By Andy Rowell
On Jan. 30 the Republican Sen. John Hoeven (R-ND) will try to introduce legislation seeking to bypass President Obama and empower Congress to approve the highly controversial Keystone XL pipeline.
Sen. Hoeven’s bill, that would seek to take control of the Keystone decision, looks like a political non-starter. To become law it would have to be approved by the Democratic-controlled Senate.
And for some crazy reason, if this does happen, the president himself would still have to approve it.
But still Hoeven is pushing ahead. “We’ve been working with (the Republican) leadership in the Senate and all our colleagues, and we believe Sen. Hoeven’s bill has support from a lot of people in the Senate,” said Ryan Bernstein, an energy advisor to Hoeven.
One of the main reasons the pipeline is rapidly becoming a key election issue is over jobs. The oil industry and its friends in the GOP maintain that the pipeline is a huge job creator, but the pipeline’s critics have always maintained that those figures are highly inflated and misleading.
And now Greenpeace has upped the game in this department and written to the Chairman of the U.S. Securities and Exchange Commission (SEC) alleging that TransCanada “is using false or misleading statements about the proposed Keystone XL pipeline project," especially in relation to the numbers of jobs the pipeline would create.
The letter argues that TransCanada has “has consistently used public statements and information it knows are false in a concerted effort to secure permitting approval of Keystone XL from the U.S. government. In the process, it has misled investors, U.S. and Canadian officials, the media, and the public at large in order to bolster its balance sheets and share price.”
Greenpeace is arguing that TransCanada’s statements violate U.S. securities disclosure laws. The environmental group maintains that TransCanada has asserted that each mile of the pipeline constructed in the U.S. would create American jobs at a rate that is 67 times higher than job creation totals given by the company to Canadian officials for the Canadian portion of the pipeline.
“These false and misleading job creation numbers are part of TransCanada’s lobbying and public relations campaign designed to create congressional pressure on the U.S. government to issue a Presidential Permit approving construction of Keystone XL," argues Greenpeace, which has asked the SEC to make TransCanada correct its figures.
At the heart of the jobs propaganda is a report commissioned by TransCanada from economist Ray Perryman, entitled The Impact of Developing the Keystone XL Pipeline Project on Business Activity in the U.S. Based on Perryman’s report, TransCanada has claimed that the pipeline would create more than 20,000 high-wage manufacturing jobs and construction jobs in 2011-2012 and more than 118,000 “spin-off” jobs.
But Greenpeace argues these “claims are false and in conflict” with TransCanada’s own filings to Canadian and U.S. regulators, and is exaggerated by possibly more than 350 percent.
The Greenpeace letter concludes that it is “clear that TransCanada has consistently used public statements and information it knows are false in a concerted effort to secure permitting approval of KXL from the U.S. government. In the process, it has misled a large number of people—investors, U.S. and Canadian officials, state officials, the media, and the public at large—in order to bolster its balance sheets and share price. This is a direct violation of SEC public disclosure regulations and must be addressed.”
Greenpeace and many others will be watching closely to see how the SEC responds.
For more information, click here.
As the news broke on the afternoon of Jan. 18 that the U.S. government had denied the application of the proposed Keystone XL pipeline, speculation quickly followed about the future of the proposed Northern Gateway pipeline—a controversial and risky project that would see oilsands crude piped to the craggy northwest coast of British Columbia, then shipped by tanker to overseas markets.
The speculation was no-doubt driven by Prime Minister Stephen Harper’s response to the decision, in which he reiterated Canada’s intentions to find new customers for oilsands outside the U.S. (Harper had, until recently, called the approval of the Keystone XL pipeline a ‘complete no-brainer’ and his government has become a vocal proponent of the Northern Gateway project as well.)
As the pipeline debate on this side of the border shifts to the fate of the Northern Gateway proposal, the U.S. government’s rejection of the Keystone project shows that Canada faces real barriers in getting oilsands to market—and, despite what some pundits say, those barriers are not just political.
Not just an issue of access
Access to markets isn’t the only challenge facing the oilsands. Access to investment capital is a critical component to an industry with incredibly high start-up costs. Imperial Oil’s Kearl Mine is a case in point, with the total budget now ballooning to a record $28.5 billion.
