Of course, if I wasn't worth talking to, she wouldn't be reaponding to my posts.
As Republican state officials insist that Canadian oil pipelines are necessary to lower energy costs for American consumers, the fossil fuel giant operating those pipelines is suddenly citing the climate crisis its products are creating as a rationale for raising those prices higher, according to new documents reviewed by the Daily Poster.
Last month, Ohio Republican governor Mike DeWine — who has raked in nearly $400,000 from fossil fuel industry donors — demanded the Biden administration keep open Enbridge’s controversial Line 5 pipeline, which runs under the Great Lakes, as a way to reduce energy prices.
But Enbridge just dropped a bombshell undercutting that argument: the firm told government regulators that climate change means its tar sands pipeline network only has nineteen years left of economic life. That assertion could allow the company to jack up the tolls that its customers pay to transport oil through its pipelines, because pipeline operators are authorized to recoup their operational costs through rate increases — and a shorter timetable means higher levies.
The episode is a spectacle of what’s been called disaster capitalism: In this case, a fossil fuel behemoth is citing the ecological crisis it is intensifying as a justification to extract more profits from consumers already being crushed by higher prices.
“There is something ironic about pipeline companies like Enbridge conceding that they can see the writing on the wall, they’re not going to be competitive or needed less than twenty years from today, and, as a result, they have to raise prices today to account for that,” said Ari Peskoe, director of the Electricity Law Initiative at the Harvard Law School. “There’s something incongruous about that.”
A Changing Environmental and Political Landscape
Enbridge has been doing everything in its power to preserve and expand its massive pipeline network, the largest in North America. The multinational completed construction on its expanded Line 3 pipeline in Minnesota this fall, despite years of heated opposition from Indigenous people, climate activists, and lawmakers. Now the company is working to derail Michigan governor Gretchen Whitmer’s reelection bid, in response to Whitmer’s order aiming to shut down the company’s aging Line 5 pipeline, because a spill could be imminent and the pipeline runs through the Great Lakes.
In that battle, Enbridge has insisted that shutting down Line 5 would cause a spike in fuel prices, because the pipeline supplies ten refineries in the region. And yet, this May, the company told federal energy regulators that its pipelines are likely worth far less because governments are preparing to try to combat the carbon emissions from its products.
The admission was included in filings with the Federal Energy Regulatory Commission (FERC), the US regulatory body which regulates electricity, oil, and natural gas as part of ongoing tariff negotiations with the oil companies that use its pipeline network. During the negotiations, Enbridge filed a depreciation study in May 2021 in which it proposed an accelerated depreciation schedule for its Lakehead System, which transports crude oil from the Alberta tar sands through the Upper Midwest.
In that study, Enbridge estimated that the Lakehead System had an economic life of nineteen more years, a downgrade from its 2016 estimate in which it projected a lifetime of at least thirty years. Enbridge was not required to update those estimates until 2026, but filed the latest depreciation filing five years early as part of the negotiations.
Enbridge cited a number of factors in justifying the shorter expected life of its pipelines, including: “current and anticipated competition to the Enbridge Mainline, actions by state and local governments, and the uncertainty arising from the recent acceleration in the pace of Federal (United States and Canada), state/provincial and local governments passing decarbonization legislation or adopting policies that may influence the market demand for pipelines.”
Enbridge brought up these matters in its tariff negotiations because the rates for using pipelines are set by FERC to account for pipeline companies’ operational costs — infrastructure investments, salaries, maintenance, and other expenses — as well as reasonable profit. As a result, if the economic life of a pipeline ends up being shorter, the company won’t be able to collect payments from customers for as many years, so it can raise rates in order to recover its construction costs.
“These filings take into consideration the changing environmental and political landscape in which we operate this critical piece of energy infrastructure,” Enbridge spokesperson Juli Kellner told Jacobin.
The tar sands companies that move their oil through Enbridge’s pipelines filed a protest with FERC disputing the 2040 truncation date because they don’t want to pay a higher rate. The protest, filed by the Canadian Association of Petroleum Producers (CAPP), asks FERC to “investigate the factual basis of the claims that Enbridge makes regarding its remaining economic life.” According to the protest, “The claim that the Lakehead System may be, indeed will be, out of business in [2040] is remarkable given the entirety of the factual circumstances.”
