Seven Reasons to Walk Away From Keystone XL

August 30th, 2014

There is less than a month before the justices of the Nebraska Supreme court hear arguments in a case that will have a big impact on TransCanada’s proposed Keystone XL pipeline. The court will hear the argument that ranchers and farmers in the pipeline’s path must have their lifestyles ruined first before standing up to the bullying and lies by TransCanada. I’m not making that up – it’s the actual argument that TransCanada’s apologists are saying. Good luck with that.

A loss in court for TransCanada would be significant for the premier pusher of tar sands, the dirtiest form of oil on the planet. The result would be hitting the “restart” button, with new pressure to reroute the pipeline and its highly toxic, spill-prone contents away from the Ogallala Aquifer, the source of drinking water for three million Americans and countless, drought-stricken farms and ranches.

However, the company’s Keystone problems are far more extensive than just this court case. Markets and the truth are walking away from this project. This is despite the desperate, high-dollar propaganda and influence-peddling campaign by the tar sands industry. Keystone’s rejection is not just the smart thing to do. It’s increasingly inevitable.

Impending loss now defines this project.

Since the President’s June 2013 speech on the importance of solving the climate crisis, at least eight events have happened that indicate the pipeline will not and should not be built:

  1. Keystone XL Can’t Pass The President’s Climate Test: President Obama declared he’d approve Keystone “only if this project does not significantly exacerbate the problem of carbon pollution.” Mounting evidence from scientists and researchers worldwide show you can’t square the circle of addressing the climate crisis while developing the dirtiest source of oil in the world. These experts include:
    1. Dr. Marc Jaccard, an environmental economist with Simon Fraser University;
    2. Dr. John Abraham of the University of St. Thomas; and,
    3. Clare Demerse, federal policy director at the Pembina Institute.
  2. In addition, a March 2014 report by The Carbon Tracker Initiative found that Keystone XL would enable oil companies to generate 5 billion tons of CO2 by 2050, equivalent to the annual carbon pollution from one billion cars, or 1,400 coal plants.

  3. TransCanada has been caught lying repeatedly about where Keystone XL’s oil, once refined, will go. TransCanada has frequently characterized Keystone XL as “energy from a trusted ally” that will ensure American energy independence. However, when asked directly how much of the refined oil will stay in the U.S., TransCanada CEO Russ Girling said, “every drop of crude will stay in the country.” [Emphasis added.] But when TransCanada executive Alexander Pourbaix was asked under oath to state how much oil would stay in the U.S. for our energy independence, he said: “I can’t do that.” In fact, statements from tar sands industry executives and analysts have said as much. In a Bloomberg News story with a very telling headline, “Total CEO Urges Keystone Approval to Unplug Alberta Bottleneck,” Total’s Christophe de Margerie said, “The pipeline has to be done” in order to open up tar sands development, which will produce significant greenhouse gas emissions as a result.
  4. The oil isn’t “coming out of the ground anyway,” it only comes out at scale uniquely critical to scaling tar sands – Perhaps the biggest lie pushed by the tar sands lobby is that Keystone XL doesn’t have a significant pollution footprint because the tar sands will “come out of the ground anyway,” regardless of the path to market. Except, that it won’t. Other pipelines don’t reach the same unique, large and specialized refining capacity on America’s Gulf Coast. And rail shipments can’t replace Keystone’s efficiency in getting this dirty oil to the unique, large-scale refining capacity on America’s Gulf Coast. Rail volume can’t equal that of pipelines. (The hazard of rail shipments isn’t an argument for pipelines; it’s another argument for keeping filthy tar sands oil in the ground). Keystone XL is the only path to rapidly scaling this filthy oil.
  5. Keystone XL’s South Dakota Permit Has Expired: TransCanada will have to prove to a group of elected members of South Dakota’s Public Utilities Commission (PUC) that it still meets the original conditions for approval set four years ago on June 29, 2010. There’s a lot that’s changed that TransCanada will have to explain.
  6. Given the pipeline’s heightened profile, the PUC will receive challenges to the pipeline via public comments and requests to appear at any hearings. Challenges will likely focus on three areas: 1) the pipeline would cross and impact parts of the ceremonial, burial and other culturally significant sites to the Sioux; 2) the pipeline could have a devastating ecological impact on the sensitive Sand Hills region, which extends into South Dakota from Nebraska, wetlands and other areas along its path; and 3) the oil from the pipeline is not needed given the availability of light oil from fracking and crude oil through rail, barge and other pipelines.

