The Keystone XL oil pipeline has cleared a critical hurdle. A long-awaited State Department analysis says the 1,700-mile pipeline probably would not increase the amount of oil removed from the Canadian tar sands. That finding suggests the politically divisive project would have little impact on climate change, a condition that could allow President Barack Obama to approve it. The State Department report is not the final word on Keystone: Secretary John Kerry must decide whether building the Canada-to-Texas pipeline serves the national interest before advising the president. Diane and her guests discuss what’s next in the ongoing saga of the Keystone XL pipeline.

Guests

  • Daniel Weiss director of climate strategy, Center for American Progress.
  • Dina Cappiello national environmental reporter, The Associated Press.
  • Nicolas Loris energy policy analyst, Heritage Foundation.

Transcript

  • 10:06:53

    MS. DIANE REHMThanks for joining us. I'm Diane Rehm. The State Department on Friday released its environmental analysis of the Keystone XL Pipeline. President Barack Obama has said he'll make his decision based on the pipeline's impact on climate change. Here in the studio to talk about what's in the report and how it might influence the president's decision: Nick Loris of the Heritage Foundation, Dina Cappiello with the Associated Press, and Daniel Weiss of the Center for American Progress.

  • 10:07:32

    MS. DIANE REHMI hope you'll join us, weigh in with your thoughts, 800-433-8850. Your email should go to drshow@wamu.org. You can follow us in Facebook or send us a tweet. Welcome to all of you.

  • 10:07:50

    MR. NICOLAS LORISGlad to be here.

  • 10:07:52

    MS. DINA CAPPIELLOThanks, Diane.

  • 10:07:52

    MR. DANIEL WEISSThanks for having me.

  • 10:07:53

    REHMGood to see you all. Dina, tell us about this report. What does it say and why is the State Department involved?

  • 10:08:04

    CAPPIELLOWell, the State Department is involved, first and foremost, 'cause this is a pipeline that crosses an international border from Canada into the U.S. So this is a pipeline that requires a presidential permit. And the State Department, on Friday, issued what is called a final environmental impact statement. This is required of any major federal action that has a significant impact on the environment or is thought to have a significant impact on the environment, so just kind of the overview of what the environmental impacts would be.

  • 10:08:36

    CAPPIELLOAnd what it basically found is that, on greenhouse gases, on climate change, the pipeline and the oil of the pipeline would actually, obviously, bring into this country to refineries on the Gulf Coast, would contribute to climate change. But the State Department concluded that, regardless of the pipeline, those tar sands and that oil will be harvested and used, and that would go into the air as greenhouses gases anyway.

  • 10:09:01

    REHMRobert has an email which is a question I think lots of people have. "Is the State Department scientifically qualified to comment on the climate impact of tapping Canada's tar sands? I wasn't aware that international studies and atmospheric physics are akin."

  • 10:09:31

    CAPPIELLOWell, there's two points. First of all, they hired a contractor that specializes in evaluating these kind of environmental impacts. It's obviously very complicated. I agree. You're talking about predicting international oil markets going forward, oil prices going forward, greenhouse gas emissions going forward. But in addition, Diane, what happens now is this: starting on Feb. 5, there's a public comment period.

  • 10:09:59

    CAPPIELLOEight other federal agencies will weigh in, including ones that do have expertise in greenhouse gases, like the Environmental Protection Agency, like the Interior Department, so this is not over in terms of the federal analysis. The State Department issues its report, and then all of the federal agencies, eight other agencies weigh in and say what they think of their conclusions.

  • 10:10:21

    REHMAnd I do want to let listeners know we did invite the State Department to appear on the program this morning. They did not respond to our request. Dan, any concerns on your part about State Department's report as well as their expertise in issuing such a report?

  • 10:10:50

    WEISSWell, as Dina just mentioned -- I'll answer the second question first if you don't mind. As Dina just mentioned, there's a lot of concern about the contractors that the State Department hired...

  • 10:11:02

    REHMWhy?

  • 10:11:02

    WEISS...in order to do the report because they had done work for some of the companies involved who would benefit economically from the construction of the pipeline. There's a State Department inspector general report that's due later this month that will hopefully settle once and for all whether or not there was a conflict of interest. On one of the forms, one of the contractors said they had not done work for TransCanada, the pipeline company, when, in fact, they had.

  • 10:11:30

    WEISSSo we'll see about that.

  • 10:11:31

    REHMWere there any environmentalists on that panel as well?

  • 10:11:35

    WEISSNo. Because this was a contractor that they hired to do the work, to do the analysis for them.

  • 10:11:40

    REHMI see.

  • 10:11:40

    WEISSIn terms of what -- the heart of this case that the State Department's making is that, geez, it doesn't really matter whether or not the pipeline is built. This tar sands oil, which is the dirtiest oil on earth, in terms of carbon pollution. This tar sands oil is going to come out of the ground one way or another. If you don't build the pipeline, well, there'll be other pipelines.

  • 10:12:02

    WEISSIf you don't build this pipeline, they'll move it by rail. But, in fact, inside of the analysis, they debunk both of those assumptions. First, they say that the other pipelines that had been proposed that would carry the tar sands oil to other parts of Canada for export are very controversial and nowhere close to being built. And, second, the analysis indicates that the amount of tar sands oil that's already moving by rail would have to increase by six times in order to carry all the oil that the pipeline would carry, which is unlikely to happen.