In a 2010 report by the Fraser Institute on barriers to energy development in North America, the authors concluded that uncertainty around environmental regulations is very likely to cause some investors to be cautious about investing in the oilsands.
Businesses thrive when they have a predictable regulatory environment, and the oilsands industry is no different. The heads of companies need to know, for example, what royalties will need to be paid, what labour laws they must consider, and what accounting standards they will be required to follow.
The problem for the oilsands industry is there are many environmental aspects of operations that do not yet have clear regulations, such as tailings management, greenhouse gas emissions, reclamation, species at risk, wetlands and regional planning. This lack of regulation, and the resultant environmental challenges, is the driving factor behind the poor reputation Canada has internationally when it comes to energy development. Meantime, federal-provincial jurisdictional battles add to the lack of clarity.
Rather than constantly playing defense, Canada could proactively address our customers’ concerns about the impacts of oilsands development by improving how environmental issues are regulated. If the federal and Alberta governments could provide more certainty about their expectations of how the oilsands are to be managed environmentally—and ensure those standards are being met—then the oilsands may start to look like a more attractive investment, and a more attractive product.
The Harper government’s efforts to wield the threat of shipping to Asia as a political club against the U.S. is not new—although, following the Jan. 18 surprise decision, the Premier of Alberta also played up the prospects of taking oilsands elsewhere. A steady increase in Chinese demand for oilsands crude in the future is taken as a given among energy circles in Calgary, and to question otherwise is to challenge orthodoxy.
Playing China as an economic trump card appears rather presumptuous, however, given increasing concern that the oilsands are losing fashion in China. And it’s likely the current challenges facing the development of oilsands pipelines are not increasing optimism among potential customers in Beijing.
Compared to what we have to offer in Canada, China has access to higher-quality hydrocarbons from much closer sources. Even the chief energy researcher for a state-owned Chinese oil company agrees—“The oil sands are too costly and too polluting. Gas has a brighter future…Shale gas is much cheaper and cleaner.”
What’s the rush?
The denial of Keystone XL "only will embolden those opposed to Gateway and other new project developments," said Enbridge CEO Pat Daniels. Despite the long faces from some proponents of oilsands pipelines, there’s no rush to push these projects ahead. Alberta will not be landlocked in bitumen for at least another eight years, given industry production forecasts and current pipeline capacity. Moreover, some of the existing pipelines can be twinned or additional pump stations built to increase throughput.
From a capacity perspective, the argument for Gateway in a world without Keystone XL is weak.
Economic arguments in perspective
It is hard to miss the drumbeat of the economists in favour of Gateway these days, most of whom cite the benefits of diversifying export markets. Indeed, many Canadian and foreign-owned oilsands companies stand to benefit from the project.
But while economic diversification on its own is a sound and prudent economic principle, it is critical to consider the broader picture.
The Obama administration considered more than simply the economic aspects of the Keystone XL pipeline. They also listened to and considered the perspectives of a host of Americans that had real concerns about the pipeline and the oil that it would be shipping.
In the same way, the Harper government would be wise to learn from Keystone XL and consider multiple perspectives, including those labeled as ‘radical’. First Nations, British Columbians and environmental organizations are not radical for wanting to have a balanced and credible review process that is informed by more than the private economic interests of a handful of oil companies.
Due public process is critical to making an informed decision. For one thing, the process for Keystone XL showed that energy companies are capable of responding to public concerns and adjusting their plans when required to by a government that takes those concerns seriously.
The Obama administration’s decision to reject the Keystone XL application ought to be a clarion call for the Canadian government to ensure due process is respected for the Gateway hearings. Only by thoroughly examining the risks, along with the benefits, of the proposed Gateway pipeline can the government arrive at a decision that will be in the interest of Canadians.
For more information, click here.
EcoWatch Daily Newsletter
By Erik Hoffner
Reprinted with permission from Grist.org
Tom Weis, the “renewable rider,” biked the 2,150 miles of the U.S. portion of the proposed Keystone XL pipeline route over two months late this fall, from the U.S./Canada border to Port Arthur, Texas. He steered his “rocket trike” through many small towns along the way, raising awareness, talking to reporters, and recording scores of interviews with a wide variety of people. He’s just returned to his home in Colorado with a good sense of the prevailing opinions of the project in America’s rural West.
