Blocking the Keystone XL pipeline probably won’t stop the development of Canadian tar sands. Although climate change and the need to protect habitat make leaving tar sands untouched a laudable goal, unrelenting demand for petroleum in Asia means that if Canada does not send its oil southward to the United States, it is likely to send it to Asia instead. Despite this reality, the rally against the pipeline could still represent a pivotal point for America’s modern environmental movement. If nothing else, the Keystone XL showcases America’s complete lack of comprehensive energy policy. It represents a steel umbilical cord to the petroleum past and does nothing to address the future economic or environmental realities of our country. Within the coming two months, President Barack Obama will make a decision about the pipeline’s future. Regardless of his decision, the battle leading up to it has made one thing clear: the United States needs a comprehensive energy policy, and needs it now.

Perpetuating America’s Addiction

How did we reach a point where building a 1,661 mile pipeline to transport the world’s dirtiest petroleum across six (or more) US states could ever make sense? One argument is that the megaproject would enhance national security. Another is that it will ensure lower domestic prices per gallon of gasoline and diesel. Both of these arguments, however, are belied by the fact that America’s national and economic security can only lie in controlling its fuel demand, not chasing supply, whether this means finding hydrocarbons in Canada, the Middle East, Africa, or offshore US coastlines. Moreover, how do any of these pro-pipeline arguments address the nation’s long-term environmental needs? Why should America’s energy policy towards oil exist independent of recent trends in renewables, energy efficiency, and natural gas? The answer: America is addicted to oil.

From an economic perspective, our oil addiction is problematic because oil is sold only to the highest bidder. From a policy perspective, our addiction is irrational and unsustainable. America needs to seriously begin curtailing its oil use and stop subsidizing cheap oil with poorly formulated energy policy. The quantity of oil resources consumed by Americans is staggering. With less than five percent of the world’s population, Americans consume nearly a quarter of global petroleum production – approximately 20 million barrels of oil per day. Americans expatriate $13 million per hour for foreign oil. For all of this consumption, America pays nearly $5 billion per year in oil subsidies for a resource that is not a reasonable part of our energy future. Even if the International Energy Agency anticipates that US oil demand will drop over the next 20 years, energy scenario projections still show that the US will continue forward as one of the world’s largest per capita petroleum consumers. This consumption will continue to rely on imports, and prices will continue to be set in the context of global markets.

The Canadian state of Alberta sits on 170 billion barrels of unconventional petroleum reserves, which, over the long term, will only contribute to keeping America strung-out on oil. America is entirely submissive to the international market forces governing petroleum. Rather than shielding America from the international petroleum circus, the Keystone XL would serve as a shackle to an inherently unstable system over which America has limited control. Even if new North American supplies increase global availability of oil, prices remain largely beholden by a club of producer countries like OPEC. Oil is a fungible commodity and is inherently economically unstable because petroluem exists as a financially traded asset, not a simple commodity governed by textbook principles of supply and demand. Simply increasing the flow of oil into America will not protect the nation from price shocks that originate in the Middle East or beyond.

Energy Policy as a Driver for Environmental Benefits and National Security

Curing America’s oil addiction requires formulating an energy policy that begins to obviate oil consumption. Today’s perception of the energy landscape is one where oil is too insecure, natural gas is too expensive, nuclear is too dangerous, renewables are too insufficient, and coal is too dirty. Achieving long-term environmental benefits and realizing true energy security will require policy that is designed to decrease oil use until the nation is totally “clean,” not a policy that merely perpetuates our  addiction by buying cheaper oil from a friendlier dealer.

Although it is phenomenally difficult to envision a life without oil, the reasons for planning beyond oil are numerous. Perhaps the most obvious issue with oil, let alone dirty tar sand-derived crude, is related to greenhouse gas (GHG) emission contributions. Wells to wheel analysis shows that the GHG impacts of driving are approximately 15% higher when the actual production of oil is taken into account. Then there is the concern of environmental degradation that oil pipelines physically represent. Since 1991, there have been over 2 million barrels of oil split on the US mainland, triggering over $5 billion dollars of remediation. These figures capture the often irreparable ecological damage these spills cause and are exclusive of the risks associated with off-shore drilling, as exhibited by the Deepwater Horizon tragedy.

From an energy security perspective, the Keystone XL is much less attractive than curbing gasoline consumption via existing technologies, or better yet, creating the “Post-Oil City,” a project championed in Germany, which intends to combine urban design concepts with electric public and private transportation systems to eliminate petroleum consumption in cities. Though often misconstrued by the media, post-oil viewpoints are hardly those of “hippie” or politically soft environmentalists. The Center for Naval Analysis, which boasts 13 retired senior US military officials, released a report concluding that while North American production of oil is somewhat advantageous for America’s petroleum security, US oil consumption is the “significant security threat.” Furthermore the paper called for immediate steps toward a 30% reduction in US demand. In this vein, the US military has taken the lead in reducing our crude consumption. How can we ask our soldiers abroad to use less diesel fuel while simultaneously taking virtually no bold steps to reduce domestic consumption?