    In addition, in an interview with South Dakota Public Broadcasting, Commissioner Gary Hanson said since the Keystone XL’s route through Nebraska is uncertain pending the State Supreme Court’s decision, the South Dakota PUC may not reissue a permit until there is a route through Nebraska. Any changes to Nebraska’s route could affect the South Dakota route, and an altered route could require a more robust examination of the project since the time the pipeline was previously approved.

  7. Security is lacking:recent threat assessment by retired SEAL Command Master Chief Dave Cooper found that KXL would pose a very attractive “soft target” for terrorists due to its location, its high profile and the large amount of highly toxic and flammable material it would carry across farmlands and public waterways. Cooper found that “a handful of terrorists could use just four pounds of explosives at each of three pump facilities” to “trigger a catastrophic spill of 7.24 million gallons of dilbit (with its highly toxic chemicals).” In response, the Transportation Security Administration admitted to Businessweek that it had not run the threat assessment that Cooper suggested was needed.
  8. Keystone Could Endanger Water Supplies for Millions of People in Its Path: According to the Sierra Club, “Keystone XL pipeline would cross more than a thousand U.S. rivers, streams, lakes, and wetlands, including the Ogallala aquifer, which supplies 81% of water used in the Great Plains, drinking water for two million Americans, and one third of the water used for agriculture in our country.” A Keystone XL spill into those water supplies could be catastrophic for the communities impacted.
  9. TransCanada and the tar sands lobby have been caught lying again – this time on job claims: Between 2010 and 2013, TransCanada and Keystone XL supporters have changed projected job numbers at least 11 times. The numbers differ significantly from the State Department’s own study of Keystone XL’s job creation potential.

Five Energy Stories Worth Reading Today (8/29/14)

August 29th, 2014

Here are five recommended reads for today (8/29/14).

  1. Bloomberg reports: “A government-appointed panel gave Australian Prime Minister Tony Abbott two options to cut emissions more cheaply: either scrap or weaken its main clean-energy program. Accepting either would imperil A$20 billion ($19 billion) of existing projects and shut the door on new investment.”
  2. According to Reuters, “Power company Duke Energy Corp outlined plans to retire the remaining coal-fired stations at its Ohio plant by the end of the month as it looks to cope with tightening power plant emission regulations.”
  3. Greentech Media reports: “When it comes to the aging U.S. grid, ASCE estimates that there’s a $94 billion investment gap on both the distribution system and transmission system. That doesn’t even account for the coming turnover of aging power plants, which are 30 years old on average. However, that gap is beginning to close a bit on the transmission system. “
  4. According to Newsweek, “On the books since the 1960s, long before climate change was ever on the negotiating table, Section 115 is remarkably applicable to the current challenge of climate negotiations, says Ann Carlson, a professor of environmental law at UCLA and a director of the school’s Emmett Institute on Climate Change and the Environment.”
  5. Climate Progress reports, “A fire broke out at BP’s largest U.S. refinery on Wednesday night after a compressor exploded in one of the refinery’s units, sending shakes through local homes and injuring one worker, according to media reports.”

BNEF Does “Thought Experiment” on Fossil Fuel Divestment Achieving “Trillion-Dollar Scale”

August 28th, 2014

The folks at Bloomberg New Energy Finance (BNEF) are out with a fascinating paper, which they call a “thought experiment,” on the fossil fuel divestment movement – of which we’re big supporters – and what it would look like if it achieved “trillion-dollar scale.” Here are a few key points, followed by some thoughts of our own.

  1. Although the fossil fuel divestment movement, led by Bill McKibben, has some momentum, “divestment calls are not enough to move a needle calibrated in the trillions of dollars.”
  2. Fossil fuel divestment is neither imminent nor inevitable. But, neither is it impossible for motivated investors.” But if divestment “were to achieve trillion-dollar scale,  what would it look like?”
  3. Divestment represents both a challenge and an opportunity:Oil and gas divestment will be a challenge;” “Coal divestment could be relatively easy;” “Re-investment in clean energy requires investor appetite and structures for true scale.”
  4. Any large-scale divestment movement beyond campuses, churches, and municipalities will require engaging and persuading firms such as BlackRock, Vanguard, State Street, and Capital Group – each with more $1trn of assets under management – to reconsider their portfolios. Any large-scale divestment movement beyond campuses, churches, and municipalities will require engaging and persuading firms such as BlackRock, Vanguard, State Street, and Capital Group –each with more $1trn of assets under management – to reconsider their portfolios.”
  5. Clean energy has come a long way in the past decade – technologically, financially, and in its business models –but..it does not have the scale of other multi-trillion dollar sectors; its equities are liquid but volatile; and its yield instruments are still very small.” Also, “clean energy as an asset class is simply not large enough to absorb substantial amounts of capital divested from fossil fuels
  6. What could change this paradigm?  1) scale; 2) investment vehicles; 3) perception
  7. There are, however, a number of trillion dollar-plus sectors that could absorb divested dollars. The seven sectors below [IT, Pharmaceuticals, Food & Beverage, Engineering, REITs, Automobiles, Industrials] are highlighted to absorb fossil fuel divested capital not just because of scale, but because each also includes companies where minimizing fossil fuel use, creating greater energy efficiency, or manufacturing and servicing a lower-carbon energy system is part of the growth strategy

