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The State Department is preparing its final report on the environmental impact of the Keystone XL pipeline. In a speech last week, President Barack Obama tied his approval of the project to net carbon emissions. The president said, “our national interest will be served only if this project does not significantly exacerbate the problem of carbon pollution.” A number of analysts interpreted the speech as laying the groundwork for approval. Others are convinced the president was signaling his intended rejection. For this month’s Environmental Outlook, Diane and her guests discuss the proposed tar sands pipeline from Canada to the Gulf Coast.
- Nicolas Loris energy policy analyst at Heritage Foundation.
- Coral Davenport energy and environment correspondent for National Journal.
- Michael Brune executive director of Sierra Club.
MS. DIANE REHMThanks for joining us. I'm Diane Rehm. Environmental and business groups look to Pres. Obama last week for clues about the fate of the Keystone XL pipeline. In a major speech on climate change, the president made ambiguous remarks about tying his decision to carbon emissions. In our ongoing environmental lookout series, we talk about prospects for the Keystone XL pipeline.
MS. DIANE REHMJoining me in the studio, Nicolas Loris of The Heritage Foundation and Coral Davenport of National Journal. Joining us by phone from Oakland, Calif., Michael Brune of the Sierra Club. I know many of you feel strongly about this project, give us your thoughts, call us on 800-433-8850, send us an email to firstname.lastname@example.org, follow us on Facebook or send us a tweet. Good morning to you all.
MS. CORAL DAVENPORTGood morning.
MR. NICOLAS LORISGood morning.
MR. MICHAEL BRUNEGood morning.
REHMGood to have you with us. Before we begin our conversation, let's hear a little more of what the president said.
PRESIDENT BARACK OBAMAAllowing the Keystone pipeline to be built requires a finding that doing so would be in our nation's interest. And our national interest will be served only if this project does not significantly exacerbate the problem of carbon pollution.
PRESIDENT BARACK OBAMAThe net effects of the pipeline's impact...
PRESIDENT BARACK OBAMAThe net effects of the pipeline's impact on our climate will be absolutely critical to determining whether this project is allowed to go forward. It is relevant.
REHMAnd let's see how all of you react to this. Michael Brune, what's your interpretation of what the president said?
BRUNEWell, good morning, Diane.
BRUNEFirst, I should just say that I was in the audience when the president gave that speech, and you heard the round of applause. The reason why we all applauded is because this is a really straightforward issue. The president said that our national interest will be served only if the project doesn't exacerbate the problem of carbon pollution, and the Keystone XL pipeline does exactly that.
BRUNEAnd the reason is that when you open up the floodgates and you allow for expansion in the tar sands where the pipeline that taps into some of the dirtiest fuels on Earth, you do. You significantly exacerbate the problem of carbon pollution. And to fight climate change effectively, we have to both reduce demand but also constrict the supply of dirty fuels. And so the president's remarks last week were really a milestone in this fight against the pipeline.
REHMSo you believe that ultimately?
BRUNEWe believe ultimately that the pipeline will be rejected. We've actually always had faith that the president's commitment to fight climate change was sincere, and we know that you don't fight climate change by increasing gas -- greenhouse gas emissions from highly carbon-intensive projects. So we just don't think that this pipeline is part of any smart strategy to reduce emissions.
REHMAll right. And turning to you, Nicolas Loris of The Heritage Foundation, what's your interpretation?
LORISWell, my interpretation is that, yes, it will increase greenhouse gas emissions. There's no question about that, but the Department of State's own environmental impact statement said that tar sands development is going to occur whether this pipeline is built or not. And in the grand scheme of things, if you look at the amount of carbon dioxide emissions worldwide, the Keystone XL pipeline is just a small portion of it.
LORISThere was a study from the Potsdam Institute and the Australian Climate Commission, and they said that we need a carbon budget of 700 billion metric tons of CO2 between 2010 and 2050. Keystone XL will be about 1 percent of that carbon budget. So in the grand scheme of things, it's not going to significantly increase emissions.
REHMSo you believe that the president will approve the pipeline?
LORISI do. I think the environmentalists scored a big win on his announcement over greenhouse gas regulations on new and existing power plants, and ultimately, I think he's going to approve the pipeline.
REHMCoral Davenport, here you have two absolutely opposing view. Where do you as a reporter for National Journal come out?
