Did Obama’s Decision to Nix the Keystone XL Pipeline Help Save the World?

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Suddenly ecstatic environmentalists are in need of a new sign. Photo: ANDREW CABALLERO-REYNOLDS

Following a seven-year stint in political and regulatory purgatory, the Keystone XL project finally met its end last week when President Obama, eyeing the upcoming U.N. climate talks in Paris, formally rejected TransCanada’s request to build the cross-border oil pipeline. Climate activists who opposed the plan are celebrating their victory and already attempting to parlay the momentum into more wins. Proponents of the pipeline — a group that at this point consists mainly of Republicans and Republican presidential candidates, energy-industry lobbyists, and some labor unions who were looking forward to tens of thousands of temporary construction jobs — are decrying Obama’s decision and writing the whole thing off as a hallmark of irresponsible political capitulation.

Obama has never been much of a fan of how this all played out either. He couldn’t resist denigrating the controversy over the pipeline even as he was rejecting it on Friday, lamenting the debate’s “overinflated role in the political discourse” and how Keystone XL “became a symbol too often used as a campaign cudgel by both parties rather than a serious policy matter.” Obama’s logic for walking away from the pipeline, as he explained it last week, was because, more generally, it didn’t provide much in the way of long-term economic or energy benefits — or at least not enough to offset the doubt that endorsing the pipeline would have cast on America’s commitment to fighting climate change. 

Key questions in the wake of the decision include what the Keystone fight has meant, and potentially will mean, for American environmentalism, as well as how it will come to define Obama’s legacy on climate change. The New Republic’s Rebecca Leber declares that Obama has bolstered “his weakest spot” on climate change by at last focusing on supply-side carbon, rather than just carbon emissions:

Obama’s decision to deny the pipeline its permit is his most significant, if symbolic, move to limit the growth of the world’s fossil fuel supply. His other climate initiatives have targeted how we consume fossil fuels, but he’s rarely intervened in the industry’s plans to extract and burn coal, oil, and gas in the first place. The Keystone refusal is the kind of declarative statement environmentalists have long wanted from a world leader, with Obama delivering a message that it’s finally time to keep fossil fuels in the ground.

As Time’s Justin Worland explains, the “keep it in the ground” rationale and rhetoric has already been well adopted by environmentalists, who now hope to convince Obama to use his executive authority to block permits for any new fossil-fuel extraction on federal land. Obama, who throughout his tenure has supported an “all of the above” energy strategy, explicitly embraced this philosophy in his announcement last week, saying, “We’re going to have to keep some fossil fuels in the ground.”

Canada's scenic tar sands. Photo: Ian Willms/2015 Getty Images

Looking at the politics, the Washington Post’s Philip Bump argues that rejecting KXL will cost Obama very little compared to the benefit to his environmental legacy and the overall fight against global warming:

There’s a wide seam of partisanship that runs through climate change as a political topic, which is readily apparent in polling on the subject. Republicans aren’t going to dislike Obama more after this decision, which most people saw coming anyway. But he gets to define himself and his party on a subject that could become enormously important over the coming decades.

While rejecting Keystone XL doesn’t solve the problem of climate change – and while Transcanada could try again with the next president – approving it wouldn’t have necessarily doomed the planet, either. The formal decision to reject the pipeline is best seen as political in the broadest sense: A statement from the president of the United States that climate change is a serious factor in its decision-making process. Since the issue of climate change became a critical one, it’s a statement that has nearly been unheard in Washington. And Barack Obama would appreciate if you remembered who said it.

But writing for The Week, conservative columnist Matt K. Lewis thinks Obama just defaulted to “political charade” when he could have delivered a centrist, bipartisan victory:

I’m not the sort of partisan who’s spent the last several years agitated about Keystone, as many on both the left and right have. I’ve always felt that this is just one project; it wouldn’t be an enormous job creator, but nor would it be a huge climate killer. Nixing Keystone won’t matter much to the environment, and might even be a net negative. And if you’re really worked up about climate change, why focus on Keystone? The ultimate game is to get an international agreement (there are talks scheduled in Paris) that would address checks on reducing China’s emissions.