  • 10:12:38

    REHMDan Weiss of the Center for American Progress. How about you, Nick Loris? How do you see State Department's report, its ability to make such a report and, as Dan points out, the fact that some of the people involved had been contractors for the companies?

  • 10:13:05

    LORISWell, I think weeding out any conflict of interest areas is certainly important, but if you look at the list of preparers of this report that’s listed in the final environmental impact statement, there's over 100 people that worked on this report so it's incredibly detailed. There's a lot of scrutiny. And only about 10 of those people work in the State Department.

  • 10:13:24

    LORISThe rest are economists, climatologists, geologists, anthropologists. So, yeah, maybe one person had a conflict of interest. We have to wait to see if the Department of State office of inspector general comes out and says that in a forthcoming report, but at the same time, because of the glut of people that worked on this report, I don't really see any one person having any significant influence on this report.

  • 10:13:48

    REHMDo you see this report giving the president the cover he needs to move forward with the pipeline?

  • 10:13:57

    LORISI do, especially because it says that the tar sands crude oil is going to be developed with or without this pipeline. And we've already seen a lot of rail coming into the United States. It's quadrupled over the past two years. So I think you're going to see, because of the economic value of this resource, I think you are going to see it built, maybe not as expeditiously as the companies want, but it's going to be developed.

  • 10:14:21

    REHMEconomic value to whom?

  • 10:14:25

    LORISWell, that's a good question, and I think there's a lot of economic value that can come into the United States. There's tens of thousands of construction jobs over the...

  • 10:14:32

    REHMTens of thousands.

  • 10:14:34

    LORISThe State Department said 42,000 jobs over the two-year construction timeline of this period. It may be less than that. There's been other reports of, you know, four to 6,000 jobs, only 35 to 50 permanent jobs, but at the same time, there's...

  • 10:14:49

    REHMThirty-five to 50 permanent.

  • 10:14:51

    LORISPermanent jobs, that's correct.

  • 10:14:51

    REHMThe others would last for...

  • 10:14:54

    LORISThe duration of the construction of the pipeline.

  • 10:14:56

    REHMWhich would be?

  • 10:14:56

    LORISWhich maybe would be about a year or two.

  • 10:14:59

    REHMAbout a year or two.

  • 10:15:00

    LORISThat's right.

  • 10:15:00

    REHMOK. If the president does not approve this pipeline, people are saying, well, then it would all be transported by rail through the United States. Is that necessarily the case, Dina?

  • 10:15:20

    CAPPIELLOWell, we've already seen, as was pointed out, an explosion in rail, oil going by rail, largely from the Bakken oil shale region in North Dakota. It would require a significant ramp up. But maybe, as a reporter in Houston, Texas, for five years where I covered energy and environment, I guess the oil industry, I think, will make it happen if they want to make it happen.

  • 10:15:44

    CAPPIELLOAnd I think there are some barriers to actually getting all the rail that's needed for this every extensive resource and also alternative pipelines in Canada to get it to ports on the coasts and get it refined elsewhere. But I don't see -- I think it's a high bar to say this will just remain in the ground.

  • 10:16:02

    REHMYes. I understand that. But to what extent might the possibility exist that it would simply be piped across Canada, Dan?

  • 10:16:16

    WEISSWell, there are pipeline proposals in Canada as the State Department analysis acknowledges, but none of them are close to being approved, let alone started and they're very controversial there. Going back to Dina's point, there was some reporting by Reuter's late last year. They asked a number of Canadian railroad executives whether or not railroad could substitute for the Keystone Pipeline, and, in fact, they said no.

  • 10:16:41

    WEISSRail can compliment. Rail is a niche compliment to a pipeline, but it can never move the volumes. Like I said, we're moving about 120,000 barrels of tar sands oil from Canada right now. We'd have to increase that by six times so we'd need six times the number of trains in order to move all the tar sands oil that would come through the Keystone Pipeline. That's a tall order.

  • 10:17:08

    WEISSAnd as Dina used, she said there was going to be an explosion in rail. Well, in fact, there has been explosions, but they've been the rail cars themselves. There's been one up in the Bakken. There was the horrible tragedy in Quebec. And so, as the United States begins to put stricter standards in place for moving oil by rail, which many politicians want to have happen, that's going to even reduce further the amount of tar sands oil that can be moved by rail.

  • 10:17:32

    REHMTell me about the amount of oil moved out of these tar sands. I don't quite understand that aspect of this report, that what the State Department is saying is that the removal of that oil from tar sands would not significantly hurt the environment. Dina?

  • 10:18:04

    CAPPIELLOWell, how they include that, Diane, is they're assuming that the pipeline would have no impact on the oil coming out of the ground, regardless. So there a couple of...

  • 10:18:14

    REHMThey're going to remove the same amount...

  • 10:18:16

    CAPPIELLORight, correct.

  • 10:18:16

    REHM...no matter whether it's transported by pipeline...

  • 10:18:20

    CAPPIELLOSo the condition here, right, is that it's happening anyway, which is what, you know, Mr. Weiss said is that the key argument here is that it's going to happen regardless.

  • 10:18:30

    REHMDina Cappiello, she's national environmental reporter for the Associated Press. We'll take a short break, talk further, take your calls. Stay with us.