DAVENPORTDiane, I was reading Twitter while the president was giving his speech, and someone wrote on Twitter as soon as he made his remarks on the pipeline that his language was wide enough open you could lay a pipeline through it by design. He left the question open. The president said that he would not approve the pipeline unless it would -- was shown that it would significantly exacerbate, significantly contribute to greenhouse gas emissions.
DAVENPORTThe State Department has produced a draft environmental impact report right now which says that the pipeline will not significantly exacerbate carbon emissions. So if you were to take what the president said and look at the draft statement, the draft environmental impact report produced by the State Department, you would say, well, based on that criteria, the president would approve it. The State Department is finalizing that environmental impact statement now. That was a draft. We expect to see a final version of that statement.
DAVENPORTThat's going to tell us I think that's really going to signal which way the president is going to go on this. After the State Department put out its draft saying Keystone won't significantly exacerbate the problem of carbon emissions, the Environmental Protection Agency pushed back, and they said that's not true. You know, we disagree with that. You know, here over in this part of the administration, we say that it will increase -- significantly increase the problem of climate change.
DAVENPORTSo if the State Department goes back and rewrite that statement incorporating that input from the EPA and comes out with a new final environmental impact statement saying that the Keystone will dramatically or significantly increase the problem of climate change, I think that will pave the way clearly to the president rejecting the pipeline if the final statement says -- stays the same as what the draft says that it won't, then I think that the president will approve the pipeline. I think so we have to look at that final review that's going to tell us.
REHMRight, right. Michael Brune, wasn't that statement drafted prior to John Kerry's being appointed secretary of state? I asked that because John Kerry has been very much against the pipeline and then a statement came -- the statement came before he became secretary of state.
BRUNEYeah. Kerry, of course, has been a lifetime leader on -- in the fight against climate change. And the statement was being drafted as the secretary was being confirmed. But I want to talk about the State Department report because it's a joke. So the Sierra Club is suing the State Department right now over this report because, A, it was written by a member of the American Petroleum Institute. And, B, the fact that it was written by a member of the American Petroleum Institute is covered up. So we have (unintelligible) saying that...
REHMHow do you know that? How do you know that, Michael? How do you know that for a fact?
BRUNEIt's public information. The consultant at the State Department hired is a dues-paying member of the American Petroleum Institute.
BRUNEAnd the report itself did not disclose that. This is basic stuff. You know, I don't allow my kids to write their own report cards. And if they did, they wouldn't count. We should be viewing this pipeline on its merits and evaluating very clearly whether or not it's in our country's national interest. And as Coral said, U.S. EPA has pushed back on the State Department's analysis, so has almost the entire scientific -- climate scientific community and even Goldman Sachs is saying that this pipeline would dramatically increase greenhouse gas emissions.
BRUNEThe reason why and it's really simple is that tar sands development right now, the infrastructure is maxed out. They're producing about 1.8 million barrels of oil every day from the tar sands. And the industry wants to get to five or even 6 million barrels of oil every day. The only way they can do that is to build a whole slew of pipelines going down to the South, to the West Coast, to the East Coast.
BRUNESo if this pipeline which would be the biggest one, if this pipeline is built, it would dramatically increase the amount of tar sands oil coming out of the earth, and that's oil that would significantly increase carbon pollution because it's so carbon intensive.
REHMNow, Coral, I want to ask you about a member of the petroleum institute being part of writing that State Department report. To what extent in writing such a report, do you bring all sides to the table, or should it have come solely from those individuals within the Department of State?
DAVENPORTThe State Department is within its rights certainly to hire expert consultants, and that there were a lot of career bureaucrats also involved in writing that report. I mean that it was very extensive. It was, you know, I think there were a lot of career scientists, career analysts. It was a broad report, and they had been working on it.
DAVENPORTThe State Department had been working on it for a long time, but this has become a point of contention. And again, I think that, you know, whether or not that draft is significantly revised or changed, you know, in the final outcome is going to be ultimately the deciding factor.
REHMWere there also environmentalists on that panel?
DAVENPORTEnvironmentalists were consulted as well in putting together the report.
REHMBrought in to write the report with consultants from the petroleum institute?
DAVENPORTIt's my understand that sort of the key figures in putting together the report were mostly, you know, career -- the career folks at the State Department.
REHMBut you don't have the exact count?
