Keystone pipeline, now a political football, won't determine oil sands endgame

In the face of fierce protests, the Obama administration recently delayed the decision on whether to approve the Keystone XL pipeline, which would carry oil made from Canada's oil sands in Alberta to refineries on the US Gulf Coast.

Score one for environmentalists. They got a temporary reprieve – at least, they thought they did – until after the 2012 presidential election, when the White House would make a decision. But the Keystone pipeline is now caught in the middle of a political free-for-all over taxes: House Republicans on Tuesday passed a bill to extend the payroll tax cut (which Democrats want) with a measure that would force the White House to make a quick decision on the pipeline (which Democrats don't want).

Scrape away all the political gamesmanship, however, and the question over the pipeline becomes very simple: Would stopping it slow the development of Canada's oil sands. Those who oppose the pipeline believe it will, but they're aiming at the wrong target. If they really want to help the climate and reduce greenhouse-gas emissions, they should be fighting oil demand, not oil supply.

Consider one of their major arguments: The pipeline would cross the important Ogallala Aquifer, and because pipelines sometimes leak there would be a significant risk of contaminating Midwestern water supplies. But numerous pipelines already crisscross the aquifer, and have transported oil across the region for decades. More importantly, farmers deposit thousands of tons of herbicides, pesticides, and fertilizers on top of the aquifer every year. If runoff from the cities built on top of the aquifer has not contaminated it, there is no reason to believe a leak in a pipeline would.

The protesters' real aim, of course, is to force Canada to stop developing the Athabasca oil sands, whose extraction creates more carbon dioxide emissions than conventional oil production does. Keystone opponent and NASA scientist Jim Hansen has called the pipeline the “fuse to the biggest carbon bomb on the planet” and that if it is built it is “game over” for the climate.

That's a stark message. It's also misleading. To begin with, the “biggest carbon bomb on the planet” is the Asia Pacific region, which already produces more carbon dioxide emissions than Europe and North America combined. Further, emissions in the latter two have actually declined over the past decade even as they've skyrocketed in Asia Pacific by more than 75 percent.

To be clear, I am not suggesting that since Asia emits a lot of carbon dioxide, it is OK for the West to emit a little more. But if pipeline opponents are going to use scare language, it needs to be on target.

This mistargeting, I believe, is the greatest weakness in the opponents' argument. The reality is that stopping this pipeline is unlikely to slow down oil sands development. That oil will simply flow elsewhere.

It's not unlike America's long and ultimately unsuccessful war on drugs. By focusing on supply, the US has made illegal drugs far more expensive but hasn't stemmed demand. So is it with the world's addiction with oil.

If the US doesn't buy Canada's oil sands production, China, which has been buying oil sands firms, will. Canada's production from the oil sands has grown steadily over the past few decades with no signs of slowing. It projects that current production, at more than 1.5 million barrels per day, will double by 2020 and triple by 2030. None of this growth is contingent upon the US approving this pipeline. And the US will simply continue to source the same sort of oil from elsewhere – such as Venezuela’s oil sands.

Does this mean that it really is "game over" for the climate? Hardly. If we successfully address the demand side, encouraging the development of alternative energy while simultaneously pursuing policies that reduce oil use, the development of the oil sands will slow, and we will have a pipeline that is never needed for anything other than as an insurance policy – or to displace other unstable suppliers.

In the meantime, we will have a multibillion dollar investment in the US by a private company that will have created jobs – even if many are temporary – that are sorely needed.

– Robert Rapier is the author of the R-Squared Energy Column for Consumer Energy Report.