  • 10:20:00

    REHMWelcome back. Three people are here in the studio as we talk about the report released last Friday from the State Department indicating that the extraction of oil from the tar sands in Canada would not necessarily increase the amount of pollution in the air, thereby sort of implying that the president might go forward with the construction of the pipeline. He has said, if it did not add to the problem of climate change, he would consider moving forward.

  • 10:20:51

    REHMNow, here's a question because lots of politicians keep saying that the U.S. energy independence would be affected by the creation of this pipeline, that it would improve our own situation. Is that really true, Nick? How would this oil pipeline affect U.S. energy independence?

  • 10:21:27

    LORISWell, I don't think it would a whole lot. And I really reject the whole notion of energy independency because oil is a globally-traded commodity. Yes, I think the pipeline should be built, and it would be great to have 830,000 barrels of oil per day coming from a stable and important trading partner in Canada. This whole notion that we can be self-sufficient on oil makes little sense to me. You know, I think we should expand our supplies when it makes economic sense to do so, and import oil. It makes economic sense to do that.

  • 10:21:55

    REHMSo just to clarify, the only reason to construct this pipeline is to get it to the plants that would then, Dina...

  • 10:22:09

    CAPPIELLORefine it. So to answer your question, I mean, I don't think that this pipeline is going to make a big difference in how energy independent we are here in the U.S.

  • 10:22:19

    REHMBecause it would all be exported.

  • 10:22:20

    CAPPIELLOIt's just not enough, right. I mean, even if we consumed it all, it's still not enough for the oil that we consume on a daily basis. But what it does play into is the larger question of where we get our oil from. So this is heavy crude. Right now our sources of heavy crude are either the Middle East or Latin America, right.

  • 10:22:39

    CAPPIELLOSo this is -- there's a displacement effect here. If we bring in this crude from a friendly partner -- actually our largest source of oil is Canada currently, followed by Mexico -- that that's a better alternative not only in terms of energy security but also emissions by putting oil on barges from faraway countries, et cetera. So I think it's about where we get the oil from and where it's displaced. And the reason why it's happening -- to go to your other question -- is there are refineries in the Gulf Coast that specialize in this heavy crude that want it, that there's a demand for it.

  • 10:23:17

    REHMDoes Canada not have any such refineries on its own coast?

  • 10:23:23

    CAPPIELLOI don't believe they're on the coast. I mean, Dan, do you know that question?

  • 10:23:26

    WEISSYes, they do have refineries in the east. But here's the challenge. They want -- the Canadians are going to sell this oil -- shoot the oil through the pipeline to U.S. refineries.

  • 10:23:36

    REHM...to China.

  • 10:23:37

    WEISSAnd then the refined products will be exported. We're going to -- the U.S. will bear all the risk and get none of the reward -- or little of the reward of having the oil.

  • 10:23:46

    REHMThey will have employees constructing the pipeline.

  • 10:23:50

    WEISSYes, but that's only -- according to the State Department, that's only 3 to 4,000 temporary direct jobs. If we're interested in creating jobs in the energy industry, a study by the University of Massachusetts found that for every dollar investment, investments in wind, solar and energy deficiency, create three times more jobs than a job in the oil industry.

  • 10:24:12

    REHMWhat about that, Nick?

  • 10:24:14

    LORISWell, to me the fact that pipelines require few employees when it's all said and done then there would only be 35 to 50 employees isn't necessarily a bad thing. I think it's a plus in terms of that means, you know, they're highly efficient and that they have a high productivity of labor compared to other resources of energy. And that frees up labor and capital to do other things in the economy. So I don't necessarily see the fact that a pipeline has a few jobs in its final completed stage as necessarily a bad thing.

  • 10:24:43

    WEISSNo, it's a fine thing but it's being sold in part -- the proponents are selling it as a job creator. And it simply really isn't. You know, the 3 to 4,000 jobs, that's great but they're going to last two years. And then there'll be fewer people operating the pipeline than were on the roster of the Seattle Seahawks last night.

  • 10:25:01

    REHMWhat about the disruption to communities as the pipeline is built? What do we know about those plans?

  • 10:25:12

    WEISSWell, the greatest threat in that regard is that the pipeline route is only about 10 miles from what's called the Ogallala aquifer which is one of the greatest underground sources of water in the United States, provides water for one out of every five acres of American agriculture. And we know that should there be a pipeline spill that it's going to be very, very difficult to clean up.

  • 10:25:36

    REHMDid the State Department take that into account, Dina?

  • 10:25:41

    CAPPIELLOYes. They did evaluate the spills and their frequency of spills.

  • 10:25:44

    REHMBut the Ogallala aquifer...

  • 10:25:46

    CAPPIELLONo, they did. So actually in -- so when the pipeline was initially proposed -- remember this is kind of a do-over. So the pipeline was proposed. The president rejected it and then TransCanada came in and reapplied and basically divided it into two. So the southern half of this pipeline is actually already in operation. It goes from basically middle of the country to the Gulf Coast.

  • 10:26:08

    REHMAnd the president approved that.

  • 10:26:10

    CAPPIELLOIt's done -- well, the president didn't have to because it was actually -- it wasn't a presidential permit. It was actually inside our borders. It didn't require presidential approval. So what they did when they re-proposed it is they moved it farther away from this aquifer that Dan is talking about. And so although it's still 10 miles...

  • 10:26:27

    WEISSIt's about ten miles.