DAVENPORTBut I don't have an exact count, and I can't say if an environmentalist would have had -- an environmentalist consultant would have had the same say as the (unintelligible).
REHMThat's interesting. Coral Davenport, she's energy and environmental correspondent for National Journal. Short break here. We'll be right back.
REHMAnd welcome back. As part of our environmental series which has been ongoing, we're talking about the Keystone pipeline, which is still very much a matter up in the air, awaiting both a final report from the Department of State as well as a final presidential thumbs up or thumbs down.
REHMHere with me: Nicolas Loris, he's at the Heritage Foundation, and Coral Davenport of the National Journal. Michael Brune is on the line with us. He is executive director of the Sierra Club. Michael Brune, do you have any idea how many individuals from the environmental movement and how many individuals from the other side, the industrial petroleum side, would have had a part in drafting that State Department report?
BRUNENone of my environmental colleagues have had a part in the State Department report. But I think that what Coral was saying is fair that this is a long report, a very long report, and there were plenty of career folks inside the State Department. I'm sure that some of them have environmental leanings. I'm sure that many of them don't. Our point is that prominent roles were given to a member of this -- of the American Petroleum Institute, and this wasn't disclosed.
BRUNEAnd the reason why we're focusing on this is because the analysis that this pipeline won't contribute significantly to greenhouse gas pollution is just outlandish when we know and even the State Department says the oil itself is highly carbon-intensive and the oil itself will significantly contribute to pollution. So...
REHMAll right. And let's turn to Nicolas Loris. Tell us what you know about the drafting of the State Department report and just who was involved.
LORISYeah. Well, I think Coral hit the nail on the head that it was a lot of Department of State bureaucrats involved in actually writing the report. But there was consulting from a lot of the other agencies. For instance, the Fish and Wildlife Services had input on where the pipeline should be rooted. A lot of the state environmental organizations, Department of Natural Resources, Nebraska's Department of Environmental Quality were all involved in the laying of the pipeline.
LORISAnd again, if you look at the amount of emissions that would increase as a result of bringing more tar sands, oil into the United States, you have to look at the alternatives as well. If we bring more and more in by rail car, we have to look at the emissions coming in by rail car. There is a recent article on The Wall Street Journal that said it's nearly 100,000 barrels of oil per day coming in by rail car down to the Texas Gulf Coast refineries.
LORISAnd they expect that number to increase -- to double to 200,000 barrels per day. So that's a quarter of the amount of the oil coming by a Keystone XL pipeline. So as they continue to ramp up, we need to look at the alternatives of what will happen without the pipeline.
REHMAll right. Coral, what will happen without the pipeline?
DAVENPORTSo one of the arguments that people make when they looked at the first draft assessment report is it with or without the pipeline, that oil is going to get out there. And so one of the arguments being made is that the oil is going to get out and it's going to burn, and that carbon is going to get in the air whether it's taken out through a pipeline or whether it's taken out by rail or truck or some other way.
DAVENPORTAnd so, you know, if that argument is accurate, then you can say, well, the pipeline may not make a difference in increasing carbon emissions because that oil would be burned and those emissions would happen either way. So the argument is that the market wants that oil. It will get out with or without the pipeline. And so this goes into some of the thinking about what we're going to see in final report.
REHMAll right. Here is an email from Brian in Flushing, Mich. He says, "One of the most important facts missing from the national debate on the proposed pipeline is this: it will not bring any more oil into the U.S., but we take the risk of spills on our land. Keystone XL would divert Canadian oil from refineries in the Midwest to the Gulf Coast where it can be refined and exported without paying U.S. taxes." And Michael Brune.
BRUNEThat's right. It's a pipeline that doesn't go to the United States but through the United States. We get all of the risk and very little, if any, of the reward. What would happen is, just as the email says, the oil would come from the tar sands, go all the way down to the Gulf. Most of it would be exported because the potential for increased profits is greater in that way.
BRUNEThe thing that's important to highlight is that we are using a lot less oil in the United States than we were just a few years ago, and we'll continue to use less oil over the next few years. This particular pipeline, if it's maxed out, would bring 830,000 barrels of oil every day through the United States. Last year, the president signed car standards to increase fuel efficiency in cars, in trucks and SUVs which, when it's finalized, will save three million barrels of oil every day.