Q. Why didn’t you celebrate Obama’s delay of the Keystone XL pipeline back in the fall?
A. I saw nothing to celebrate. Delay doesn’t equal victory. It was disturbing to see environmental leaders, many of whom I consider friends, praising President Obama for his “leadership” and “courage” for what was in fact an act of political cowardice on his part. Kicking the Keystone XL can down the road until after the election was a transparent political ploy to appease his environmental base by throwing them a bone. Since when do we start giving presidents a pass on making tough decisions until after election day? I share Paul Hawken’s view that it is “dangerous” to allow a decision with such huge planetary ramifications to be delayed until political pressure no longer has any sway.
The pipeline fighters I met on the front lines of the Keystone XL Tour of Resistance certainly weren’t celebrating. It was like having the rug pulled out from under you. Just as the pressure was starting to build on the Obama campaign, all the air was let out of the room. This prompted me to write an op-ed for the Huffington Post, Now is the Time to Fight the Keystone Pipeline. Those with the most to lose—the farmers, ranchers, rural families, tribal communities, and fence-line communities living along the proposed pipeline route—will celebrate when this project is actually stopped.
Q. But isn’t TransCanada losing a ton of money from the delay? Doesn’t that doom the project?
A. Sure, they’re losing money, but that won’t stop them. When you have pockets as deep as TransCanada’s, you hire teams of people to create contingency plans for every possible scenario. But don’t just take it from me. Even as President Obama announced the delay, CNNMoney reported TransCanada’s CEO remained confident Keystone XL would ultimately be approved.
Q. What about this new directive from Congress for a 60-day consideration of the pipeline?
A. Aside from the crass political motivations behind it, I actually view the 60-day Keystone XL provision [requiring a presidential decision by Feb. 21] as an opportunity. The Republicans accomplished what the rest of us could not—They forced President Obama to take a stand. We’ll soon see if the president’s original rationale for a 12- to 18-month delay was truthful.
Subsequent statements by the White House and U.S. State Department certainly seem to point to Obama rejecting the pipeline and pinning the blame on Republicans for rushing the review process. But it would be foolish to underestimate the political influence of the oil lobby. Shortly after New Year's, American Petroleum Institute President Jack Gerard threatened political retribution if Obama does not deliver them Keystone XL.
Those are fightin’ words. But they also give the president a chance to begin driving the narrative of the 2012 election by differentiating himself from Big Oil and their old-world economic views. Little would do more to reinvigorate his presidency than saying “no” to Keystone XL and “yes” to a U.S.-led green industrial revolution and the millions of good-paying jobs it will create. Did you know the green economy has already generated 2.7 million jobs in the U.S., more than everyone employed in the entire fossil-fuel sector?
I’m not a Democrat, or a Republican, but it doesn’t take much imagination to see Obama turning the tables on the oil lobby and his Republican opponent for backing this un-American pipeline scheme. He can start by using his upcoming State of the Union address to spell out to the American people why this foreign energy project violates our national interest, and our values. The preponderance of hard evidence shows this export pipeline may destroy more jobs than it creates, will raise fuel prices, and won’t make America more secure. Keystone XL is a dangerous threat to Americans, and our economy, and is the exact wrong direction for our country.
Q. Can you share one peak experience from your trek?
A. I was totally blown away by the solidarity march and rally we had courtesy of the Lakota Nation. I have never felt so warmly embraced by a community in my life. Rolling into downtown Pine Ridge, S.D., on my rocket trike, I was greeted by dozens of Oglala Sioux tribal members who had taken over the streets. It was a beautiful sight to behold … grandmothers holding banners, a youth drum group singing honor songs, men waving flags, and camo-clad youth providing security. It was an incredibly powerful experience. The horseback solidarity rides with indigenous leaders in Montana and South Dakota were also unforgettable. The Native wisdom of these people fills me with hope.
Q. You taped a lot of interviews on the road. Have a favorite one to share?
A. There were so many profound interviews, it’s hard to pick a favorite, but I was deeply touched by the words of Goldman Environmental Prize winner Hilton Kelley, who spilled his heart out into a poem called “My Toxic Reality.”