Generally speaking, we like this analysis and believe it rings true.  The bottom line is that divestment from fossil fuels is absolutely feasible, the only real question being whether there are attractive – and sufficiently large – alternative investment vehicles for that capital. Fortunately, those vehicles are available, and one of them is clean energy itself.  Even if clean energy isn’t large enough at the moment to absorb every dollar of divested capital from fossil fuels, that could be the case in the future with increased clean energy scaling, investment vehicles, and positive perception — all of which the industry is working on.

In addition, there are many industries out there, as BNEF points out, that are integrating cleantech into their cost-reduction and sustainability planning. For instance, high-tech firms like Google require enormous amounts of reliable, sustainable, economically attractive energy, which is one big reason why they are shooting to go 100% renewable. And most firms these days realize that cutting energy waste – in their buildings, manufacturing processes, transportation fleets, etc. – is a smart thing to do for their bottom line. All of those areas offer attractive possibilities for investors moving their money out of fossil fuels and looking for alternatives. They also offer the potential for the “trillion-dollar scale” needed to defund dirty energy for good.

Five Energy Stories Worth Reading Today (8/28/14)

August 28th, 2014

Here are five recommended reads for today (8/28/14).

  1. The Sydney Morning Herald reports, “Investments in new clean-energy capacity will total $USUS1.61 trillion ($1.72 trillion) through 2020 even as the expansion of renewables is expected to slow, the International Energy Agency said.”
  2. Media Matters writes: “Charles and David Koch, brothers and the oil barons who are already shaping the 2014 midterm elections according to recently leaked audio recordings, are often portrayed as environmentally responsible advocates of the free-market that are unfairly targeted by Democrats. However, their political influence, which benefits the fossil fuel industry and their own bottom line, is unparalleled.”
  3. Reuters reports: “A U.S. State Department lawyer who played a key role in the Keystone XL pipeline review is moving on, sources said on Wednesday, the latest departure of a senior official involved with the long-delayed project. Keith Benes helped produce the government’s two environmental impact reviews on Keystone, which concluded that the 1,200-mile (1,900-km) pipeline might encourage Canadian oil sands development, but would not meaningfully worsen global climate change.”
  4. A new report by Oil Change International “outlines billions of dollars of annual subsidies from the seven richest countries in the world to expand fossil fuel reserves, despite repeated commitments from those same countries to phase them out.”
  5. Climate Progress reports, “Existing power plants across the globe will emit over 300 billion tons of carbon dioxide into the atmosphere before they retire, according to a new study published Tuesday.”

Sen. Lamar Alexander: Taxpayer-Funded Corporate Welfare Bad, Except When It’s For Fossil Fuels

August 27th, 2014

See below for the latest example of Sen. Lamar Alexander’s relentless push for continued, even increased, taxpayer-funded corporate welfare to the fossil fuel industry.

Sen. Lamar Alexander (R-Tenn.) called on the administration to expand oil and gas drilling in the Outer Continental Shelf.

“There is no reason we shouldn’t be using all the resources we have available to increase our energy security, create more jobs at home and reduce our reliance on oil from countries that want to do us harm,” Alexander said Tuesday.

He made the comments after he and 20 other Republicans sent a letter to Interior Secretary Sally Jewell. Senate Energy and Natural Resources Committee Chairwoman Lisa Murkowski (R-Alaska) led the letter. The lawmakers asked that the department make all offshore oil and gas resources in the Outer Continental Shelf available for development.

Now, contrast that with Alexander’s opposition to popular, effective pro-wind policies, which he calls a…yes, you guessed it, “wasteful taxpayer subsidy.” Even more internally inconsistent and illogical, Sen. Alexander claims that we shouldn’t be subsidizing a “mature technology,” which he argues “should stand on its own in the marketplace.”  Yet here he is again, pushing to do exactly that: subsidize one of the most mature technologies known to man — drilling holes in the ground and pumping out oil, something we’ve been doing for well over a century now, and something that certainly doesn’t require government tilting the playing field in its favor at this point.