BRUNEThe heavy-duty truck standard that the president talked about last week will save almost four to 500,000 barrels of oil per day. So we're starting to constrict the amount of oil that we're using. We shouldn't be expanding the amount of dirty oil that we're drilling at the same time.
REHMAll right. I want to go back to the list of participants, Nicolas, because I gather that as we speak, the EPA has challenged the State Department report. Is that correct, Coral?
DAVENPORTThe EPA has challenged the State Department.
REHMWas the EPA one of the agencies participating in writing of the original State Department report?
DAVENPORTIt is my clear understanding that outside agencies were consulted.
REHMOutside. But I'm asking about the EPA.
DAVENPORTMeaning involving the EPA, yes.
REHMMichael Brune, is that your understanding?
REHMThe EPA was indeed involved.
BRUNEWell, the EPA has been involved in this process over the last couple of years at different -- they didn't write this blast report, but they've involved -- been involved at several stages throughout this whole process.
REHMSo why are they challenging the report now, Coral?
DAVENPORTSo I mean, the EPA objected to the draft report when it came out a number of weeks ago for that reason. And they said, you know, this is -- we don't agree with this conclusion. The pipeline, if built, will increase the -- significantly increase carbon pollution. And you know, that's -- so this report was written and this -- but this does not concur with what the EPA analyst said.
REHMOK. So why was it left to the Department of State to write this report?
DAVENPORTIt's the State Department that makes the decision about whether or not this pipeline was built. The State Department is charged ultimately with making the decision on whether or not this pipeline is in the national interest. And the reason for that is that it goes across an international border. That is why it gets jurisdiction. It goes across an international border. And the ultimate, you know, the ultimate criteria is whether it's in the national interest, and a lot of elements go into that question of national interest. It involves, you know, what is our -- how does this affect our relationship with Canada?
REHMAll right. And here's an email from Larry who says, "We don't need the type of jobs or the money this pipeline would bring. I do sympathize with unemployed people, but the harm to us and the world from promoting tar sands oil is not worth it. If we go for this, what would we not do in the names of jobs or the economy?" Nicolas.
LORISWell, I think that jobs is an important aspect of this and the Department of State's ultimate conclusion that this pipeline is environmentally safe. They've come to that conclusion twice now. And you're talking about thousands of construction jobs and billions of dollars in property tax revenue for the states that the pipeline runs through over the life of the pipeline.
LORISSo when you're talking about increased energy supplies, jobs and twice concluded result from the Department of State saying that this pipeline is safe and it's going to probably be the safest in the nation because it's a standard that has met a bunch of different criteria from a number of different agencies including the Department of Transportation, you know, to me, I think this a no-brainer.
REHMMichael, how many jobs are we talking about?
BRUNEThe State Department says that there will be a couple thousand, I believe 2,000 temporary jobs and 35 permanent jobs. But let's be clear. Jobs are important, and it's a $7 billion pipeline. If you put $7 billion into any infrastructure, you're going to create jobs. Should we be investing $7 billion in new wind turbine facilities, solar installations, energy efficiency, which would create more jobs, three times as many jobs, or should we put it into a pipeline that -- and I'm sorry, Nick. It won't be safe.
BRUNEThe last tar sands pipeline, big tar sands pipeline to erupt in Kalamazoo, Mich., three years later is still not cleaned up. So this is not going to be a safe pipeline. Tar sands oil is more toxic, it's more heavy, and it's much more difficult to clean up.
REHMCoral, can we talk about that phrase in the national interest? What does that mean?
DAVENPORTThat means whatever President Obama thinks it means. It is so subjective. Normally -- I mean, the final decision, the way this works is, you know, is the draft and final report will be prepared and sent to the secretary of state. The secretary of state looks at all the information available, and whoever the secretary of state is makes the decision. Is this in the national interest? In this case, it's almost certain that, ultimately, it will get kicked up to the president.
DAVENPORTBut it can mean, you know, how does it -- again, how does it affect our relationship with Canada? Is this -- is it in the national -- you know, is it in the national interest to potentially alienate our friendly neighbor to the north? Is it in the -- are these 2,000 jobs, the creation of these 2,000 jobs, investing in this $7 billion infrastructure in the national interest? How does that trade off against the potential for increased carbon emissions?
DAVENPORTAre carbon emissions in the national interest? And this -- these are the pieces of information that the president puts together, and he makes that decision for himself. What was interesting is that, in the speech, he told us what criteria he's going to prioritize in making that decision. But it's really -- it's what -- it's up to him. What's in the national interest?