  • 10:26:28

    CAPPIELLO...it was literally -- its initial plans were actually going through the aquifer. And Nebraska and state officials, government officials in Nebraska did not like that plan. And so it was actually moved to avoid that, I guess, within ten miles.

  • 10:26:42

    REHMBut what about the disruption to communities? Put aside the aquifer itself, what about communities? Are they having any say about whether this pipeline is going to come through, Nick?

  • 10:27:01

    LORISThey are and they have in the past. And I think that's part of the reason why we're having this redo is because the state of Nebraska was really upset with the way that the pipeline was running. And, you know, given the states' rights that they have, there has been impact to communities and they worked with the state. They worked with the Department of State, and they worked with the state regulators in Nebraska to create a better alternative.

  • 10:27:22

    LORISNow that's not to say that everyone in which the pipeline runs through is happy. There's still a lot of community protests going on about the pipeline. But given the fact that they worked with the state and the Nebraskan governor has given the green light to the reroute proposal, I think, you know, they satisfactorily worked with the communities.

  • 10:27:41

    REHMBut surely it's not just Nebraska.

  • 10:27:44

    CAPPIELLOWell, actually it'll be three states, so it comes in in Montana, goes through Montana, South Dakota and then into Nebraska. So it's three states now that will be impacted by the right-of-way. And these will be obviously negotiated with landowners. And it's a complicated process that happens quite frequently for a lot of pipelines.

  • 10:28:03

    REHMBut that's just the southern portion.

  • 10:28:05

    CAPPIELLOThat's the northern. So the northern goes Montana, South Dakota, Nebraska. The southern's done and operating.

  • 10:28:11

    REHMAnd what about the community reaction to that southern portion?

  • 10:28:18

    WEISSWell, that's an excellent point, Diane, because, in the southern portion, to build it, they actually had to seize people's land to build the pipeline in places where the landowner -- ranchers predominantly did not want the pipeline going.

  • 10:28:33

    WEISSAnd, in fact, there's tens of thousands of people in Nebraska, ranchers, farmers and others, who don't want the pipeline going over their land and has -- or technically under because it's buried -- and have actually refused offers from TransCanada to sell the right to build the pipeline on their land. Whether or not the right of eminent domain is going to be invoked there is unclear but it has been invoked in Texas. And there have been ranchers who had the pipeline built on their -- or under their land against their will.

  • 10:29:07

    REHMThat is pretty...

  • 10:29:09

    WEISSAnd what's interesting is you had Tea Party people -- excuse me, Tea Party people and environmentalists working together in Texas to oppose this.

  • 10:29:17

    REHMInteresting. All right. We've got lots of callers. I want to go to the phones, 800-433-8850. Let's go to Ellis in Headsville, W.Va. You're on the air.

  • 10:29:35

    ELLISGood morning, Diane.

  • 10:29:36

    REHMHigh.

  • 10:29:36

    ELLISIt's nice to be on your show.

  • 10:29:38

    REHMThank you.

  • 10:29:39

    ELLISI'm a retired Foreign Service officer. And you had a question about the -- if the Department of State had any direct higher individuals that were qualified to make comments on this...

  • 10:29:51

    REHMYes.

  • 10:29:51

    ELLIS...TransCanada pipeline.

  • 10:29:53

    REHMRight.

  • 10:29:54

    ELLISIn the department, as you know, there are regional bureaus, and then there are specialty bureaus. And one of the bureaus is the Bureau of Ocean and International Environment and Scientific Affairs. I was in that bureau on the Kyoto protocol meetings at different times. And inside that bureau, one of the offices, the Environmental Quality and Transboundary Issues, Foreign Service officers, while we traditionally have liberal arts backgrounds or language skills, there are also groups of us that also have hard science backgrounds.

  • 10:30:28

    ELLISSo there are Foreign Service officers as well as direct higher government employee scientists that are special in this area that work for the department directly.

  • 10:30:37

    REHMI'm glad to hear that. The question becomes, how many of them were working on this pipeline issue, Dina?

  • 10:30:48

    CAPPIELLOWell, I think that you said, what, about 10?

  • 10:30:50

    LORISYeah, there's about 10 within the Department of State. And there's about 80 in the independent third party. I think their name was Environmental Resources Management.

  • 10:30:59

    CAPPIELLOThat's right.

  • 10:30:59

    LORISAnd then there was a handful of others from separate independent third parties. And now you're going to get comment from other agencies as well. So, as Dina mentioned, there's going to be eight federal agencies also weighing in on this, including the Environmental Protection Agency, the Department of Transportation, Commerce, Justice, so -- along with a 30-day public comment period again. So I think we'll get that additional weigh in.

  • 10:31:20

    REHMDan.

  • 10:31:20

    WEISSThe company that Nick mentioned, Energy Resources Management is the one that's at the heart of the conflict of interest dispute because they have done work for oil companies and the pipeline company that are involved in building this pipeline. And they did not disclose that, I believe, on their forms. You know, they have to do a disclosure. So when Nick said earlier, you know, maybe it's one person out of a hundred, it's one company that is the primary contractor to put together this analysis.

  • 10:31:51

    REHMDidn't somebody investigate that before they kept going?

  • 10:31:57

    CAPPIELLOWell, the State Department claims that they went through this completive interest analysis that they typically do. I mean, they obviously are supposed to check this before they hire a third party contractor. And that they saw no conflict of interest. I mean, as Dan mentioned, the IG is investigating this now. And I would just also just highlight for folks out there that, you know, these contractors that specialize in basically environmental impact statements -- I mean, there's a whole, like, subgenre of businesses out there that do this -- do work for many different people.