Kellner said that the depreciation study “is used to determine the cost-of-service toll,” but noted: “It may not reflect the actual life of the assets.”
It’s possible that Enbridge and its customers will come to a settlement through ongoing negotiations before FERC has to intervene.
Whether or not the pipeline company and the oil firms come to an agreement, the negotiations point to a problem that experts say will become increasingly common in coming years: As the big business of extracting and moving crude oil comes to an end, who should bear the cost and risk of that transition?
Passing the Buck
One of the central issues considered during the Minnesota Public Utility Commission’s multiyear permitting process for the Line 3 pipeline through the state was whether there was sufficient demand for oil to justify building the new pipeline. Enbridge said in its April 2015 application for a “certificate of need” for the pipeline: “The anticipated economic life of the Project will be no less than 30 years.”
Enbridge repeated that estimate over the course of the permitting process, said Paul Blackburn, an attorney for Honor the Earth, an environmental justice organization which has opposed Line 3. “Thus, the [new depreciation study] represented a fundamental shift in Enbridge’s understanding of its future,” Blackburn said.
Enbridge has said the latest study does not apply to the Line 3 pipeline because it was under construction when the study was conducted. But Blackburn disputed that a single passage of the pipeline network could outlast the rest.
“Enbridge implies that new Line 3 can keep operating even if the rest of the Mainline System is not, and of course this is a blatantly false statement, because new Line 3 is just one piece of the system: It receives crude oil from other upstream pipelines and tanks owned by Enbridge, and new Line 3 delivers oil to other downstream pipelines and tanks,” he said. “If these other Mainline System pipelines and tanks ceased operation, it would be impossible for new Line 3 to continue operating.”
But experts say Enbridge’s new statement does raise questions about who should bear the cost of the accelerated depreciation.
“The environmental groups and the oil and gas companies agree on accelerated depreciation. The fossil fuel companies recover the money for their infrastructure and the environmental groups get an earlier shutdown,” said James Coleman, professor of energy law at Southern Methodist University. “The challenge for that is, and has always been, the consumer groups. And if you start charging more, and that shows up in oil and gas prices — we’ve seen that might be politically sensitive.”
Some of those costs will be assumed by energy customers in Minnesota, where Enbridge — with the support of local officials and police — forced through completion of its Line 3 pipeline this summer in the face of herculean efforts by Indigenous-led groups to stop it.
“The oil industry attempts to pass all of its costs onto consumers, so it is likely that Enbridge’s tariff rate increases will be passed onto consumers,” said Blackburn of Honor the Earth. “The supporters of new Line 3 who claimed it would reduce fuel costs in Minnesota because it would increase supply completely disregarded the complexity of this market.”
It doesn’t help that no one is sure how much oil will be needed several decades from now — and that’s not just because Enbridge and oil companies are currently arguing over the matter in tariff negotiations. Enbridge’s proposed oil pipeline truncation date, which tar sands companies are lambasting as being too early, is still far later than what scientists say is necessary to stave off catastrophic global warming.
“We live with a certain amount of cognitive dissonance about these inconsistent commitments, and for companies and regulators like FERC, they really have to square that circle and make some kind of prediction about what’s going to happen,” Coleman said. “The rates that they are recovering today depend on what oil use is going to be in 2040 versus 2050. We have this wild asymmetry in predictions about what oil use will be in 2022. So how are we supposed to have accurate predictions about 2040 or 2050?”
Stranded Assets
Regulators and lawmakers will also have to soon tackle a bigger question: Who should bear the costs of soon-to-be stranded assets, such as natural gas and oil pipelines?
If a careful plan isn’t put in place to account for the costs of pipelines that will soon be obsolete, the burden will likely fall on those who are least equipped to handle it, according to a 2019 report by the Environmental Defense Fund in California on the state’s natural gas infrastructure.