REHMAnd, Nick, you do believe it's in our national interest to approve the pipeline. Specify why.
LORISWell, I think the jobs and the energy security are two priorities, certainly. But, again, if you look at the overall increase in emissions from this pipeline in the context of global emissions, you're talking about a drop in the bucket. So whether this pipeline is built or not, it's not going to have a significant impact on climate change one way or the other.
REHMTo what extent are you concerned about the oil industry's history of spills and accidents and environmental disasters?
LORISWell, a pipeline is by far, in a way, the safest way to transport oil. I don't think we should stop building pipelines because, you know, we've had oil spills in the past. And that's certainly a risk, and companies should be liable for any damage, environmental or economic, that they cause. But at the same time, we have over 500,000 miles of pipeline in the United States, and the risk of spills has been pretty minimal.
REHMAnd you're listening to "The Diane Rehm Show." We're going to open the phones now, 800-433-8850, first to Chris in Jacksonville, Fla. Good morning to you.
CHRISGood morning, Diane. Thank you for taking my call.
CHRISI just wanted to say that regardless of the studies that show that this might be a minimal -- might have a minimal increase in the carbon footprint, you know, the United States, especially globally, it won't have that much of an effect according to the one study the State Department did.
CHRISBut regardless of that, the United States has an opportunity here to really send the right message to the rest of the world that we are absolutely ready to resist the pull of big business, to resist the pull of big oil and turn the clock back on the damage that was done to the environment. We can send the message that we will absolutely not continue to cave to big money like this and do the right thing.
BRUNEI agree with the caller. I have a question for Nick. Does the Heritage Foundation believe that climate change exists and is caused by humans?
LORISYeah, we acknowledge that climate change exists. We acknowledge that the earth is warming and that man-made emissions are playing an impact. I think the important part is if we stop all of our carbon dioxide emissions, you know, stop everything -- shut down all the coal plants, stop the pipelines, stop exhaling -- you know, by 2050, it's only going to reduce global temperatures .07 degrees Celsius.
LORISSo all of this economic harm is going to come for negligible impact on the climate, and I think that's an important point. Even former EPA Administrator Lisa Jackson said that unilaterally reducing greenhouse gas emissions is not going to make a dent on climate change.
BRUNESo why bother then? So I'm curious that since Heritage has come out against the -- or in favor of the pipeline, doesn't want to see carbon pollution regulated from coal plants, doesn't want to see fuel efficiency improve and, in fact, was critical of the president's move to improve fuel efficiency and save consumers at the pump, what exactly do you propose as a way to fight climate change, if anything?
LORISWell, I thought the best part of the president's speech was having communities better prepared for significant storms if and when these do occur because, listen, we're going to have severe weather storms, we're going to have droughts, we're going to have floods with or without increased greenhouse gas emissions. So having states and communities better prepared for significant weather events so we minimize the economic harm and just the devastation to these communities I think is a very prudent response because the rest of the...
BRUNENick, you misunderstood my question. I didn't ask, how do we deal with climate change? I asked, how do we fight it?
LORISThat is how we deal with climate change. Reducing greenhouse gas emissions in the United States is not going to deal with climate change. The World Resources Institute recently put out a study that said 60 different countries are building 1,200 coal-fired power plants around the world. No one else is making moves to reduce their greenhouse gas emissions to significantly slow climate change. So...
BRUNEThat's not true. That's not true. Australia has rejected every single proposed coal plant. Europe has rejected 73 proposed coal plants. Even China now is making more investments in wind and solar than coal.
LORISThey're making more investments in…
BRUNESo is there nothing that you think that we should do in the United States to reduce emissions, anything at all that the Heritage Foundation supports?
LORISWell, you know, you've seen market-based innovation and technology, you know, innovations-driven...
BRUNEHow about one policy?
BRUNEJust one policy you support to reduce greenhouse gas emissions.
LORISI don't know if there's any policy other than creating a market-based system that allows any type of energy to survive in the marketplace without subsidies. You know, that can allow for more efficient energy sources and more efficient technologies, and ultimately that'll reduce greenhouse gas emission.
REHMNicolas Loris, he is energy policy analyst at the Heritage Foundation. More of your calls, your email when we come back after a short break.
