Ten XL-sized Myths From Both Sides of Keystone Pipeline Debate

As some 35,000 opponents to the Keystone Pipeline gathered in front of the White House yesterday trying to persuade President Obama to just say no to the pipeline, I reflected upon some of the myths about the pipeline that have been bandied about by both sides on the issue.

Keystone XL protest in Washington.
(photo by Shadia Fayne Wood/Project Survival Media
via 350.org)

There are, as in most things, no absolutes in this debate. Digging deeper than the rhetoric and sloganeering, we find that both sides exaggerate the impacts of the Keystone Pipeline, the positives and the negatives.

Here are ten myths about the Keystone XL Pipeline (KXL), some of which I shared on the Payne Nation radio show a little over a year ago:

1.) Stopping KXL will help stop climate change - With the potential to transport an estimated 590,000 barrels a day, KXL certainly has a large carbon footprint. Yet, it is really only a drop in the barrel of global contributions to greenhouse gases. And if KXL is stopped, there is no guarantee there won't be alternatives to getting this oil to market; in fact, there are at least two proposed alternatives through western Canada being considered.

2.) KXL will create tens or hundreds of thousands or even millions of jobs - Jobs will be created, certainly, in the US, Canada, and probably elsewhere. But it is too difficult to substantiate the claims of either proponents or opponents, which range from one million to 200,000, and from 15,000 to "as few as 20" once construction is completed. Of curious note, according to one source, in TransCanada's 2008 original permit application, the pipeline developer claimed "a peak work force of approximately 3,500 to 4,200 construction personnel." Temporary construction jobs, that is, and probably "person-year" jobs (i.e. 1 person working full-time for one year.) 

3.) Tar sands oil is not worse for climate change - Proponents of KXL claim that tar sands oil only produce 6 percent more carbon than conventional crude oil, but other reports estimate the amount to be more than 20 percent. Whatever the amount, there is certainly going to be an increase, which could lead to health risks from emissions and potentially increase the costs associated with increased climate instability.

4.) America needs the tar sands oil - The oil from KXL was never intended for US markets. It will make its way to the Gulf Coast refineries, where it will likely be put on the more lucrative global market. TransCanada stated as much in a presentation to investors, suggesting greater profits for the company. Besides, with greater fuel efficiency standards, our need for oil may in fact be decreasing not increasing.

5.) The US should buy oil from a friendly neighbor like Canada rather than hostile countries - The US has steadily been reducing its dependence on oil from the Persian Gulf for years. In fact, according to data from the Energy Information Administration, Canada and Latin America already supply more oil than Saudi Arabia and other countries in the Middle East.  

6.) Tar sands oil will lower gas prices in the US - According to several studies, KXL oil will have little or no impact on overall US gas prices, which are set by a much more complicated set of global market factors.

7.) Tar sands oil will increase gas prices in the US - Again, KXL oil will have little or no impact on gas prices across the US, although according to a recent study, it could increase prices in the US Midwest by 10-20 cents per gallon, as the oil bypasses that market and heads south.

8.) Oil leaks from the existing pipeline have little impact on the environment - Proponents of the pipeline like to downplay the environmental impacts of oil leaks. However, the existing Keystone pipeline, to which the one under debate would be an extension leaked at least 12 times in 2011, including one spill in North Dakota that amounted to 21,000 gallons of oil, and a different tar sands pipeline spilled over 840,000 gallons of crude oil into the Kalamazoo River in Michigan in 2010. Such spills have an economic impact as well. The costs of the Kalamazoo River cleanup exceeded $650 million. 

9.) Tar sands oil will reduce US dependency on foreign oil - It depends upon how you define "foreign oil." Arguably, Canada is still not a part of the US and, even if some of this oil were to make it into the US market, in the scheme of things, it matters little where oil comes from in what is a complex, interdependent global market. And, if the tar sands oil will be refined in Port Arthur, TX, by a refinery half-owned by Saudi Aramco, as some suggest, where does the oil come from after all? 

10.) Building the KXL is inevitable - This argument has been made by proponents for years -- and even a few environmentalists. The latter suggest trying to stop KXL diverts attention from coming up with the full suite of solutions we'll need to wean ourselves from fossil fuels over the long haul, invest in alternative energy, and address climate change. 

I remain skeptical about the claims on both sides of the Keystone Pipeline, but I hope that the Obama administration will take a look at all the data and come to a reasonable decision about what to do, rather than give in to the side with the largest wallet or most strident voice.

Joshua Brown's 3 Biggest Investment Fads Of 2011

Joshua Brown, one of our StockTwits favorites aka @reformedbroker, was on CNBC last night and offered three investment fads for 2011, including social networking IPOs, muni defaults, and commodities like agriculture.

