When oil meets emotion: the Keystone conundrum

 By Darcy Henton, Calgary Herald April 15, 2013 10:17 AM

Nebraska farmer Jim Tarnick vows to fight the Keystone XL pipeline to the finish because he believes its approval will be the death of his farm.

It’s a battle Tarnick says he can’t afford to lose.

“I will carry it on to the end,” the 38-year-old farmer said Friday. “They will really have to take my land from me.”

If approved by United States President Barack Obama later this year, the Keystone XL pipeline will carry up to 830,000 barrels per day of oil-sands bitumen from Alberta and across Tarnick’s farm in central Nebraska to refineries on the U.S. Gulf Coast.

The decision is critical to Alberta, which is relying on the $5.2-billion TransCanada project to help overcome a so-called bitumen bubble that has dramatically discounted the price of oilsands crude to the point where the provincial government is projecting a $6-billion shortfall this year in resource revenues.

Although the differential between the price of bitumen and West Texas crude has narrowed since the March 7 budget, International and Intergovernmental Relations Minister Cal Dallas said in an interview this week that Keystone could generate hundreds of billions of dollars in economic activity for Canada and Alberta over its life.

“For the future of Alberta I think it is a critically important project,” Dallas said. “The development of our industry in Alberta is in no small part contingent … on making sure we have access for our products.”

But Tarnick, who raises cattle and grows corn and soybeans on 640 hectares of land 70 kilometres from Grand Island, Neb., fears the line through the sandy, corrosive alkali soil will almost certainly leak or rupture. He believes that will destroy the aquifer farmers in his state rely upon for their lives and livelihood. In his mind, it’s not a question of if the pipe leaks, but when.

Tarnick said Friday he never pictured himself as an activist but he has already been arrested for chaining himself to the White House fence. “It’s been quite an experience,” he said. “I never would have expected to be this much into it, but it is a fight I believe in.”

The next skirmish is set for Thursday when Tarnick and other state farmers affected by the line will raise their concerns at a U.S. State Department hearing in Grand Island, a town of about 50,000 residents and home to the Nebraska state fair.

Tarnick thinks the State Department, based on its preliminary report on the project, has already decided to recommend approval of the pipeline. And he rejects the contention that America needs Alberta’s oilsands bitumen and that the pipeline ensures a safe and secure supply.

“It’s crazy. It helps Canada, but it does nothing for the United States. I don’t see why I need to be a mule for Canada to pump its tarsands oil through my ground and through my water. We don’t want to take that chance – not for a product that’s not U.S.”

The clash between the economy and the environment is at the heart of much of the raging debate over Keystone on both sides of the border.

Alex Pourbaix, president of energy and oil pipelines for TransCanada Corp., told a U.S. Congress subcommittee this week the line will provide seasonal jobs for 10,000 workers, add $3.4 billion to the U.S. economy and result in $3.1 billion in American purchases and contracts.

“The Keystone XL Project is fundamentally about meeting the needs of U.S. crude oil refiners – and hence U.S. consumers – for a reliable and sustainable source of crude oil to either supplement or replace reliance on declining foreign supplies, without turning to greater reliance on Middle Eastern sources,” Pourbaix said. “There can be little dispute that this purpose enhances U.S. energy security at a critical juncture.”

He billed Keystone as the safest pipeline in the world, but critics remain unconvinced.

Jane Kleeb, a spokeswoman for the advocacy and property rights group Bold Nebraska, said her organization is not an environmental group, but got caught up in the Keystone debate when the pipeline was proposed through the state.

While construction of the pipeline could provide 2,000 to 4,000 temporary jobs for Americans, it’s still not a good deal for Nebraska and other states the pipeline crosses, she said.

“I acknowledge those are good jobs for those families, but what they are putting into the ground, what they are leaving behind for our families, is not good,” Kleeb said. “Sure, those are good jobs for two years for those families, but then our families have to live with the risk forever – and that’s not fair to us.”

The land rights and pollution concerns of Nebraska farmers are part of a much larger issue: greenhouse gases and climate change.

Opposition to the Keystone XL line has morphed into a movement to wean North America from its reliance on fossil fuels and to prevent expansion of Alberta’s oilsands, which environmental activists have branded “the world’s dirtiest oil.”

“This is an issue that has fired up the environmental movement more than any other in the past 40 years,” said Daniel Kessler of the environmental group 350.org.

He called Keystone “a fuse to one of the largest carbon bombs on the planet.”

The issue has galvanized North American environmental groups and celebrities to stop the Keystone at all costs and to date about 1,500 people, including actress Daryl Hannah, have been arrested in demonstrations against it.

“Beyond the obvious worries about spills and such, the most important thing about the pipeline is what it connects to. The tarsands are one of the planet’s largest pools of carbon; it needs to stay in the ground if we’re going to be able to do anything about climate change,” said 350.org founder Bill McKibben. “Burn it on top of everything else we’re burning and it’s game over for the planet.”