“What [would end] up happening is you make [electricity bills] more expensive through accelerated depreciation, which will further motivate customers who can afford to leave the gas system early,” said Michael Colvin, coauthor of the report and director of Regulatory and Legislative Affairs for California at the Environmental Defense Fund. “That will leave behind customers who aren’t able to electrify, so you end up with a tradeoff where wealthier and whiter customers who own their own homes and have more site control electrify, while the remaining customer base, which tends to be low and middle income, and more renters, are left behind.”
That’s why in California, where newly passed climate legislation is likely to lead utilities to shorten the lifespan of their natural gas pipelines, according to the report, advocates and regulators are trying to take a forward-looking approach to the situation, including phasing gas out on a planned timeline.
If governments set targets and require utilities to submit plans to recover their costs, the eventual abandonment of this infrastructure can be managed with an emphasis on equity, Colvin explained. There are tools that policymakers have at their disposal to shield low-income customers from bearing most of the risk, such as covering some of the cost of decommissioning pipelines with tax dollars, or forcing utilities to eat some of the cost through lower profits. Regulators already have the authority to reduce the profits that companies like Enbridge earn from rate collection.
Increased energy bills aren’t the only way the pipelines’ shortened life spans will impact the people who live in the regions that have been torn apart by the construction of Line 3, which contributed to droughts and leaked drilling fluids in waterways during construction last summer.
In Minnesota, Honor the Earth has responded by petitioning state regulators to make sure Enbridge keeps its promise, as part of the permitting process, to set aside money for the eventual decommissioning of the pipeline, which is estimated to cost $1.5 billion or more.
“The Commission should not wait to act on the matter,” Honor the Earth said in the petition. “It should promptly establish a robust and secure funding mechanism as soon as possible to ensure that new Line 3, once abandoned, does not become a financial burden on private as well as state and local government landowners.”
Not only does it make perfect economic sense, but raising prices for energy is the best way to decrease fossil fuel use.
“There is something ironic about pipeline companies like Enbridge conceding that they can see the writing on the wall, they’re not going to be competitive or needed less than twenty years from today, and, as a result, they have to raise prices today to account for that,” said Ari Peskoe, director of the Electricity Law Initiative at the Harvard Law School. “There’s something incongruous about that.”
3. Any investment made now to ensure people have enough fuel to heat their homes during the transition to renewable energy needs to be paid for.
Which of these three basic points do you have a problem with.
Arguing that there should be cheap fossil fuels is fundamentally at odds with any effort to address climate change.
This argument is silly©.
The simple reality is that we have a capitalist system.
You want people to drive less, or to buy electric cars... it's simple. Raise the price of gas.
That is bullshit Hightor!
When I pointed out that you it was profitable corporations that gave liberal the vaccines they want to force on everyone...
Corporations are now giving us electric cars, solar panels, batteries...
Then let up with the ridiculous extreme political rhetoric and lets do something productive.
This extremism is making things worse.
But Enbridge just dropped a bombshell undercutting that argument: the firm told government regulators that climate change means its tar sands pipeline network only has nineteen years left of economic life. That assertion could allow the company to jack up the tolls that its customers pay to transport oil through its pipelines, because pipeline operators are authorized to recoup their operational costs through rate increases — and a shorter timetable means higher levies.
The episode is a spectacle of what’s been called disaster capitalism: In this case, a fossil fuel behemoth is citing the ecological crisis it is intensifying as a justification to extract more profits from consumers already being crushed by higher prices.
By now, most of us have heard the term, “tar sands.” These underground deposits of thick, sticky petroleum called bitumen can be found all over the world, but a massive deposit in Alberta, Canada, often gets the most attention. Oil companies extract more than a million barrels of bitumen a day from deposits beneath Alberta’s peat bogs and ancient boreal forests, destroying those natural areas in the process. Calgary-based oil and gas transportation company Enbridge then pumps the bitumen through its system of pipelines, including the 645-mile Line 5 that runs across Wisconsin.
“The Line 5 Pipeline carries petroleum originating from the Canadian tar sands and North Dakota’s Bakken oil fields from Superior, across northern Wisconsin, and through Michigan back to a refinery in Canada for processing,” explains Clean Wisconsin staff scientist Paul Mathewson.