Of special interest to Green Skeptic readers, Josh suggests avoiding anything tied too closely to the Chinese infrastructure build-out and he doesn't think natural gas is quite ready, but suggests "keeping an eye on it" and "maybe even start to nibble," especially if oil goes over $100, which several sources are fully expecting in 2011.

2008: What a Year -- Bring on 2009!

Good riddance 2008.

It was a strange year, with many ups and downs for me professionally and personally.

I had knee surgery in January 2008, shortly after one of my largest long holdings, First Solar, took a nose dive. Then my Patriots blew a 16-0 season with a loss to the New York Giants in the Super Bowl. I spent a lot of time in DC rather than home in Philadelphia, which kept me away from family too much. I tried to make change happen where change wasn't wanted and made some foolish decisions.

But I went to India, met some spectacular social entrepreneurs there and around the world, and spoke at conferences from Aspen to Salzburg. I had a poem in the American Poetry Review and did two phenomenal readings -- one in New York at the start of the year and at the University of Pennsylvania towards the end. And I got back to Alaska after ten years away, which renewed my soul.

I also built a team at Ashoka, where I was vice president for global development, and helped put together a major partnership with the Gates Foundation around entrepreneurial agricultural solutions in Africa and India.

Then I left that gig to start my own green energy investing biz. At the time oil was approaching $145/barrel and people were hot on the idea. In a matter of months, oil had shaved off 100 bucks and people began asking me "Does oil at 40 kill your start-up?"

A helluva year.

2008 was a year of adjustments, ambiguity, and ambition.

2009 will be a year of adjustments, ambiguity, and ambition, too.

What will be different?

For starters, I'm going to approach 2009 on my terms and with even more dedication to pursuing my idea.

I'm going to stay positive and focused and take the steps necessary to get this thing off the ground. Sure, I will make some adjustments to my portfolio, but I will keep focused on the long-term potential I know is there for clean tech, green energy, and energy efficiency. (And I'll keep trying to contribute to the excellent conversation going on over at stocktwits.com)

I'm also going to get both more global and more local, connecting with entrepreneurs and projects around the world, as I have in the past, but also more locally through things like Philly StartUp Leaders and other local networks.

I will keep trying to improve this blog, exploring the new green economy with a skeptical eye and a passionate heart.

Oh, and I'm going to find a publisher for my poetry collection, finally. (So if you're reading this, publishers, ping me an offer.)

2009 -- bring it on!

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On Alternative Energy, Oil Prices, and the Impending OPEC Summit

The sky is falling for alternative energy.

That's true, at least, if you believe the New York Times. In an article yesterday, Clifford Krauss took a decidedly dour view of the prospects for renewable energy in the near future.

"The central questions facing renewables now," according to Krauss, "are how long credit will be tight and how low oil and natural gas prices will fall. Oil and gas are still relatively expensive by historical standards, but the prices have fallen by half since July."

Indeed, oil tumbled more than 5 percent Tuesday, according to Reuters, "amid worries a global recession will crush fuel demand, limiting the impact of any supply cuts by OPEC."

U.S. oil for November delivery tumbled $3.98 a barrel to $70.27 by 12:33 p.m., after hitting a session high of $75.69. Natural gas has also pushed down by close to half to $6.79 per thousand cubic feet from $13.58 in early July.

OPEC is set to meet on Friday, which has many analysts scrambling to anticipate what they will do. Some analysts close to the situation cite Iran's assertion that "drop in demand could push OPEC to cut output by 2 - 2.5 million barrels per day, while other members have said a smaller cut may be needed."

Energy analyst Gregor MacDonald is "not convinced they need to cut that much."

"Remember," Gregor wrote in his blog yesterday, "this meme of demand destruction is is very much perception related right now. There is not alot of data to support it. US demand numbers revived very quickly in July and August when petrol prices fell. The new demand data showing US is down again actually has alot to do with people in the South simply being unable to obtain petrol, after hurricane Ike."

The forces do seem to be aligning against alternative energy, despite the $17 billion tax credit rider attached the Paulson-Bernanke rescue blanket.

Seemingly, a perfect storm is brewing against alternative energy development: low fuel prices, lack of credit, and the government shelling out money it doesn't have to shysters and speculators who took on too much risk.

But at the end of the day, we're still going to have several problems with which to deal, including a dwindling and more difficult to access (read costly) oil and gas supply, renewable energy portfolio standards in many states, global pressures to deal with greenhouse gas emissions, and continued increases in global demand for energy.

Unlike the collapse in oil prices in the 1980s, when the nascent renewables market evaporated, renewable energy today is a big business. The total investment in the sector increased to $148.4 billion last year, according to a New Energy Finance analyst quoted in the Times.

While this year investment is likely to be lower than last, the upward trend may be hard to stop.

And if you think low oil prices are be back to stay? Think again, says MacDonald.

"Already, these price levels around 70.00 are the set-up to a new price high next year," MacDonald writes. "At 100.00, we can have lots of steady supply without much need to go higher. At 70.00, supply is killed off and then we ramp again. Next time above 150.00."