REHMAs we continue with our Environmental Outlook series, we focus today on the Keystone XL pipeline set to move into motion if both the State Department's revised report comes out approving it and the president himself approves it. We've had lots of emails like this one from Steve in Dallas, who says, "Why are private property rights not an issue with this pipeline? Keystone will ship mostly Canadian oil going to third countries after processing here. Could using eminent domain for Keystone be illegal or unconstitutional?" Coral.
DAVENPORTIt's not illegal to use eminent domain. But these are sort of part of the big considerations going into, you know, the whole -- the report on the impact of Keystone is over a hundred pages long, and it takes all of these elements into account. This process has been dragging on for several years. I think more than -- at least five years now. So the debate about how this impacts landowners and how this impacts states and the local, you know, the local debates as well, all of this have been part of the broader debate.
REHMAll right. To George in Fairfax, Va. You're on the air.
GEORGEYeah. I'd like to respond to the person from the Heritage Foundation who made the argument that if we stop the oil production, coal-fired plants that it would make negligible difference to the environmental CO2 pollution in the year 2050. Well, it seems to me this guy is not just incompetent, he is dangerous because he doesn't know and he's prepared to gamble possibly the future of the human race on his oil profits now. Because if we don't do something now and we're here to make the tipping point -- and let's face it, Japan moved eight feet in the last earthquake.
REHMAll right. George. And frankly, we don't need to use ad hominem comments on the program. I appreciate your passion, but let's keep it down. And, Nick, do you want to comment?
LORISYeah. I just would like to say that, again, this is something that has been universally acknowledged. Even, again, former EPA administrator Lisa Jackson said that, unilaterally reducing emissions is not going to make a significant impact on climate change. So it is a problem. Whether it's manmade or not, we certainly need to do something about it. But these policies are only going to increase energy costs, hurt American families again and again, destroy jobs for no noticeable impact on climate.
DAVENPORTNick, I want to clarify something. I remember the specific question that Lisa Jackson was asked when she said that, and she answered correctly that if the United States unilaterally cuts its carbon emissions as the largest historic polluter, now the second largest greenhouse gas polluter in the world, that -- her reply was that -- correctly, was that, that will not make a significant difference in global carbon pollution.
DAVENPORTBut the broader picture, and it's very important, is that what needs to happen and what former administrator Jackson and scientists have said is what needs to happen is emissions need to be cut around the world by all of the major emitters. And, you know, what other major emitters have said is that, nothing can happen.
DAVENPORTYou know, there can't be a treaty. There can't be an agreement on this unless they see action from the U.S. because China, which is the largest emitter, actually is taking action on this right now. They just instigated a pilot cap-and-trade program. You know, their new leadership is talking about putting a resource tax, taxing coal use, cutting carbon intensity in their GDP...
REHMSo what you're saying is that what Lisa Jackson actually said was if the U.S. does this unilaterally...
DAVENPORTOn its own.
REHM...on its own, without the cooperation of other countries...
DAVENPORTAny action from the rest of the world.
REHM...it would make little difference. That's the point. Let's go to Kalamazoo, Mich. Good morning, Caroline.
REHMHi there. Go right ahead.
CAROLINEI have a somewhat unique perspective. I live in Kalamazoo. And as you all know, the Kalamazoo river spill is the largest tar sands spill in history so far. And I want to emphasize so far. I also just returned from my childhood friend's ranch just a day before yesterday, Julia Trigg Crawford. You might have heard her interview on June 3, Dick Gordon's "The Story." It's titled "This Land Is My Land." It's about eminent domain abuse.
CAROLINEThey've taken her farm, and they've put the Keystone XL pipeline right through it. And a lot of landowners were there at the meeting, and they all very clearly stated that their land value has dropped since the assault on their farms, not surprising given what is inevitable to their water supply and to their land, quite frankly.
CAROLINEAlso, I just want to point out that here on the Kalamazoo River, not only have property values dropped, but 150 families had been permanently relocated. Their land has been condemned forever, and they have been relocated as a result of the tar sand spill here. Thirdly, to the gentleman from the Heritage Foundation, this is not oil. This is tar sand.
REHMThanks. Water supply, Michael Brune, any indication that water supply and quality of water could be affected?