Tar sands oil is carried to Line 5 via another Enbridge pipeline, the embattled Line 3, which runs from Canada across Minnesota. But before tar sands oil can wind its way through some of the upper Midwest’s most pristine natural areas and critical waterways, including the shores of Lake Superior and the Straights of Mackinac, it must be heavily processed.
“Tar sands are really a mixture of bitumen, sand, clay and water,” Mathewson explains. “Unlike conventional crude oil, which can be pumped from underground deposits and then piped to refineries, bitumen requires much more effort to extract and transport.”
That effort takes energy, largely supplied by fossil fuel combustion. There are two main, and ways to get bitumen out of the tar sands deposits, and neither one is easy.
“Surface, open-pit mining is used for shallow deposits, and the bitumen is extracted by mixing the oil sand with hot water to make a slurry that can be pumped to a processing facility where the bitumen is separated from the water and sand,” Mathewson says. “Deeper deposits are extracted by injecting hot steam into the sands to reduce the bitumen’s viscosity, allowing it to be pumped to the surface.”
Once the tar-like substance is collected, it’s still far too thick to be pumped through a pipeline. So it is either processed on site into a synthetic crude oil—a less viscous product that can piped—or it is diluted with a mixture of solvents.
“Fuels derived from tar sands oil create about 20% more greenhouse gases than conventional fuels because it takes so much effort just to get them out of the ground and pumped to refineries. Then you have to add in the significant carbon releases of the peatland where deposits are located, which are destroyed by the mining process,” Mathewson says.
These additional greenhouse emissions make tar sands oil one of the dirtiest sources of energy out there. To make matters worse, the risk of environmental catastrophe during transport is very real. Enbridge’s Line 5 has spilled oil into the environment dozens of times since its construction 68 years ago. Line 3 created the worst inland oil spill in U.S. history when it leaked 1.7 million gallons in Grand Rapids, Minn., in 1997. And spills involving tar sands oil can be especially devastating.
“This diluted bitumen product in the pipeline, referred to as ‘dilbit,’ acts differently than conventional crude oil if spilled into the environment. In aquatic environments, dilbit is more difficult to clean up, since the dilution mixture rapidly evaporates or separates from the bitumen. The dense and heavy bitumen then sinks instead than staying on the surface—like most constituents of conventional crude oil are prone to do—where it is easier to find and clean up,” Mathewson says.
As tribes, environmental groups, municipalities and state governments like Michigan battle to evict Line 5 and the tar sands oil it carries, scientists warn that the rest of that thick, tarry oil needs to stay in the ground.
“As we attempt to keep global warming under 2°C under the Paris Agreement, the Canadian tar sands are really getting a lot of attention,” Mathewson says. “A study published in the journal Nature analyzing which fossil fuel reserves should be left unused concluded that tar sands oil production would have to drop to ‘negligible’ levels to meet that goal. We can’t keep extracting and using this stuff and still hope to avoid the worst impacts of climate change.”
What are tar sands?
The Alberta oil sands are one of the largest remaining oil reserves on the planet.
Unlike conventional oil deposits which feature liquid oil captured in porous rock, the oil sands are sand formations embedded with a thick, sticky oil called bitumen.
How are oil sand extracted?
Conventional oil is able to flow in porous rock and be pumped out as a liquid. Bitumen, on the other hand, must be extracted from the sand by industrial processes involving a great deal of heat and pressure.
This requires a large amount of energy, mostly natural gas, which is why the oil sands generate a far higher level of carbon emissions than conventional oil fields. Why are oil sands bad? In short, it takes a lot of energy resources to extract the oil making the oil sands the lowest grade large oil resource currently in production.
The Oil Sands – Another Example of Reckless Exploitation in Canada
The high cost of production and the enormous legacy costs of cleanup makes the oil sands a large money-loser in the long run for Alberta and Canada. High emissions and large tailing ponds make the oil sands an environmental negative from the start.
The oil sands are a seductively large and accessible resource. In some places, it is possible to dig the oil-laden sand out with a shovel. But it has very high processing and legacy costs, which have made it a money-loser over the past 20 years given the fluctuating price of oil. Not only do the Alberta oil sands have a negative environmental impact - they don’t make sense economically.
