Anti-business extremists claimed victory in the long Keystone XL pipeline battle. While they succeeded in getting the pipeline scuttled, what’s clear to those who examine the facts is that their efforts really will only harm families and small businesses across the country and slow the environmental progress the nation is making.
Let’s explore what those proud of killing the Keystone pipeline achieved:
Less Reliable Energy. As summer heat threatens blackouts and hydroelectric generation disruptions from falling water levels, the death of the Keystone XL pipeline raises the specter of more extensive energy interruptions, something that should never happen in 21st century America!
While it is welcome news that renewable energy production is expanding across the country, it will be decades before wind and solar power provide a meaningful, reliable supply for our electricity generation needs; until then (and beyond), we need natural gas and oil to provide the resilient energy the U.S. requires. Yet, consider the impact of 10 pipeline projects halted and at least another 10 blocked before last summer (2020) because of regulatory or legal decisions.
S&P Global Market Intelligence Pipeline data shows that those projects would have delivered around 8.6 billion cubic feet of reliable and affordable natural gas per day. In one day, that is enough energy to provide electricity to more than 209,000 homes – for a year. This means that those ridiculous announced blackouts we’re seeing in California today could be coming to a state near you tomorrow. Home energy bills in states from the Midwest to the southeast will increase – all due to less reliable energy delivery.
Higher Emissions – Really! The Keystone pipeline would have had no material impact on greenhouse gas emissions. None. One government report after another – including five during the Obama administration – concluded that. But much more truck and rail transportation will replace the pipeline in transporting the crude oil from Canada to the U.S.
They’re worse pollution emitters than the pipeline ever would have been. For instance, it already has been estimated that if the state-of-the-art Line 5 tunnel project in Michigan is stopped, it would require 2,000 trucks or rail cars to carry the same energy every day, 365 days a year. Plus, Keystone’s developers had planned to eliminate all carbon dioxide emissions from its operations by 2030 through the use of green technology including solar power at its compressor stations. We are certainly not better off now.
Higher Electricity Bills and Gas Prices. For the foreseeable future, reduced supplies of plentiful and affordable natural gas and crude oil will trigger higher electricity bills for homeowners and businesses. Without ready alternatives, too-fast transitions to alternative energy have invariably produced higher costs. For proof, just look at residential electricity rates in California, where wind and solar now contribute 29% of its electric power. Its average monthly residential electricity cost is 56% above the average elsewhere, its commercial electricity rate is 71% higher and its industrial rate is 117% higher. This is uncompetitive for consumers of all stripes, and is certainly a partial reason for the exodus of people from the Golden State.
While the overall transition is a good thing for diversifying our energy mix and reducing emissions, we must recognize that environmentally responsible natural gas and oil must be part of the policy mix. Yes, sensible energy and environmental policy can work together.
As for gasoline prices, while the Keystone XL project would have taken until 2023 to complete and wouldn’t have affected gas prices until then, it is likely that its demise will affect gasoline prices in the years ahead. And when consumers spend a relatively larger portion of their income on gasoline, they tend to drive less to shopping centers and the mall, which affects the economy.
Loss of High-Paying Jobs. When it was halted, the Keystone XL project was just 8% finished so an estimated 11,000 high-paying construction jobs were lost. And the Perryman Group estimates than in the long run, the project would have created anywhere from 250,000 to 550,000 spin-off jobs in related industries, with an economic impact of $20.9 billion in total spending and 118,935 person-years of employment.
More Expensive Consumer Products – From smartphones, shoes and paints to computers, cars and COVID-19 vaccine vials, over 6,000 everyday products get their start from crude oils, which become feedstock at refineries and turned into plastic and clothing from petroleum-based fibers. Reduced crude oil supplies will lead to higher prices for everything from eyeglasses, tires, heart valves, protests signs and medical supplies, computers and other electronics, sporting goods, and health and beauty products. Restricting American oil and gas production, as was attempted with this year’s federal leasing ban, would have the same effect if perpetuated over a longer term.
Less Stable U.S. Energy and National Security. The death of the Keystone XL pipeline is increasing American dependence on oil imports from less friendly nations than Canada, the largest supplier of energy to the U.S. And with Middle East tensions sky-high, the ability of the U.S. to retain its energy independence hinges on the success of our domestic oil industry. It is baffling that the Biden Administration is calling on OPEC to increase production, while stifling friendly imports and U.S. production – the cleanest in the world.
Increasing Daily Inconveniences. Electricity disruptions are on the rise, again because our elected officials are not allowing appropriate assurance of baseload supplies for electricity generation, such as those provided by traditional fuels and nuclear power. And there is a movement afoot to mandate electrification of major household appliances and force natural gas bans. This would be devastating to the economy. The cost to switch just four appliances is at least $258 billion to families across the nation, according to Consumer Energy Alliance calculations.
In conclusion: The unnecessary cancellation of the Keystone XL project makes it obvious that Congress and the administration must develop a clear, certain and fair regulatory framework for the country’s energy infrastructure. Why? Because it is irrefutable that energy infrastructure projects are essential to propel the evolution of our energy mix while making immediate environmental gains – for the sake of all Americans.
So, climate activists may be doing flips and high-fiving the death of the Keystone XL project. However, their victory is a loss for consumers, American energy security and the environment they claim to be at the heart of their activism.
David Holt, president of Consumer Energy Alliance, has more than 30 years of experience working for state and federal agencies and Congress and directing outreach and advocacy efforts. David founded HBW Resources in 2005 to provide counsel and guidance to companies regarding governmental and industry energy initiatives, including issues related to energy security, exploration and production, advanced technologies, air quality, and refining. Previously, David served as Vice President of Government Affairs for Hart Energy Services; Senior Legal and Energy Counsel to Chairman James E. Nugent of the Texas Railroad Commission; Counsel to the House Judiciary Committee; and in the Public Affairs and Media Office of the U.S. Department of State under President George H.W. Bush.
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