  • 10:32:29

    CAPPIELLOI mean, that's not, I don't think, a unique situation where you have a contractor that does EISes, that does work for the federal government in some cases and work for the industry in some cases and consults with environmental groups in some cases. So I don't know how unique that is, but I do think that the IG will obviously get to the bottom of it.

  • 10:32:49

    REHMDina Cappiello of the Associated Press, and you're listening to "The Diane Rehm Show." To Daniel in East Lansing, Mich., you're on the air.

  • 10:33:05

    DANIELHi. Thanks for taking my call.

  • 10:33:06

    REHMSurely.

  • 10:33:08

    DANIELIt's hard to know where to start. This pipeline is the wrong idea on so many levels and moves us in the wrong direction in so many different ways. We've already seen a degree -- 1 degree Celsius of temperature increase, you know, globally. We're heading towards 2 even if we leave all of this oil, all of the rest of the fossil fuels in the ground starting tomorrow.

  • 10:33:32

    DANIELWe've seen, you know, massive animal and plant die-offs. We're witnessing, you know, historic droughts and water depletion and, you know, a marked increase in the intensity and frequency of natural disasters. And that's with just less than one degree of temperature increase. It's going to be 2 degrees no matter what we do.

  • 10:33:53

    DANIELJames Hansen, the leading climate scientist in the world, has weighed in on this and said, you know, if we pull out the oil in the tar sands, we're looking at 400 gigatons of carbon -- additional carbon in the atmosphere. It's game over, in his words, if we do that. You know, there are tipping points. There are feedback loops that we have to worry about. If we start raising the temperature, you know, more, then we're looking at possibly, you know, releasing methane in massive amounts.

  • 10:34:22

    REHMAll right.

  • 10:34:23

    DANIELThis is just the wrong idea.

  • 10:34:25

    REHMThanks, Daniel. A, the wrong idea, Nick?

  • 10:34:29

    LORISI don't think so. And I think, if you look in the totality of climate change, you know, we've seen a 17-year hiatus in warming. There -- actually if you look at data from NOAA, there really isn't any connection to greenhouse gas increases with increased natural disasters.

  • 10:34:43

    LORISAnd if you look at this one project, you're talking about throughout the life of this pipeline maybe affecting climate by one-thousandth of a degree Celsius over the life of the entire pipeline. And that's done by climatologist Paul Knappenberger who looked at modeling the increased -- the marginal increased gas -- greenhouse gas emissions from building this pipeline using a climate model from the Environmental Protection Agency.

  • 10:35:07

    REHMDina.

  • 10:35:08

    CAPPIELLOOne thing that this brings up, Diane, that I think is worth mentioning is the conundrum that the White House is in, in some ways on this. I mean, the Keystone XL Pipeline and whatever decision Obama makes in the end is kind of reflective of this larger issue where here we have a president that supports all of the above in energy, including fossil fuels, including, you know, record oil production in this country, natural gas, at the same time, has a very aggressive plan to address climate change. And it's gotten him in hot water recently with his most staunchest allies, the environmental groups.

  • 10:35:41

    CAPPIELLOEighteen environmental groups very recently wrote the White House and said, you can't have it both ways. This doesn't make sense. And I think that this falls into that large debate of a president who wants both all forms of energy, even though it'll have a carbon footprint, and also reduce carbon at the same time and how he solves that.

  • 10:36:00

    REHMDan.

  • 10:36:01

    WEISSThanks. Well, just because he says all of the above does not mean that anything should go. And, in fact, not only will this pipeline add the equivalent of putting almost 6 million new cars a year on the road in terms of pollution, it makes it possible to further expand the tar sands oil up in Alberta beyond what's needed for this pipeline because it will help raise the price of oil up there. Right now it's discounted because they can't move the oil very much.

  • 10:36:27

    WEISSIt'll raise the price of oil up there and make other investments possible. So the carbon footprint of this is beyond just the 6 million vehicles that -- just one quick thing to answer on Nick's point. I'm surprised to hear that you're a climate science denier because, in fact, just a couple weeks ago the National Oceanography (sic) and Atmospheric Administration said that last year was the fourth warmest year on record.

  • 10:36:54

    WEISSEach decade that we've had has been warmer than the previous decade. So the zeroes were warmer than the '90s, and the '90s were warmer than the '80s. Thousands of scientists agree the climate change is real. It's caused by human beings. And the level of certainty is the same as the certainty that they have that smoking cigarettes causes cancer.

  • 10:37:12

    REHMDan Weiss, he's director of climate strategy at the Center for American Progress. We'll take a short break here. We'll come back, talk more, take your calls, your email. I look forward to speaking with you.

  • 10:39:59

    REHMAnd, as you can well imagine, we have many emails and many phone calls. Here's one from Paulo who says, "Is it true that neither federal taxpayers nor state taxpayers of any state will benefit from the processing of the oil from the pipeline, for the reason that it will all be processed in a tax-free zone?" Dan.