John Whitehead, a professor in the Department of Economics at Appalachian State University, thinks that it's essential we price nonrenewable energy in a way that accounts for the associated negative externalities. He suggests, as others have, that cap-and-trade or a carbon tax can "keep the demand for renewable energy going strong."

"Since we can't much afford renewable energy subsidies with a big budget deficit," Whitehead writes. "I will go so far as to say that high nonrenewable prices are the only way to reach the point where we significantly shift to renewable energy."

But others argue that cap-and-trade and carbon taxes are market distortions (although the subsidies fossil fuels have been receiving for years may be equally so) and, in the end, will do little to spur the level of economic activity that is needed.

A temporary slip in oil prices, however, that leads to a higher spike may shift the floor yet again.

"Let's make this simple," Gregor writes. "If OPEC cuts big and gets the price back up to 90.00 or 100.00, then the chances of a new price high in oil next year will diminish. But if price, for whatever reason, stays at 70.00 into the middle of Winter, then prepare for 160.00 by next August."

And this time, it may just be game-changing levels in favor of the new green economy.

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Hank, Tell George to Pass This Sucker and Let's Get On with the New Green Economy

Image via WikipediaH.R. 6899, the 290-page energy bill that passed the House on Monday night will come up before the Senate next. Let's hope it doesn't fall prey to partisan politics.

Rather, this could be an opportunity for President Bush and the Sedate, er Senate, to put aside partisan politics. Sure, I know Democratic Speaker of the House Nancy Pelosi has called the Bill a "bold step forward that will help end our dependence on foreign oil," and that makes some in the GOP grit their teeth.

But let them also bite their tongues and see this Bill for what it can really be in these turbulent times: part of a real plan to stimulate our economy and jump-start the new green economy.

There's something for every one in this monster, whether your mantra is "drill baby drill" or "Here Comes the Sun," you have reason to support this as a step in the right direction.

It lets states decide on what reasonable are limits for drilling, stimulates renewable investments, and closes long-gaping fossil-fuel tax loopholes.

Here's the preamble:

To advance the national security interests of the United States by reducing its dependency on oil through renewable and clean, alternative fuel technologies while building a bridge to the future through expanded access to Federal oil and natural gas resources, revising the relationship between the oil and gas industry and the consumers who own those resources and deserve a fair return from the development of publicly owned oil and gas, ending tax subsidies for large oil and gas companies, and facilitating energy efficiencies in the building, housing, and transportation sectors, and for other purposes.

What's not to like?

I'm hoping my former Chairman (from TNC) Hammerin' Hank Paulson will knock some sense into Prexy George and change his mind on vetoing what's been labeled the "Comprehensive American Energy Security and Consumer Protection Act."

It's time for sound and secure energy policy, economic stimulus rather than bailouts and styptic pencils. Time to jump-start the new green economy and give us a break from the market madness.

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Energy: Speculating on Oil Speculators, Wallstrip and others Weigh In

Is the high price of oil due to oil speculation? Opinions differ on the impact of investors looking to make a buck on limited supplies and rising demand.

Some point out that while the White House would like to blame supply shortages, that's the same argument given back when Enron was fleecing California by manipulating energy prices.

"Many members of the media have forgotten how in 2001 the White House deflected any blame for California's suddenly stratospheric electrical costs away from their Houston friends," wrote Ed Wallace in his Business Week Viewpoint piece on 27 June 2008.

"Likewise, our Energy Secretary has a real problem discussing issues with facts. Like a broken record, he continues to maintain that in no way has speculation had anything to do with today's high oil prices. No, to hear Sam Bodman tell it, they are now and always have been caused by too many buyers chasing too few barrels of oil."

But, as our friends at The Oil Drum (TOD) reported last week, a recent report by the Commodity Futures Trading Commission (CFTC), "threw cold water on the recent rhetoric in Congressional testimonies and television commentary that high oil prices are caused by investment speculators."

TOD quotes from the report, "The Task Force's preliminary assessment is that current oil prices and the increase in oil prices between January 2003 and June 2008 are largely due to fundamental supply and demand factors." And pulls this graphic to illustrate this view:



"During this same period," according to the report, "activity on the crude oil futures market – as measured by the number of contracts outstanding, trading activity, and the number of traders – has increased significantly. While these increases broadly coincided with the run-up in crude oil prices, the Task Force's preliminary analysis to date does not support the proposition that speculative activity has systematically driven changes in oil prices."

Now, our favorite Web tv daily, Wallstrip, takes a crack at explaining the links between the run up and commodities speculation:



Now, we'll believe anything Julie tells us (except that she'll call when she says she will), but the fact is, the run-up in oil prices is probably a bit of everything: less supply, higher demand, speculation, and good old-fashioned free-market profiteering (not that there's anything wrong with it...).