But the real Keystone issue, of course, is about the political symbolism. Although both sides exaggerated the potential costs and benefits of Keystone, the issue ultimately serves as a microcosm of President Obama’s entire presidency, which has been plagued by increased polarization, acrimony, and gridlock. Given the choice to be a uniter who transcended partisanship, or a partisan who bowed to liberal special interests, Obama — who campaigned as a change agent — has almost always chosen partisanship.

The Washington Post’s Stephen Stromberg is similarly unimpressed with both Obama and environmentalists who fought KXL:

[A] senior State Department official defended the president’s decision by arguing that Keystone XL’s rejection will show foreign governments that the United States is willing to make tough calls in order to lead on climate change. Given that the president claimed only minutes earlier that the pipeline would have been irrelevant to the U.S. economy, this defense is hollow.

He goes on to point out how the pipeline was more than just the “campaign cudgel” Obama referred to it as:

Keystone XL was an irrational and insulting litmus test for seriousness about climate change. It made the environmental movement look capricious and immature. It alienated some of those who should be natural allies in the fight against global warming. The stunning lack of substance behind the anti-Keystone XL movement should have offended those who care about the real, formidable task of transitioning the economy onto low- and no-emissions technology, which requires a widespread reduction in demand for dirty fuels. Anti-Keystone XL activists have misapplied their energy; the danger is that they will continue to do so.

Obama is right that the pipeline’s significance has been “over-inflated,” and that it shouldn’t have been considered an issue of major national importance. Which shows that he was wrong to bow to the herd demanding its rejection.

Meanwhile, The Weekly Standard’s Ethan Epstein points to economics, not politics, as the main reason Keystone XL has faded from political importance:

Tar sands oil is remarkably expensive to cultivate; according to State Department figures, energy companies require oil prices of somewhere between $65 and $75 a barrel to break even on tar sands mining. Oil is currently trading at less than $50 a barrel and there’s increasing speculation that the stuff will remain cheap for a long time to come. The plunge in oil prices is already affecting tar sands production: Earlier this year, Shell cancelled plans for a major investment in the tar sands.  Nor are they the only ones calling off future development. The plunge in oil prices and fall-off in investment means that Keystone simply no longer makes economic sense.

Or as Reason’s Ronald Bailey quips, “If oil prices rise later in this decade, another president will find that constructing the pipeline is a shovel-ready project in the national interest.” 

Winning weird. Photo: Matt McClain/The Washington Post

Additionally, Slate’s Daniel Gross highlights how the “quiet revolution going on in American transportation” as well as the “changing shape of future demand” combined for a final blow against Keystone XL

As they race to meet tough new mileage standards (thanks, Obama!), automotive engineers are experimenting with new materials like aluminum, introducing features like stop-start technology, and generally getting smarter about efficiency. The upshot: The typical car sold in the U.S. this year is about 25 percent more fuel-efficient than the typical car sold in 2007, according to data compiled by Michael Sivak and Brandon Schoettle at the University of Michigan Transportation Research Institute. This trend is likely to continue.

Meanwhile, oil is slowly being displaced as a transportation fuel by natural gas—not in cars, but in trucks and buses. Each day, the website of trade publication NGTNEWs has news of giant corporate delivery fleets, refuse-collection fleets, and municipal bus systems putting hundreds of vehicles into service that will never use a gallon of gasoline. And let us not forget that each month, about 10,000 cars are sold that run entirely or partially on electricity.

One of the major criticisms of blocking Keystone XL is that the tar sands oil will likely still be extracted and burned anyway, and that alternative methods for transporting that oil — including rail — are already in place. Christopher Helman, who writes about the energy industry for Forbes, points out that oil companies have reason to yawn at last week’s news:

The industry has already moved on. Years ago. The anti-carbon crowd was so obsessed with Keystone XL that they hardly noticed as Enbridge , a big competitor of TransCanada , doubled its lines bringing Canadian oil to the U.S.— to 800,000 barrels per day. They didn’t need to get White House approval because their lines didn’t cross an international border. … And within the U.S. railroads have ramped up their hauling of crude oil. Back in 2010 virtually no oil moved by rail in the United States. Now railroads move about a million barrels of it per day. Rail is not as safe a method of moving oil as pipelines are, but who cares about safety when there are symbolic victories to be had?

