The modern world, love it or hate it, requires energy and lots of it. Everything we do uses energy, from transportation, to electricity, for heating and cooling our homes, for healthcare, for agriculture and food production, for every kind of industry, for operating retail stores, and on and on and on. Energy security is vital to our continued prosperity. People in undeveloped countries die because they lack energy, because they cannot turn on life-saving equipment or even the lights in their homes, hospitals, and clinics. The poorest people in highly developed countries suffer when they cannot afford the energy to keep them safe or comfortable in their homes. Energy is the stuff of life and of human flourishing. The more expensive the energy we use, the less of it we can afford. The higher the cost of energy, the more difficult the lives of the most vulnerable people.
Yesterday, we inaugurated a new president. The new administration began with a number of executive orders signaling policy preferences for all to see. Many of these obviously reverse the actions of the previous administration which is not unusual when a different political party assumes control of the executive branch of our constitutional republic. The same thing happened four years ago and 12 years ago, and 20 years ago. The parties disagree. I just wish they would discuss and evaluate their differences before either party drives us over a cliff, or walks us off the cliff if we cannot afford to drive our cars.
Among the executive orders signed last night was the canceling of the federal permit authorizing the construction of Keystone XL pipeline. This action by the new president is illustrative and highly symbolic. If most people in the United States and Canada understood the implications and consequences of this presidential order, they would or should be incensed. The Chinese Communist Party should be dancing in their streets with euphoric glee for they will most assuredly be enriched while witnessing the further decline of their chief economic competition.
Canada will sell its oil to the highest bidder with the most consistent market. Oil moves by ship, by train, by truck, and by pipeline. Shut down the pipeline (or even just parts of that pipeline) to the U.S. and oil products continue to move but only by ship, train, and truck. One more thing to consider. What is the safest and most environmentally friendly way to transport oil? Hint, it’s not by ship, train, or truck. What is the least expensive way to transport oil over long distances? Hint, it’s not by train or truck, and ships are the only viable option over the oceans.
The Keystone XL pipeline is a multi-billion-dollar privately funded project and it already exists in certain places. Billions of dollars have been spent on it and more would have been spent in the coming months and years. Oil now flows from Hardisty, Alberta in Canada to near the Kansas and Nebraska border. Other pipeline sections under construction will take a more direct route through Montana. Reports I’ve read indicate that over a hundred miles of newer sections of the pipeline were added in the past year alone. Did you know that Canada planned to spend almost two-billion dollars on solar, wind energy as well as battery energy storage to operate the two-thousand-mile pipeline system? Without this investment alone, the same oil would be transported on trains and trucks using energy from hydrocarbon fuels. So, how would canceling the Keystone XL pipeline reduce our dependence on such fuels? How would shutting down the pipeline prevent the climate from changing?
The supply of oil is not as simple as most understand. Refineries are designed to deal with different kinds of oil, some oil is light crude while other oil is heavy crude for example. Oil from Canada is different than oil from Saudi Arabia or the middle east. Different refineries handle different types of oil supplies. In other words, reducing our supply from one source cannot always be made up from other sources without considerable expense. And how is that expense covered? By consumers of course.
When a multi-billion-dollar project is stopped before it is completed, thousands of workers are laid off. In the case of the Keystone XL pipeline, many of these are union workers belonging to Laborers International Union in North American, The International Brotherhood of Teamsters, The Operating Engineers, and the United Association of Union Plumbers and Pipefitters. Collective bargaining agreements were already negotiated with these unions and will now dictate how the workers are separated from their employment. These people are from Canada and the United States. Imagine how this will impact tens of thousands of people, their families, and even the towns where they live.
To me the most frustrating aspect of this extreme example of partisan motivated virtue signaling is the excuse used for its justification. Ending the pipeline is supposed to somehow save the planet from catastrophic climate change. This won’t have any positive effect on climate. If anything, the transportation of the oil and gas by non-pipeline means will actually add to the continued reliance of hydrocarbon fuels. So, its just foolishness, partisan foolishness of the worst kind intended to pander to people who don’t know better. We are living in crazy times.