EARLY LAST WEEK, as the Obama administration prepared to announce a delay in deciding whether to permit the construction of the Canada-U.S. Keystone XL oil pipeline, Joe Oliver, Canada’s natural resources minister, was in Asia to discuss cooperation with the energy-hungry and cash-flush Chinese on extracting his nation’s oil reserves. Given that China already has an $11 billion stake in Canadian oil production, Mr. Oliver should have little trouble getting the help.
Despite the passion among environmentalists against Keystone XL, Mr. Oliver’s travels illustrate the critical point: Canada’s oil will come out of the ground, and someone somewhere will refine it and burn it.
Even under optimistic assumptions about greening the world economy, the United States and every other nation will demand immense amounts of oil for decades. The resulting upward pressure on oil prices provides a massive incentive to develop previously unattractive oil deposits, such as those in Alberta’s tar sands. Nixing a pipeline that would bring more of that oil to U.S. refineries wouldn’t cut that demand, it wouldn’t shut down Canadian production, and it wouldn’t make any difference to global carbon emissions.
Environmentalists and Nebraska officials also object to the pipeline’s proposed location, warning of spills in the state’s ecologically sensitive Sand Hills region. The State Department insists that objections from Nebraska, including those made during a special session of the state legislature, persuaded federal officials to examine routes that avoid the Sand Hills, even though a government report already considered the economic and environmental impacts of many alternatives. Conveniently for the White House, that reexamination pushes the final decision on Keystone XL past the 2012 elections.
Environmentalists can continue to exert political pressure, and Nebraskans can try to move the risks elsewhere, but neither can eliminate the threat of spills. Rejecting the pipeline and forcing the Canadians to send more of their oil west for shipping could increase the risk, in fact, since the oil would travel by pipeline, train, truck or barge, then onto tankers and across an ocean.
The United States must reduce its dependence on fossil fuels, from any source, and it should encourage nations such as China to lower the carbon intensity of their economies, too. Even if that happens, though, the world will continue to use oil, with all the dirty realities that entails. Rejecting Keystone XL would not change that fact. But it would help China lock up more of the world’s oil production, cost infrastructure jobs in the United States and offend a reliable ally. More delay after three years of review is insult enough.