BRUNEWell, it already is being affected as we heard from the caller from Michigan just a couple of minutes ago. And what we know about the bitumen that's coming from the tar sands is that it is heavier, it is more toxic, and it is more difficult to clean up. That's why it's taken a few years already to try to clean this out. But the eminent domain issue -- also I just want to speak too briefly because it's very important -- as Coral said, you know, using eminent domain to build this pipeline is legal, but it also is not right.
BRUNEThat's why the Sierra Club is actually working with the Tea Party, the Tea Party in Texas, because of this eminent domain issues. We did our first -- the Sierra Club's first ever civil disobedience in February to draw attention to both the pipeline and the need for President Obama to have a strong climate plan.
BRUNEAnd the person that I went to jail with was a farmer, a rancher, actually from Nebraska, not politically active previous to this, but the pipeline would go through his farm if it were to be built. And nobody wants a dirty, toxic pipeline through a place that they have lived in for -- their families lived in for generations. It's just not right.
REHMAll right. Here's an email from Don. He's in Pensacola, Fla. He says, "I understand there are significant tax advantages for corporations to route the pipeline through the Gulf Coast. Is there any truth to this?" Coral.
DAVENPORTThe primary reason the pipeline is going to the Gulf Coast is that is where that is our big -- the U.S.'s biggest port for importing and exporting oil. So that's where -- and that's where the oil would be refined, that's where it would go out. It's strategic. It's practical, you know, if you want -- if you're moving oil to somewhere and you want to get it out, you know, you want to get the refined product out, that's where you take it.
REHMMichael, tax advantages.
BRUNEThey're great. There's a lot of money in this pipeline, and there's a lot of money in oil, much less tar sands oil. And so when you go on the earnings cost for TransCanada and some other refiners down in the Gulf, you hear them say quite clearly and without any hesitation that most of this oil would likely be exported because there's an opportunity for greater profits there.
BRUNESo that's another reason why this pipeline is just a boondoggle because all of those landowners would be facing all the risks. All of us would face the risk of increased climate disruption, and most of the oil would be shipped to overseas.
REHMAll right. To Houston, Texas. Hi there, David.
DAVIDHello, Diane. Thanks so much for taking my call from...
DAVID... (unintelligible) in Texas. We actually have five pipelines currently under construction in Texas: One from Louisiana into the Belmont area, two or three from the Eagle Ford shale and one from Cushing, and these are natural gas and oil pipelines. And I guess -- I hear a lot of concern about the Keystone XL in what pretty much a max refining capacity. And I just, you know, I think the private sector does saw these things.
DAVIDI think about Warren Buffett deciding that Burlington Northern is going to go to a natural gas-powered engine. And they're going to build the infrastructure for that. So to me, there is industry solving the problems of how to use energy more cheaply than more efficiently already. And so, you know, I think the fear over this pipeline is one that the market's going to solve anyway. And I don't think you're going to see the number of barrels being shipped through that your members of your talk show panel are worried about.
REHMAll right. Michael Brune, do you want to comment?
BRUNEI think we have a different perception of the problem that the market will solve than the caller. I don't see there's any way that the market, in this case, is going to solve the problem of whether or not tar sands expansion occurs because you have governments who the authority to build these pipelines that would allow for expansion or not build them.
BRUNEOne of the things that hasn't been mentioned on this show yet is that the government of British Columbia has just -- the new government -- the new conservative government and British Columbia has just rejected the proposed pipeline that would go through their territory that would ostensibly have shipped oil from the tar sands to India and/or China. And so what we are seeing is that people in British Columbia in Canada don't want to see a pipeline go through their community.
BRUNEThere's a lot of people in the U.S. who don't want to see pipelines come through the U.S. There are people in Eastern Canada who are fighting the pipelines there. And so in one sense, yeah, I do think the market in the sense the public market for fossil fuels is speaking, and what they're saying is that we need to move beyond fossil fuels when solar and wind put more people to work and keep our air and water clean and our climate stable.
REHMHere's an email from Kathleen. She says, "Keystone's Yellowstone pipeline broke years ago, and the mess is still not cleaned up. The proposed pipeline goes through the bread basket of the U.S. where the waterways above and ground below are interconnected. A pipeline break is inevitable because of the toxic nature of the dirty oil coming through it." Nicolas.
LORISWell, again, I think the risks of building a pipeline are there. And even though the Department of State concluded that this pipeline would be safe, you know, you can't prevent an accident necessarily from happening all the time. But...