The oil sands industry may turn a lot of dollars but is likely to continue losing money in a world determined to move away from fossil fuels. On-going small scale oil sands production in Alberta may be a strategic option for Canada, but large scale expansion is throwing good money after bad - without even beginning to count the environmental impact.
What is EROI?
EROI stands for Energy Returned on Energy Invested. In simple terms, this has to do with the amount of energy that something yields compared to the amount of energy it takes to extract it. It is a much more comprehensive metric than a measurement in dollars. See our EROI video which explains this critical metric.
Key Facts About the Alberta Oil Sands & Oil Production
In the Alberta Oil Sands:
It takes the energy equivalent of one barrel of oil to extract and produce four barrels of oil for an EROI of 4:1. (EROI - Energy Returned for Energy Invested)
In oil’s glory days, oil from the rich virgin Middle East and Texas fields returned 100 barrels for every one input - a staggering EROI of 100:1. But technology has been unable to keep pace with resource depletion and the world average EROI continues to decline.
Currently, the world average conventional oil field yields 17 barrels of oil for every barrel equivalent of energy consumed in production. (EROI of 17:1) - in stark comparison once again to the very low 4:1 ratio of the Alberta oil sands
The amount of bitumen contained in a cubic metre of the oil sands is about 1 barrel.
Conventional oil fields yield up to 20 percent of the oil in the ground.
Up to 50-60 percent of bitumen in the oil sands can be recovered by heating the sand in place and draining it off once it is liquefied. This is called the in-situ process.
In Alberta, the oil sands mining process recovers more than 90 percent of the bitumen in a much more complex process that involves digging up and transporting the sand to a processing facility, costing even more time, chemicals and resources
Before committing so heavily to an undertaking like the oil sands, public policymakers should have put aside their fascination with dollars and given the project a full lifecycle biophysical economics review. The environmental and economic impact of the oil sands is just too critical to ignore.
The basics through this real physical world lens would have flagged the very low and uncompetitive EROI relative to all world producers, the landlocked geography of the resource, the high emissions in production and the massive cleanup costs.
The Alberta oil sands have a direct environmental and economic impact. Canada’s resource development policy should be based on full lifecycle social, environmental and economic costs and benefits, rather than on the ability of powerful interests to mould public policy through large media advertising budgets and political donations.
Alberta Oil Sands - 5 strikes and you’re out!
The Oil Sands have:
A World low EROI
High emissions
Extreme legacy costs to be borne by taxpayers
High cost well above foreseeable oil price levels
Financially destabilizing for Alberta and Canada
The takedown of the notorious Keystone XL (KXL) tar sands pipeline will go down as one of this generation’s most monumental environmental victories. After more than 10 years of tenacious protests, drawn-out legal battles, and flip-flopping executive orders spanning three presidential administrations, the Keystone XL pipeline is now gone for good. The project’s corporate backer—the Canadian energy infrastructure company TC Energy—officially abandoned the project in June 2021 following President Joe Biden’s denial of a key permit on his first day in office. But the path to victory wasn’t always clear. Many had hoped that the disastrous project was finally done for in November 2015, when the Obama administration vetoed the pipeline—acknowledging its pervasive threats to climate, ecosystems, drinking water sources, and public health. But immediately after taking office, President Donald Trump brought the zombie project back to life, along with the legal battles against it. By the time President Biden took office in 2021, ready to fulfill his campaign promise to revoke the cross-border permit, the dirty energy pipeline had become one of the foremost climate controversies of our time.
Here’s everything you need to know about the historic KXL fight, its eventual takedown, and what it now means for pipelines still waiting in the wings.
What Is Keystone XL?
The Keystone XL pipeline extension, proposed by TC Energy (then TransCanada) in 2008, was initially designed to transport the planet’s dirtiest fossil fuel, tar sands oil, to market—and fast. As an expansion of the company’s existing Keystone Pipeline System, which has been operating since 2010 (and continues to send Canadian tar sands crude oil from Alberta to various processing hubs in the middle of the United States), the pipeline promised to dramatically increase capacity to process the 168 billion barrels of crude oil locked up under Canada’s boreal forest. It was expected to transport 830,000 barrels of Alberta tar sands oil per day to refineries on the Gulf Coast of Texas.
