By Roy L Hales
Alberta’s oil industry won a symbolic victory. President Trump calls his approval of the Keystone XL pipeline “a great day for jobs and energy independence” in the United States. Canada’s National Energy Board (NEB) admits the industry is not using its’ current pipeline capacity1 and adding more pipelines is “not consistent with the Paris Accord’s commitment to keep (Global) warming to two degrees Celsius, or its aspirational goal of limiting it to 1.5 degrees Celsius.”2 Approving the Keystone XL Pipeline is about our future on a planet where the scale and pace of extreme weather events is increasing.
Approving The Keystone XL Pipeline Is About Our Future
Do we really believe that increased fossil fuel usage is responsible for the increase of global temperatures?
Prime Minister Justin Trudeau says he does, but appears to be an even stronger supporter of Canada’s fossil fuel sector.
President Trump is a climate change denier, who embraces oil pipelines as “the greatest technology known to man or woman.”
“We greatly appreciate President Trump’s administration for reviewing and approving this important initiative, and we look forward to working with them as we continue to invest in and strengthen North America’s energy infrastructure,” said Russ Girling, TransCanada’s president and chief executive.
To which Patrick DeRochie of Environmental Defence responds, “Even if the pipeline could be completed, there will never be enough tar sands oil to fill it. After the approval of the Line 3 and Kinder Morgan pipelines, there is no more room under Alberta’s legislated cap on tar sands emissions for production to fill Keystone XL. Increasing production to that level would also make it next to impossible for Canada to keep its climate commitments.”
TransCanada still has significant legal opposition to overcome, in both Nebraska and South Dakota.
This Isn’t About Expanding Oil Production, Just How Fast We Expand
This conflict isn’t about expanding production in Alberta’s oil sands. The NEB projects that even without adding new infrastructure, the industry will continue “to grow at a moderate pace” until 2040.3 The question is whether the industry can ramp up production 45% (over 2014 levels), as projected in the High price scenario of the NEB report Canada’s Energy Future 2016.
The biggest potential threat to oil production is the cost. (chart to the left) Most of the world’s inexpensive sources have been tapped.
Trudeau’s administration responded by allotting the industry $3.3 billion for subsidies in Canada’s 2017 budget.
American subsidies are more complex. According to Oil Change International, “As of July 2014, Oil Change International estimates United States fossil fuel subsidies at $37.5 billion annually, including $21 billion in production and exploration subsidies. Other credible estimates of annual United States fossil fuel subsidies range from $10 billion to $52 billion annually – yet none of these include costs borne by taxpayers related to the climate, local environmental, and health impacts of the fossil fuel industry.”
Tim Pearson of Sierra Club BC recently called subsides like these “1950s thinking in response to 2017’s challenges …. Every million dollars invested in fossil fuels generates two jobs. That same million dollars would deliver 15 jobs via renewable energy projects.”
The NEB admits “Emissions from the combustion of fossil fuels, including those used for the production of energy, accounted for 81 per cent of Canadian GHG emissions in 2013.”4
Top Chart: Western Canada currently produces 3.7 million barrels per day of oil and, according to the NEB, we only use 85%-90% of our current capacity. (I used 90% for the chart above). Capacity figures (expressed in barrels per day) for the Energy East (1,100,000), Keystone XL (830,000) and Trans Mountain Expansion (590,000) taken from CBC news. Chart by Roy L Hales