REHMNow, when you say concluded, isn't that still in progress, that report?
LORISWell, yeah. They'll make their final assessment, yes.
LORISBut in their draft environmental assessments...
LORIS...both of them have concluded that it has been safe. But the National Academy of Sciences has said that the (unintelligible) the diluted bitumen coming down from the tar sands oil in a pipeline is no more corrosive than any other oil in any pipeline. So even though it is more acidic, it's not more corrosive by means of the way that it's heated up and transported through the pipeline.
BRUNEWell, then why then they can't clean it up? It's more toxic than conventional oil. It's more difficult to clean up than conventional oil. If it's "safe," why has it taken three years and they still have not been able to clean it up in Michigan?
REHMAll right. To...
BRUNEWhat's going on?
REHM...Concord, N.H. Jamie, you're on the air.
JAMIEDiane, thank you so much for your show and for the level of the dialogue that you promote. My comments -- actually a question. So for me, I still am seeing that corporatist interests are ruling this over the interest of the average working person. I agree also that the safety may be adjudicated now to be safe, but I doubt in 10 years when it falls out of consciousness that it'll continue to be safe. My question is, in the past, we've often heard conservatives argue that the United States need for a strong naval superiority.
JAMIEOur international aggressions in Iraq had the underlying purpose of securing our oil, and we've always talked about needing to become energy independent. We've also talked about the need for more jobs, and yet we are exporting this oil and allowing it to be traded on the ICE exchange unregulated in London. This oil was not staying in the United States. We are not keeping it here and using it to lower the price of gasoline for the most vulnerable people in our society who most drive to work.
REHMAll right. And you're listening to "The Diane Rehm Show." I think that's an issue that confuses many people, Coral.
DAVENPORTThe -- so the caller suggested that the oil should, you know, the oil from the pipeline should not be brought down for export, but it should be brought in and used in the U.S.
REHMBut we don't need it.
DAVENPORTWell, there's a couple of things. First of all, the U.S. is enjoying a huge boom in both oil and natural gas production. The combination of the boom in U.S. oil production and the decline in U.S. oil use, thanks to -- largely to increases in fuel economy standards, is putting the position -- putting the U.S. to be in one of the largest oil producers, if not the largest oil producer in the world, in the next 20 years.
DAVENPORTAnd there's another point as well, which is that even if the Keystone oil was to come into the U.S. and stay in the U.S., that doesn't unfortunately mean that it would lower gasoline prices. The price of gasoline and the price is dependent on the price of oil, which is set on a global market. So, you know, oil is a fluid commodity, it's traded around the world. Our gas prices are dependent on, you know, global oil prices. So wherever it goes, we're stuck with what our gas prices are.
REHMAll right. And a final email for you, Michael, "Please talk about the petroleum coke that's washing up on the shores of the Detroit River from the tar sands in Canada. What are the plans for all of that coke byproduct from tar sands processing?"
BRUNEGreat question. So petroleum coke is a byproduct of the refining process. When the tar sands oil is drilled or mined, before it's put in a pipeline, it's refined in this pet coke as it's called, is one of the byproducts. A lot of that pet coke -- first of all, it's highly carbon intensive. It's one of the most, if not the most carbon-intensive fuel on the planet. Much of it is sent overseas and it's burned as an alternative, ironically enough, to coal or to natural gas. And so it's burned in power plants to produce electricity, highly carbon intensive.
BRUNEIf coal is bad as a greenhouse gas warming agent, pet coke is a lot worse. And so this has been sort of the discovery throughout these process is that tar sands oil is not only carbon intensive when it's mined and drilled, but when you add the pet coke into it, it makes it up to 50 or almost 50 percent more carbon-intensive. But it's also an environmental justice nightmare particularly for those communities in Detroit that are living next to these mountains of pet coke that are waiting to be exported.
REHMAll right. We'll leave it at that. Michael Brune, he's with the Sierra Club, Coral Davenport writes for National Journal, Nicolas Loris is with the Heritage Foundation. When do we expect a final decision, Coral?
DAVENPORTOh, they keep dragging it out. We thought it would be the end of the summer. Now, we think maybe fall. Now, I'm hearing maybe by the end of the year.
REHMAll right. And we'll keep an eye on it. Thanks for listening, all. I'm Diane Rehm.
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