Some three million miles of oil and gas pipelines already run through our country, but KXL wasn’t your average pipeline, and tar sands oil isn’t your average crude.
Keystone XL and Tar Sands
Beneath the wilds of northern Alberta’s boreal forest is a sludgy, sticky deposit called tar sands. These sands contain bitumen, a gooey type of petroleum that can be converted into fuel. It’s no small feat extracting oil from tar sands, and doing so comes with steep environmental and economic costs. Nevertheless, in the mid-2000s, with gas prices on the rise, oil companies ramped up production and sought additional ways to move their product from Canada’s remote tar sands fields to midwestern and Gulf Coast refineries.
The proposed Keystone XL extension actually comprised two segments. The first, a southern leg, had already been completed and now runs between Cushing, Oklahoma, and Port Arthur, Texas. Opponents of this project—now called the Gulf Coast Pipeline—say that TC Energy took advantage of legal loopholes to push the pipeline through, obtaining authorization under a U.S. Army Corps of Engineers nationwide permit and dodging the more rigorous vetting process for individual permits, which requires public input. The second segment was the hotly contested 1,209-mile northern leg—a shortcut of sorts—that would have run from Hardisty, Alberta, through Montana and South Dakota to Steele City, Nebraska.
In 2015, the U.S. State Department, under President Barack Obama, declined to grant the northern leg of the Keystone XL project the permit required to construct, maintain, and operate the pipeline across the U.S.–Canada border—a permit that President Trump later granted and President Biden once again revoked.
Keystone XL Pipeline Environmental Impact
Leaks and the pipeline
Tar sands oil is thicker, more acidic, and more corrosive than lighter conventional crude, and this ups the likelihood that a pipeline carrying it will leak. Indeed, one study found that between 2007 and 2010, pipelines moving tar sands oil in Midwestern states spilled three times more per mile than the U.S. national average for pipelines carrying conventional crude. Since it first went into operation in 2010, TC Energy’s original Keystone Pipeline System has leaked more than a dozen times; one incident in North Dakota sent a 60-foot, 21,000-gallon geyser of tar sands oil spewing into the air. Less than two years before the project was finally pulled, the Keystone tar sands pipeline was temporarily shut down after a spill in North Dakota of reportedly more than 383,000 gallons in late October 2019. And the risk that Keystone XL would have spilled was heightened because of the extended time the pipe segments were left sitting outside in stockpiles. “A study published in early 2020, co-authored by TC Energy’s own scientists, found that the anti-corrosion coating on the project’s pipes was damaged from being stored outside and exposed to the elements for the last decade,” notes NRDC senior attorney Jaclyn Prange, who has spent years working on KXL litigation.
Complicating matters, leaks can be difficult to detect. And when tar sands oil does spill, it’s more difficult to clean up than conventional crude because it immediately sinks to the bottom of the waterway. People and wildlife coming into contact with tar sands oil are exposed to toxic chemicals, and rivers and wetland environments are at particular risk from a spill. (For evidence, note the 2010 tar sands oil spill in Kalamazoo River, Michigan, a disaster that cost Enbridge more than a billion dollars in cleanup fees and took six years to settle in court.) Keystone XL would have crossed agriculturally important and environmentally sensitive areas, including hundreds of rivers, streams, aquifers, and water bodies. One was Nebraska’s Ogallala Aquifer, which provides drinking water for millions as well as 30 percent of America’s irrigation water. A spill would have been devastating to the farms, ranches, and communities that depend on these crucial ecosystems.
What is tar sands oil?
All facets of the tar sands industry pose a threat to the environment. Its mines are a blight on Canada’s boreal, where mining operations dig up and flatten forests to access the oil below, destroying wildlife habitat and one of the world’s largest carbon sinks. The mining depletes and pollutes freshwater resources, creates massive ponds of toxic waste, and threatens the health and livelihood of the First Nations people who live near them. Refining the sticky black gunk produces piles of petroleum coke, a hazardous, coal-like by-product. What’s more, the whole process of getting the oil out and making it usable creates three to four times the carbon pollution of conventional crude extraction and processing. “This isn’t your grandfather’s typical oil,” says Anthony Swift, director of NRDC’s Canada project. “It’s nasty stuff.”
