to exploitation of the tar sands, he sends the signal to oil, coal and gas companies around the world that the one president who actually got climate change, didn’t have the courage to stand up for what was right and protect the birthright of future generations—a healthy planet.  

On the other hand, if the president rejects the pipeline, he sends the message to the oil industry, major institutional investors, auto and truck manufacturers, cities, states, provinces in Canada and countries that the days of oil, coal, and gas are numbered. The market is shifting, and they had best shift with it. The rejection of KXL will unleash a wave of grassroots and grasstops activists emboldened to support his efforts to adopt strict carbon rules on coal power plants, block new and properly regulate existing oil and gas fracking, stop coal, gas, and oil exports, and even begin to lay the ground for a price on carbon. It will be the victory that signals the end of the fossil fuel industry’s enormous power and influence in Washington.

Either way, KXL is a winner. 

-- Michael Marx, Director of the Beyond Oil Campaign


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