McKibben said there are other deposits of carbon around the world that pose a similar threat, but without Keystone the tarsands expansion will slow or stop.

Earlier this week, Pulitzer Prize winning author and U.S. energy consultant Daniel Yergin called the Keystone the most famous pipeline in the world, which he noted is quite an achievement since it hasn’t even been built yet.

Mark Jaccard, a Simon Fraser University professor who sat on the Intergovernmental Panel on Climate Change that won the Nobel Prize in 2007, said change has to begin somewhere and slowing development of the oilsands would be a big step.

He told a congressional committee hearing in Washington this week that expansion of the oilsands will prevent Canada from meeting its commitment to reduce carbon emissions by 17 per cent below 2005 levels by 2020.

“I really believe that our first priority, whether you care about economic development, your children, a Third World, whatever, is to try not to have global temperatures rise more than two degrees Celsius, and that’s going to be extremely difficult to meet,” he said. “The question has to be: ‘How do we collectively stop aggregate emissions from continuing to rise?’ It’s going to have to be stopping one project as part of an effort to stop a lot of projects.”

The U.S. State department concluded in its interim report that rejecting Keystone would not significantly impact oilsands production – a conclusion Jaccard vehemently countered in his congressional testimony Wednesday.

But Premier Alison Redford said repeatedly during this week’s visit the U.S. State Department is right.

“What we’re seeing is a continuing growth in the oilsands,” she told the Brookings Institution Tuesday in a speech and discussion interrupted repeatedly by environmental protesters. “If Keystone didn’t go ahead, we really wouldn’t see much of a slow down.”

The province still expects to see production triple to three million barrels per day by 2020, she said.

She rejected hysteria over the oil-sands carbon emissions saying they were seven per cent of Canada’s total emissions, and less than states like Ohio, Indiana and Iowa.

Alberta will market its oilsands bitumen in Asia or India if the United States rejects Keystone, she told her audience.

“We know the developing world is thirsty for our energy,” Redford said. “But it’s Keystone that offers the U.S. the most direct and tangible rewards. And I hope that not just Washington, but Americans across your country understand them, and recognize the precautions Alberta is taking to produce energy safely.”

The premier also pointed out that Canada supplies 30 per cent of the American oil imports and without almost two million barrels per day from the oilsands, the U.S. has no prospect of North American energy independence.

Redford has made four trips to the U.S. Capitol in the past 18 months to preach the merits of Keystone for both countries and to refute the contention that the issue comes down to either Keystone or the environment. She has also been boasting about Alberta’s efforts to combat greenhouse gases through a $15-per-tonne levy on carbon emissions in the province that funds climate change research and technology.

Industries that emit more than 100,000 tonnes of carbon a year are required to reduce their “carbon intensity” – emissions per unit of production – by 12 per cent a year or pay a $15 per tonne levy on carbon that exceeds the intensity target.

Jaccard said that compared to British Columbia, which requires industry to pay a $30 per tonne tax on all carbon emissions, Alberta’s levy works out to about $2 per tonne – a number he called “inconsequential” at the hearing.

The U.S. Congress subcommittee on energy and power is debating a bill – the Northern Route Approval Act – that would enable Congress to approve the Keystone pipeline even if Obama rejected it.

Committee chairman Ed Whitfield, a Republican from Kentucky, noted Wednesday during the hearing that the approval process has dragged on four years “and there is still no clear end in sight.”

Passage of the bill will provide 20,000 direct jobs and 100,000 indirect jobs and nearly a million barrels a day of “much-needed oil” flowing from Canada to refineries in the Midwest and Gulf Coast, Whitfield said.

“America is a nation of builders and the American people want to see Keystone XL built,” he said.

Although Whitfield is not optimistic the Democrat-dominated Senate will even consider the bill, Republican North Dakota Senator John Hoeven said in an interview this week he believes the pipeline would be approved by Congress even if it is rejected by Obama.

A non-binding vote on a pro-Keystone bill he co-sponsored in the Senate last month passed by a 2-1 margin. Environmentalists discounted the vote because it wasn’t binding, but were miffed that Democrats who pledged support for climate change voted for it.

“We weren’t happy about it,” said Kessler, of 350.org

Gary Doer, Canada’s Ambassador to the U.S., said the Senate vote was significant because the Democrat senators voted in favour of the pipeline knowing the environmental community was watching.

He noted all the governors in the states through which the pipeline is passing support the pipeline and several public opinion polls have shown the majority of Americans support it as well. A Pew Research Centre poll, conducted March 13-17, pegged support for building Keystone at 66 per cent.

Doer said the comment period on the State Department report closes on Earth Day, April 22, and then there’s a 90-day period for responses before the final decision is likely to be announced by the president.

“If the decision is based on science and merit, I feel it is trending in a positive way, especially with the State Department report,” he said. “Some of the allegations about greenhouse gases fell like a house of cards with that report.”

But Doer said if the decision is based on “noise” or rhetoric, rather than facts, the decision “is a little bit more unpredictable.”

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