Q. Can you generalize about the views on the pipeline of people you’ve met?
A. The more people hear about Keystone XL, the less they like it. Most people I met during the six-state ride knew very little about it, other than the jobs and energy security propaganda they had heard from TransCanada. What struck me the most was how quickly people would turn against it after hearing just a few facts.
Of course, the landowners I met who would be most directly impacted had an almost uniformly negative opinion of the pipeline. Many had been on the receiving end of TransCanada’s bullying tactics and were very angry at how they had been mistreated by this foreign corporation. “Disrespect” is a word I heard a lot.
I discerned no party-line affiliation whatsoever. Keystone XL is bad for America on so many levels, it transcends political party. There’s something in it for everyone to oppose. I met Tea Party activists working side-by-side with environmentalists. I saw powerful alliances of “cowboys and Indians” being formed. By assaulting so many core American values, TransCanada has succeeded in uniting people against the project. What started out as a fight against a pipeline has morphed into a struggle for the future direction of our country, and world.
Q. What happened when you reached your destination in Texas?
A. After 2,150 miles of pedaling, the ride ended with a press conference in the shadow of polluting smokestacks at a playground in Port Arthur, Texas. I was joined by local resident Hilton Kelley. I chose the West Side of Port Arthur because the air of the people living in this fence-line community would be further poisoned by emissions from refining toxic tar-sands oil. I wanted to draw attention to the plight of the babies and elderly living in this community who are already suffering enough.
Going forward, the clock is ticking on a 60-day window for President Obama to make a “national interest” determination on this foreign pipeline scheme. Every day between now and Feb. 21 is critical. The president needs to hear from voters that if he rejects Keystone XL, and rolls out a green energy plan to put America back to work leading a worldwide green industrial revolution, the American people will have his back. We can turn the Rust Belt into the “Green Belt” by building the solar panels, wind turbines, and electric cars needed to power the 21st century. It’s time for a green energy moon shot for America.
Erik Hoffner works for Orion magazine and is also a freelance photographer and writer whose recent investigative report for Yale Environment 360 on unsustainable logging in Sweden was picked up by National Geographic News Watch. See images from Sweden and links to those stories here.
An Ecuadorian appellate court upheld a historic $18 billion award Jan. 2 against Chevron for the company’s deliberate contamination of the Ecuadorian Amazon. The decision is the largest environmental award ever handed down and the result of an 18-year legal battle brought by some 30,000 indigenous peoples and farmers seeking a clean-up of contaminated sites, clean drinking water and health care.
Amazon Watch and Rainforest Action Network, which have spent years fighting on the side of the Ecuadorians in their effort to hold Chevron accountable for these egregious environmental crimes and human rights abuses, released the following statement in response to the verdict:
“For a second time, in a jurisdiction of its own choosing, Chevron was found guilty of widespread oil contamination in Ecuador’s Amazon. It is a historic triumph for the thousands of victims who have suffered for over four decades from Chevron’s drill-and-dump practices.
“Yesterday’s ruling, based in large part on Chevron’s own evidence, once again proves that the company is responsible for deliberately dumping billions of gallons of toxic waste sludge into local streams and rivers, which thousands depend on for drinking, bathing and fishing, and created a public health crisis in the rainforest region.
“Chevron has spent more than a decade and hundreds of millions of dollars in a vain attempt to evade accountability and in doing so exacerbating the suffering of thousands of rainforest residents. The company says it will continue deploying its armies of lawyers with yet more legal stonewalling tactics, still hoping that its unlimited resources can outspend and outlast the course of justice. But the guilty verdict sends a loud and clear message—It is time for Chevron to clean up the Ecuadorian Amazon."
The Ecuador decision comes at a time when Chevron also faces criminal charges and fines up to U.S. $11 billion in Brazil for its negligence in its operations. If convicted, the company will be permanently banned from doing business in the South American country.
For more information, click here.
Rainforest Action Network runs hard-hitting campaigns to break North America’s fossil fuels addiction, protect endangered forests and Indigenous rights, and stop destructive investments around the world through education, grassroots organizing, and non-violent direct action. For more information, click here.