Oil is a fungible commodity, meaning that units produced in different parts of the world are interchangeable. Particularly given OPEC’s ability to control global supply, this fact undermines the argument that the Keystone XL pipeline would lower U.S. gas prices or improve U.S. security. OPEC and other special interests across the globe ultimately control how much oil martini we get for our buck. (Illustration by Alisa May)

There is No Easy Answer, but Oil is Not an Option

Although oil is predominantly used domestically as a transport fuel, mitigating its importance in US energy policy will require clearing up the huge misconception about renewable energy and oil use, and realizing the collective importance of energy efficiency, hybrid vehicles, electric vehicles, and most importantly, the natural gas needed to create electricity.

However convoluted in the popular media, oil and renewable energy are largely two separate issues. Only 5% of the nation’s electricity is produced by using oil as a fuel source. Replacing oil with electricity is a tall order. Wind and solar power do not power vehicles and because of their intermittency, their role in the overall energy system, while important, remains limited. Ramping-up renewable energy use has virtually no impact on domestic oil consumption unless policy embeds renewables into broader, sweeping elements of energy planning. The following is an explanation of the opportunities and constraints post-oil energy planning faces:

  • Residential Energy Efficiency – Compact fluorescent light bulbs, home insulation, and other measures are a vital “first-response” for controlling energy demand, especially in residential buildings reliant on fuel oil as an energy source. The most immediately deployable energy asset outside direct efficiency is low-grade steam, which is incredibly effective at reducing fossil fuel consumption and can lower CO2 emissions in the United States more than solar and wind power combined. Additionally, by implementing advanced industrial design, especially combined heat & power (CHP), facilities can achieve efficiencies great than 50%, a far cry from America’s atypical power plant efficiency of 35%. Currently CHP facilities comprise only 9% of the current US electric generating capacity. U.S. EPA and Department of Energy reports suggest energy recycling could provide almost 40% of our electric needs while saving over $100 billion in fuel costs.
  • Electric Vehicles – Arguing strictly against the environmental impacts of pipelines would essentially kill the mass use of electric vehicles in the US. Most of the nation’s non-nuclear power plants are not built to run 24 hours per day. Because most electric vehicles would be plugged in at night, and because the nuclear renaissance unfortunately appears dead post-Fukushima, modern power plants will be needed to stabilize the electricity system. Coal is not the energy source of the future and renewables are simply insufficient, regardless of recent innovation. This leaves natural gas, which although not perfect, is the cleanest and most abundant domestic fossil fuel source. For this reason, and despite the issues surrounding hydraulic fracturing, it is far more likely than not that natural gas extraction will continue to increase. This means that more natural gas pipelines will be needed throughout the country in order to feed both natural gas-fired power plants and resource end users. If environmentalists are set on opposing pipelines, then they are de facto opposing the proliferation of electric vehicles.
  • Hybrid Vehicles/Plug-in Hybrid Vehicles – Even if factories started producing only hybrids this very minute, it would take about 20 years for all of the current vehicles to run their course and be replaced by hybrids. Even then, one-third of US transportation fuel is consumed in heavy trucks. Here too, natural gas might play a role, as heavy trucks can run on liquefied or compressed natural gas or like-gas derivatives. This not only reduces reliance on petroleum, but would greatly improve air quality in urban areas.

Conclusion: Overdosing on Oil

Another century of underpriced oil will only sap America’s innovative spirit. Assuredly, removing oil subsidies and including even a modicum of oil’s security and environmental externalities in its price would stimulate mass deployment of alternatives. Short of this, though, it is the responsibility of the environmental movement to proactively move the nation towards a smarter, cleaner energy future. Comprehensive energy policy is an urgent priority. Keystone XL represents a direct calling to this responsibility. Failing to respond to the challenge with a practical energy perspective will only further distort America’s energy free market and inhibit environmental progress. All for the sake of oil.

The time is now to face our addiction.

 

Author Biographies:

Brian Marrs is a graduate student at the Yale School of Forestry and Environmental Studies. He worked as an energy economics specialist before serving as a Robert Bosch Foundation Fellow at the German Energy Agency and Vattenfall Europe, the fourth-largest power provider in the European Union. Brian is also a Fellow of the Swedish Institute for Nordic Energy Studies, and a McCloy Fellow in Environmental Policy with the American Council on Germany. He was a 2011 finalist in the Shell Energy for Tomorrow competition and is a contributing author to the textbook Sustainability from the Transatlantic Perspective.

Joseph Edgar is a joint degree student at the Yale School of Forestry and Environmental Studies and Pace Law School. Joseph serves as an Energy Consultant for the Pataki-Cahill Group in New York City and is also the Program Director for the Brazil-American Institute for Law and Environment (BAILE). He holds a B.A. from Northeastern University.

Artist Biography:

Alisa May is a Los Angeles artist who earned a Bachelor’s Degree in Architecture prior to becoming a graduate student at the Yale School of Forestry and Environmental Studies. She draws upon the diverse disciplines of art, architecture, and sustainability to design building projects in Haiti, Rwanda, and the US and also to create artwork related to humanitarian and ecological issues.

 

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