Keystone XL and climate change
A fully realized Keystone XL would have led to more mining of that “nasty stuff” by accelerating the pace at which it’s produced and transported. (Indeed, Keystone XL was viewed as an essential ingredient in the oil industry’s plans to triple tar sands production by 2030.)
It would also have led to greater greenhouse gas emissions—which, the latest scientific reports makes clear, we simply can’t afford if we’re to avoid the most catastrophic climate impacts. The U.S. Environmental Protection Agency (EPA) initially stated that, on a wells-to-wheels basis, tar sands oil emits 17 percent more carbon than other types of crude, but several years later, the State Department revised this number upward, stating that the emissions could be “5 percent to 20 percent higher than previously indicated.” That means burdening the planet with an extra 178.3 million metric tons of greenhouse gas emissions annually, the same impact as 38.5 million passenger vehicles or 45.8 coal-fired power plants. Finally, massive fossil fuel infrastructure investments like KXL undermine efforts to minimize global warming and prioritize clean energy like wind and solar. Leading climate scientist and former NASA researcher James Hansen has warned that fully exploiting Canada’s tar sands reserves by moving forward with these projects would mean “game over” for our climate. In short, tar sands oil represents no small threat to our environment, and our best stance against it, as the rallying cry goes, is to “keep it in the ground.”
Keystone XL Pipeline Controversy
Opposition to Keystone XL centered on the devastating environmental consequences of the project. The pipeline faced more than a decade of sustained protests from environmental activists and organizations; Indigenous communities; religious leaders; and the farmers, ranchers, and business owners along its proposed route. One such protest, a historic act of civil disobedience outside the White House in August 2011, resulted in the arrest of more than 1,200 demonstrators. “This is not a pipeline to America,” said the late civil rights activist Julian Bond, among the many arrested. “It’s a pipeline through America, and it threatens to be a disaster for us if it leaks poisons on the way.” Leading scientists and economists came out in opposition to the project, in addition to unions and world leaders such as the Dalai Lama, Archbishop Desmond Tutu, and former president Jimmy Carter (together, these and other Nobel laureates have written letters against the project). In 2014, more than two million comments urging a rejection of the pipeline were submitted to the U.S. Department of State during a 30-day public comment period.
But the groundswell of public protest was up against a formidable opponent–hundreds of millions spent on lobbying by the fossil fuel industry. In the two years leading up to the November 2014 midterm elections, the fossil fuel industry spent more than $721 million to court allies in Congress. When industry-friendly politicians took charge of both congressional houses in January 2015, their first order of business was to pass a bill to speed up approval of Keystone XL. (That effort failed.) Later, fossil fuel companies funnelled millions into Trump’s 2017 inauguration ceremony, days after which he brought the Keystone XL project back from the dead, and ramped up federal lobbying efforts in the first months of his administration.
“So what if there’s no pipeline? Big Oil will find a way.”
One of the central arguments made by pipeline pushers was that tar sands expansion will move forward with or without Keystone XL. This has proved to be untrue. Dealing in tar sands oil is an expensive endeavor. It’s costly both to produce and to ship, particularly by rail, which would be an alternative to Keystone XL. Indeed, moving crude by rail to the Gulf costs substantially more than moving it by pipe. For companies considering whether to invest in a long-lived tar sands project (which could last for 50 years), access to cheap pipeline capacity plays a major role in the decision to move forward or not. Without Keystone XL, the tar sands industry has been forced to cancel projects rather than shift to rail, subsequently leaving more of the earth’s dirtiest fuel in the ground where it belongs.
Keystone Pipeline Economic Facts
Will the pipeline create jobs?
The oil industry lobbied hard to get KXL built by using false claims, political arm-twisting, and big bucks. When TC Energy said the pipeline would create nearly 119,000 jobs, a State Department report instead concluded the project would require fewer than 2,000 two-year construction jobs and that the number of full-time, permanent jobs would hover around 35 after construction.