  • 10:40:32

    WEISSThe note is mostly correct, is that the refineries in the Gulf Coast are what's called a free-trade zone, that encourages American companies to produce products that are then shipped overseas. So the tar-sands oil will be pipelined down there. They'll be refined in these refineries in Port Arthur, Texas, and that area. Then the portion that's shipped overseas, the companies will not have to pay any income tax on the money they get from that, because that's the way the tax laws go. And we believe that most of the -- not most, a major portion of the oil will be exported.

  • 10:41:06

    WEISSNo one knows for sure. When TransCanada, the pipeline owners, were asked, can you guarantee that all of the refined oil will stay in the U.S., at a Congressional hearing, they declined to do so. In addition, there was a vote in the house a couple of years ago that put a stipulation on the pipeline that, again, all the oil that would be refined from Keystone would remain in the U.S. And that was defeated.

  • 10:41:28

    REHMNick.

  • 10:41:29

    LORISWell, I don't think the majority of it will be exported. I think it's going to make more economic sense to keep it here, when it does. And I mean that in a sense that, you know, we've seen a reduction in gasoline consumption as a result of this recession, as cars become more fuel efficient. So I think, as our economy starts to recover or continues to recover, you know, we see -- we might see the economics change in a couple years, where we're refining it here but also using it here.

  • 10:41:53

    REHMNick, do I understand correctly, however, that the oil extracted from the tar sands is dirty oil and that it may not be perfectly useful, certainly not for boats, but maybe not even for automobiles?

  • 10:42:15

    LORISNo, I don't think that's correct. They do have to do additional processing to it before it can even be refined. And then once it's refined, it can be used for any type of transportation.

  • 10:42:23

    REHMBut isn't it also the understanding that most of this oil is headed for China?

  • 10:42:33

    CAPPIELLOOnce it's refined, I don't think you can make that conclusion. I mean, the reason I think TransCanada had no comment when it was asked if it's a guarantee that this would remain here in the U.S., is that it's really not their decision. I mean, they're selling the oil to refiners. And then refiners sell the finished product, so...

  • 10:42:51

    REHMBut do we need the oil? We have been told that we're already at a stage where we're energy independent because of gas and oil that's coming out of our own ground.

  • 10:43:05

    CAPPIELLOThe statistic is, is that we are producing more oil in this country than we are importing for the first time, I think, in 20 years.

  • 10:43:13

    REHMRight.

  • 10:43:14

    CAPPIELLOThat's a huge thing. But we still use far more oil in this country on a daily basis than we produce. So we're not really close to energy independence when it comes to consumption of oil, even though this White House and this president has taken great strides in reducing consumption by improving fuel economy. But there is still, Diane, despite this oil boom going on in this country, I mean, come 2015, we're going to be the largest oil -- one of the largest oil producers in the world, if not the largest. We still use more than we produce. And we need it from somewhere.

  • 10:43:46

    WEISSYou know, it's important -- Dina made a good point. By 2019, it's predicted by the Department of Energy that our oil production in the U.S. will peak, and then we'll begin a slow, steady decline so that by 2040, we'll be producing about the same amount of oil domestically that we produced last year. Meanwhile, the Energy Department also says that our consumption will slow down from the rate that it's been in the past. But there'll still be at least a 5-million-barrel-a-day gap.

  • 10:44:15

    WEISSIf we're interested in reducing our dependence on oil, the most important way to do it is not through trying to get more supply, but trying to reduce demand, which the president has done through his new fuel economy standards. We need to invest in other alternatives as well.

  • 10:44:28

    REHMAnd, Nick, here's a question from Chris, who says, "What about the jobs at the refineries in Louisiana and Texas?"

  • 10:44:39

    LORISWell, they're likely going to see an increase in profit, because it's more efficient to refine the Canadian crude than it is the Venezuelan or to ship it over from the Middle East. So we may see some increase in refinery capacity expansion. We may see a newer refinery built in the next few years, if possible. But, you know, those refineries are largely operating already. It's just, this is going to increase their profit margin, which again isn't necessarily a bad thing, because our refineries operate on razor-thin profits.

  • 10:45:08

    REHMSo what you're saying is that they would not have to hire more employees at the refining end.

  • 10:45:16

    LORISI don't know for certain, but likely not because this is displacing other crude that's already being refined...

  • 10:45:21

    REHMI see.

  • 10:45:21

    LORIS...from Venezuela and other places.

  • 10:45:23

    REHMAll right. And here's another question. Why move the tar sands to the Gulf and not build refineries closer?

  • 10:45:35

    WEISSWell, the Canadians would still have a challenge -- if the refinery was in Alberta, they'd still have to move the product either to the West Coast, the East Coast or the Gulf Coast, to ship it overseas. And that's where this pipeline comes in. If this pipeline isn't built, they don't really have identified a way to move that same amount of oil. And one of the fundamental questions is, just because we can do something, does it mean we should do something?

  • 10:46:02

    WEISSYou know, they make, you know, the State Department announcement basically says: Somebody's going to move it. Somebody's going to buy it. So we might as well get it. But that's like saying, well, somebody's going to smuggle drugs into this country, so why bother trying to interdict drugs at the border?

  • 10:46:17

    REHMBut drugs are illegal.

  • 10:46:20

    WEISSWell, this...

  • 10:46:20

    REHMOil is not. But, yeah...

  • 10:46:21

    WEISSThat's true. But this is the dirtiest oil on the planet.

  • 10:46:23

    REHMOK. Go ahead, Dina.

