At an appearance in San Francisco last month, Secretary of State Hillary Clinton tipped her department’s hand in its plans to approve a vast 2,000-mile expansion of the Keystone tar sands pipeline, which would run between Alberta, Canada, and the Texas Gulf Coast.
The original pipeline, which runs between Canada and Illinois, is capable of delivering 435,000 barrels of Canadian tar sands to the United States daily, where it is refined and sold as gasoline. The proposed expansion would contribute as much as an additional 590,000 barrels of daily output.
Secretary Clinton said at the event that the government is “inclined” to give the project the green light, despite opposition from several political leaders and challenges from environmental groups. Those opponents claim that emissions from tar sands is two-to-three times higher than standard refined gasoline, and that potential environmental impacts on the regions through which the Keystone XL will pass, aren’t being properly weighed in the State Department’s decision.
On Friday, eleven senators sent a letter to Clinton urging the DOS to consider several new environmental factors in its assessment, including the threat posed by the pipeline to key neighboring populations and ecologically sensitive areas, and the overall effect it might have on emissions derived from transportation in the United States. “Tar sands is dirty oil,” said the senators in their letter. “Approval of this pipeline will significantly increase our dependence on this oil for decades.”
For her part, Secretary Clinton has pointed out that the oil meets a need that the country is currently unprepared to do without—taking the opportunity to blame Congress for its inability to pass cap and trade legislation, which would use market forces to incentivize the replacement of dirty energy sources like tar sands. “We’re either going to be dependent on dirty oil from the Gulf or dirty oil from Canada,” the Secretary said in defending her position last month.
A Cheap and Dirty Fix for the National Addiction
But drawing more of the nation’s energy supply from tar sands won’t necessarily decrease its dependence on oil from offshore drilling or from hostile foreign regimes, as many supporters of the plan have claimed.
International energy markets work on an interconnected web of supply-demand relationships, determined by how expensive oil is to extract, where it’s going, how much it costs to get it there, and how much of it will be consumed at whatever price it is sold for at market. The cumulative effect of these relationships are delivery contracts, which are traded on futures markets and are largely responsible for determining the price of gasoline at the pump from one month to the next.
As the supply of oil increases relative to demand, prices fall, facilitating more use. So if the United States is serious in its aims to decrease emissions and dependence upon foreign sources of oil, increasing tar sands production could serve to actually undermine both of those efforts over the long run.
A revised environmental assessment and final ruling on the project is expected from the State Department by the end of the year. If the EPA is satisfied with the new assessment, the project will go along as planned, providing raw product to Texas and Louisiana refineries by 2013. If the agency chooses to buck the DOS’s decision, the stage will be set for a conflict that will likely require a final decision from President Obama.