Furthermore, we know that ambitious action on climate change—including investments in green energy alternatives—carries huge potential for job creation.
Will the pipeline lower gas prices?
Dirty energy lobbyists claimed developing tar sands would protect our national energy security and bring U.S. fuel prices down. But NRDC and its partners found the majority of Keystone XL oil would have been sent to markets overseas (aided by a 2015 reversal of a ban on crude oil exports)—and could have even led to higher prices at U.S. pumps.
President Trump and the Keystone XL Pipeline
When the Obama administration refused to grant the cross-border permit necessary to build TC Energy’s Keystone XL oil pipeline in November 2015, it struck a blow against polluting powers and acknowledged the consensus on this misguided project from a wide swath of communities, experts, and organizations. The decision echoed a seven-year State Department review process with EPA input that concluded the pipeline would fail to serve national interests.
Upon entering office, President Trump—with his pro-polluter cabinet of fossil fuel advocates, billionaires, and bankers—quickly demonstrated that his priorities differed. On his fourth day in office, Trump signed an executive order to allow Keystone XL to move forward. On March 28, 2017, his State Department illegally approved a cross-border permit for the pipeline, reversing the Obama administration’s prior determination that KXL would not serve the national interest. When that failed—thanks to a lawsuit brought by NRDC and other groups—Trump reissued the cross-border permit himself. “We would score a victory, and it would have huge ramifications for holding off construction at critical times,” says NRDC attorney Cecilia Segal, who has worked on KXL litigation since 2017. “But then the Trump administration would do something to undercut us outside of court.” The administration also attempted to issue other permits for the project, all based on flawed environmental analyses, eventually prompting more lawsuits, including two from NRDC and its allies.
Opposition outside the courts was swift and strong as well. Farmers, ranchers, tribes, and conservation groups helped keep the project stalled for Trump’s full four years in office, despite his best efforts to expedite its approval.
President Biden and the End of the Keystone XL Pipeline
Even as Trump and TC Energy tried to revive the pipeline, polls showed that a majority of Americans opposed it. The market case had also deteriorated. Low oil prices and increasing public concern over the climate have led Shell, Exxon, Equinor (then Statoil), and Total to either sell their tar sands assets or whittle them down. Because of this growing market recognition, major new tar sands projects haven't moved forward with construction for years, despite investments from the government of Alberta, Canada. For example, in 2020, Teck Resources withdrew its 10-year application to build the largest tar sands mine in history, citing growing concern surrounding climate change in global markets.
On the campaign trail, Biden vowed to cancel the Keystone XL cross-border permit should he win the presidency—and on his first day in office, he made good on that promise. The revoked permit became the final nail in the pipeline’s coffin. By that point, Keystone XL faced an unfriendly administration, numerous legal challenges, declining oil prices, worsening climate impacts, and a growing movement of climate organizers—along the pipeline’s route and around the world—unwilling to look the other way. In June, TC Energy announced that it was abandoning its plans for building the pipeline for good—putting an end to a fossil fuel project that had loomed over waterways, communities, and the climate for more than a decade. “Keystone XL was a terrible idea from the start,” Swift said. “It’s time to accelerate our transition to the clean energy sources that will power a prosperous future.”
While the tar sands industry was once seen as an unbeatable opponent in a David-and-Goliath fight, the victory against Keystone XL shows that the tables have begun to turn—and that more power now lies with the advocates for climate justice than ever before. “The advocacy, the public mood—on climate change, on oil, on tar sands—is ultimately what mattered,” says Prange. “Litigation was an extremely important tool in holding off the pipeline while waiting for the political process to work, but the movement is what won the fight.”
The strategies it took to win, both in the courtroom and out on the streets, can be harnessed to stop the pipeline projects still waiting in the wings, like the Mountain Valley natural gas pipeline, or to shut down the ones currently doing harm, like the Dakota Access Pipeline or Enbridge’s Line 3 expansion in Minnesota. “The era of building fossil fuel pipelines without scrutiny of their potential impact on climate change and on local communities is over,” Swift says.