  • 10:46:24

    CAPPIELLOThere's another point to make, is, you know, talk about a complicated process, try to get another refinery built in this country.

  • 10:46:30

    REHMYeah.

  • 10:46:30

    CAPPIELLONot easy from the environmental...

  • 10:46:32

    REHMRight, I'm sure.

  • 10:46:33

    CAPPIELLO...vantage point.

  • 10:46:34

    WEISSBut, you know what? It's much more expensive than a pipeline.

  • 10:46:35

    REHMAll right. To Lancaster, Penn. Hi there, Duke.

  • 10:46:40

    DUKEHow are you?

  • 10:46:41

    REHMFine, thanks.

  • 10:46:42

    DUKEGreat fan of the show. Always have such informative programs.

  • 10:46:46

    REHMI'm glad.

  • 10:46:48

    DUKEAnd I wanted to make comments about the -- just about the short-term viewpoint here that jobs are always touted, but, this particular instance, they're talking about 3,900 jobs for a year. And that's typically just -- a year is just so much less than even your typical boom and bust cycle. And I might add, to what benefit is all of this? Because it's still very murky about whether this is going to be exported so much overseas. And I wanted to just also get people to think about the underground aquifer. I'm no spring chicken, and I've been around a long time.

  • 10:47:34

    DUKEAnd they always say, OK, well this, you know, pipeline will be extra safe. But there's always accidents that happen. I have a background degree in geology. And I'm no expert. But I've talked to many geologists about this subject and they say -- many geologists say, you know, when we get six feet under the ground, don't really know what's happening. So, if they move this thing 10 miles away from the Ogallala Aquifer, there are underground streams and rivers and cracks and fissures.

  • 10:48:06

    DUKEAnd, if there is a spill, it doesn't take much oil or gasoline product -- oil is what's coming through the pipeline -- to poison this aquifer. They say, like, a couple of drops of oil can spoil a whole large body of water. So the fact of moving this 10 miles away is, I see, just a not a very viable solution. And that's it.

  • 10:48:34

    REHMAll right, sir. Thanks for calling. Nick.

  • 10:48:37

    LORISWell, I would beg to differ in that this is going to contaminate the Ogallala Aquifer. And I can't obviously say for sure because it's not operating. But at the same time, if you look at the Department of State's final environmental impact statement, they say it's highly, highly unlikely that, even if there were a spill in this area, that it would contaminate that water resource because of the geologic composition.

  • 10:48:57

    LORISAnd you've had a lot of geologists look at this both on the state and the federal level and through this independent party saying that, because of the composition of the soil, it would be very difficult and highly unlikely for that oil to migrate down to any water source.

  • 10:49:12

    REHMDina.

  • 10:49:12

    CAPPIELLOThere's always a risk of spills. And it's not going to be spill-less, right? I mean, it's hard to guarantee that, obviously, from any kind of vantage point. But, when they evaluated this in the EIS, they looked at what the spills historically in this country have been. And, in the last 10 years -- so January 2002 to July 2012 -- there was over 1,600 spills of crude oil from pipelines. The vast majority of those, 79 percent of them actually, were less than 50 barrels -- very small spills that we kind of don't hear about. These big spills that people talk about are pretty rare.

  • 10:49:50

    CAPPIELLOAnd then you have the other issue, I think that people kind of have to evaluate, which is that oil is going by rail. And everybody's kind of heard of the incidents that we've seen with rail. There was just a report out from the DOT that said that they're worried about a loss of life incident because of oil going by rail and the risks associated with it going by rail. So I think we kind of have to put this in context of the alternatives.

  • 10:50:15

    WEISSWell, Dina said that the average -- 80 percent of the spills were under 50 barrels. Well, 50 barrels of oil actually equals 2,000 gallons. And, in fact, there was a spill about that size in Marathon, Arkansas, a little bit less than a year ago, of heavy crude. And they're still cleaning it up. And people still can't use the drinking water. There was another heavy oil spill in a new pipeline in Michigan in 2010 over the Kalamazoo River. The company that owns it is still cleaning it up, and the cleanup costs have been $1 billion and counting.

  • 10:50:48

    REHMWho's paying?

  • 10:50:49

    WEISSThe company is Ambridge. And they're one of the companies that actually wants to build a pipeline from Alberta to the Canadian West Coast, that's currently being blocked by Canadians and their First Nations.

  • 10:51:01

    REHMSo Canada is blocking the construction of a pipeline across its own land. And they're pushing to construct this pipeline into the U.S. Something doesn't compute.

  • 10:51:19

    WEISSWell, it's important to note that people blocking the pipeline are Canadians...

  • 10:51:23

    REHMExactly.

  • 10:51:23

    WEISS...but they're not the Canadian government. The Canadian government wants to build the so-called Northern Gateway Pipeline from Alberta to the British Columbia Coast. And it's the people in British Columbia and the First Nations, which is the equivalent of our Native Americans, that are really up in arms about it.

  • 10:51:41

    CAPPIELLOI think what you're -- to get to your question, I think it's really a good one -- is that really what this is really about, too, is the path of least resistance. Right? And this is, I think, what Dan would talk about is that, you know, we are -- if we build this pipeline in the U.S. and Obama approves this, we are enabling this. Whereas, if we don't approve this pipeline, it's going to be much more difficult. And I think that's kind of where this debate hinges on, in heart.

  • 10:52:03

    REHMIt's going to be much more difficult for whom?