An energy consultant similarly told the New York Times last week that “for Gulf refineries [the rejection of the pipeline] is not a huge deal,” and according to the Times’ calculations, “[e]ven without the Keystone XL, total American imports of Canadian crude — from oil sands as well as more conventional varieties — have increased to 3.8 million barrels a day from 2.5 million barrels a day since 2008.”

But Grist’s Ben Adler, who has written one of the definitive histories of the anti-KXL movement, insists that regardless of any other factor, what’s important is how the KXL campaign transformed American environmentalism for the better, sharpening activists’ focus, diversifying their ranks, and forcing them to become more assertive and better trained, and that these improvements have absolutely expanded environmentalists’ political and media powers at a crucial time:

Liberal wonks at think tanks and magazines have been critical of the anti-Keystone fight, arguing that activists picked the wrong target and should have focused their energies elsewhere. But anti-KXL activists dismiss this criticism, which comes from people who have never run an activist campaign. While it is true that stopping Keystone won’t have as big of a direct impact on greenhouse gas emissions as, say, Obama’s Clean Power Plan, that doesn’t mean a campaign focused around power plant emissions would have been more successful. Organizing and movement building is at least as much about getting people engaged and involved as it is about stopping or starting any individual new project. The fight against Keystone — which was straightforward and easy to understand — engaged a lot of new people and helped build up a real climate movement. That movement can now channel activist energy into supporting Obama’s power plant rules, pushing for a good climate deal in Paris, stopping fossil fuel extraction on public lands, and more– but that activist energy would not have existed without the KXL fight in the first place.

In a similar vein, Vox’s David Roberts, who acknowledges the anti-KXL movement’s many shortcomings, nonetheless appreciates what they’ve accomplished

Climate change is inherently difficult to organize around; it’s big, abstract, and incremental. By the same token, broad, economy-wide policies to address it are also big, abstract, and incremental.

… This helps explain why climate activism has primarily manifested as “Blockadia” — blocking and shutting down bad projects is easier to organize around than efficiency or carbon pricing.

Like Adler, he agrees that stopping something like KXL won’t do much of anything to combat climate change, but he nonetheless savors any victory over Big Oil:

[The fossil fuel] industry as a whole is a high-functioning, high-earning, high-influence death machine that is driving civilization toward disaster, knowingly so. Some sand has got to be thrown in the fucking gears.

That’s what the Keystone campaign was, what all supply-side campaigns are: sand in the gears. The question is not what effect this particular pipeline loss will have on this particular fossil fuel source. The question is, what effect will it have on fossil fuel investors to realize that any new supply-side proposal risks being met with a loud and furious grassroots movement that has hundreds of thousands of people on its mailing lists and a few high-profile victories under its belt?

What effect will it have on the economy, and on society, when fossil fuel companies lose their social license?

Indeed, Bill McKibben, one of the central leaders of the anti-KXL fight, writes in The New Yorker that he now believes he and his allies, because of their new tactics, finally have fossil-fuel companies on the defensive:

[T]he Keystone rallying cry [has] quickly spread to protests against other fossil-fuel projects. One industry executive summed it up nicely this spring, when he told a conference of his peers that they had to figure out how to stop the “Keystone-ization” of all their plans. … [And] this fall, the governor of the Bank of England, Mark Carney, speaking to members of the insurance industry at Lloyds of London, used [“leave it in the ground“] language to tell them that they faced a “huge risk” from “unburnable carbon” that would become “stranded assets.” No one’s argued with the math, and that math indicates that the business plans of the fossil-fuel giants are no longer sane. Word is spreading: portfolios and endowments worth a total of $2.6 trillion in assets have begun to divest from fossil fuels. The smart money is heading elsewhere.

He looks ahead, hoping for a turning point:

We won’t close that gap between politics and physics at the global climate talks next month in Paris. […] In many ways, the developments of the past two days are more important than any pledges and promises for the future, because they show the ways in which political and economic power has already started to shift. If we can accelerate that shift, we have a chance. It’s impossible, in the hottest year that humans have ever measured, to feel optimistic. But it’s also impossible to miss the real shift in this battle.

What Obama’s Decision to Kill Keystone XL Means