  • 10:52:07

    CAPPIELLOFor this company, for the Canadian government to get this tar sands produced.

  • 10:52:11

    REHMBut not for the U.S.

  • 10:52:14

    WEISSRight. And, in fact, I think Dina makes a great point, which is that, if the president denies the permit for this pipeline, this will be a game-changer, because he will send a signal to both domestically and internationally that just because we can do something doesn't mean we should do something if it's going to add a lot more pollution to the climate. And then he will have the moral authority to hopefully work with other countries and get them to make smarter decisions, too.

  • 10:52:39

    REHMI guess, you know, if Canadians themselves don't want the construction of a pipeline across their own land, why should the United States say, well, you go ahead and do it on our land, even though you've got a lot of people who live in that path who are saying, we don't want the pipeline.

  • 10:53:10

    LORISWell, I think there are a lot of people opposed to it, but there's also a lot of people in favor of it, too, not only just in Canada and in the United States. I mean, if you look at national polling, 56 percent are for this pipeline, while only 41 percent are opposed to it. And, again, when you look at how the environmental regulators work with these communities, I think they satisfied a lot of their needs.

  • 10:53:30

    REHMAnd you're listening to "The Diane Rehm Show." You make a good point, Nick, in that there have been ads on television showing George W. Bush, Bill Clinton, others, really supporting the construction of the pipeline. How do those ads affect people's thinking, Dan?

  • 10:53:53

    WEISSWell, it's my experience, and looking at the polling, is most people and most Americans don't really know much about this. To the extent they do, they've probably heard ads from the oil industry, because they have lots of money to spend on ads. One thing that Nick mentioned is that support for the pipeline in the U.S. is dropping, because that number, the 56 percent support, is about 10 percent lower than previous polls. In addition, opposition in Canada to the Keystone Pipeline is also increasing.

  • 10:54:19

    WEISSAgain, a majority in Canada still favor it, but the number of people that oppose it within their own nation has grown. You know, in the United States, a large amount of money can beat the popular will just about any time, depending on the issue. And this is a case where most average Americans don't really know much about this. They've got many other concerns. And, really, the president is going to have to take a look at the study that just came out, but also the standard for approving the permit is whether or not he finds it to be in the national interests.

  • 10:54:52

    REHMSo how much political pressure is there from both sides: the monied side with the oil companies, the environmental side.

  • 10:55:04

    CAPPIELLOAbsolutely huge. I mean, this is a huge political issue. You're not only talking about the oil industry here, who obviously has big money in the support of this pipeline, but you have huge Democratic supporters that are funding ads and don't want to see this pipeline. So for the president, he's really kind of caught in between these forces.

  • 10:55:24

    REHMBut does it break down on Republican/Democratic sides? No.

  • 10:55:28

    CAPPIELLONo. No.

  • 10:55:29

    REHMI wouldn't think so.

  • 10:55:30

    LORISYeah, and there's a lot of moderate Democrats who are in support of this pipeline.

  • 10:55:33

    REHMSure.

  • 10:55:33

    LORISIn fact, an amendment passed during the CR, where 60 Senators were in favor of the pipeline as well as, I believe, over 20 Democrats on the House side are in favor of this pipeline. So it doesn't necessarily do that. As well as, there's a lot of money and interest on the environmental community trying to stop this pipeline.

  • 10:55:50

    REHMBut not near as much as what the oil companies have.

  • 10:55:55

    LORISMaybe not, but, if you look at some of the billionaires that are against this pipeline -- you know, Tom Steyer is obviously -- is opposed to this pipeline. He ran a huge ad campaign that the Washington Post gave four Pinnochios because it was blatantly filled with lies. So I think there is a lot of money being spent in opposition, because it is such a divisive issue.

  • 10:56:11

    CAPPIELLOAnd some of these Democrats that are mentioned, I mean, they're up for re-election. And so this is going to kind of play into the mid-term elections a little bit. And also, not to discount, is Secretary Kerry, right? So here is the Secretary of State who has a very robust climate record. This is a huge issue for him. And so, already, even starting today, right -- a couple days after this came out, the attention and the pressure is turning to him. And they're saying, hey, you are a climate champion. What are you going to do about this pipeline?

  • 10:56:41

    REHMWhat do you predict, Dan?

  • 10:56:43

    WEISSWell, I don't like to make predictions that are broadcast, but I believe that the president and Secretary Kerry will look at all the facts and conclude that this is not in the national interest because of the huge potential for dramatic increase in carbon pollution. It's at least 6 million cars worth every year, plus more.

  • 10:57:02

    REHMWhat do you predict, Nick?

  • 10:57:03

    LORISI think he's going to give it the green light, given that the State Department said it would pose no significant harm or risk.

  • 10:57:08

    REHMAll right. And, Dina, do you want to weight in?

  • 10:57:10

    CAPPIELLOYou know that I'm not in the business of prediction, Diane.

  • 10:57:13

    REHMDina Cappiello of The Associated Press, Nick Loris at the Heritage Foundation, Dan Weiss at the Center for American Progress -- and you can bet we'll be watching this -- thanks, everybody.

  • 10:57:30

    WEISSThank you.

  • 10:57:30

    CAPPIELLOThanks, Diane.

  • 10:57:31

    LORISThank you, Diane.

  • 10:57:32

    REHMAnd thanks for listening, all. I'm Diane Rehm.

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