Hillary Clinton opposes Keystone XL, but is it already dead?
While Keystone remains a big issue for environmentalists and politicians, it may no longer be of much interest to energy companies, experts say.
While Keystone remains a big issue for environmentalists and politicians, it may no longer be of much interest to energy companies, experts say.
After pressure to take a firm position on the Keystone pipeline, Hillary Clinton finally declared Tuesday that she doesn鈥檛 think the pipeline should be built. But it鈥檚 possible that energy companies won鈥檛 want it built now, either.
While Keystone remains a big issue for environmentalists and politicians, it may no longer be of much interest to energy companies, experts say. The reason: sinking oil prices.
The state of oil prices has damaged the economic viability of the pipeline, making it easier to oppose politically, says Edward Parson, co-director of the Emmett Institute on Climate Change and the Environment at the University of California, Los Angeles, School of Law.
鈥淲hile Keystone has always attracted political and ideological attention far greater than its actual concrete significance,鈥� he says, 鈥渋n terms of people actually wanting to build it ... support has to have diminished because of collapsing oil prices.鈥�
In general, high oil prices result from high demand, and they encourage energy companies to invest more in infrastructure to extract the fuel and get it to market. On the other hand, low oil prices mean low demand and few incentives to invest in infrastructure.
Oil prices have been sinking since mid-2014. If prices stay low, it 鈥渃ould mark the beginning of a long-term drop in upstream investment,鈥� the US Energy Information Administration said Wednesday.
鈥淚t鈥檚 not clear there are investors or businesses that are on fire about [approving Keystone],鈥� Professor Parson says. 鈥淚t鈥檚 just a less important deal for them in a world of cheap oil.鈥�
Michael Levi, a senior fellow at the Council on Foreign Relations, expressed a similar view in January. 鈥淭here鈥檚 an outside chance that, if prices are sustained at an extremely low level, the Keystone XL pipeline won鈥檛 get built,鈥� he wrote. 鈥淜eystone XL, like any oil production project, is less compelling when prices are lower.鈥�
TransCanada, which proposed the Keystone project in 2008, indicated Tuesday that it remains committed to the plans. 鈥淥ur focus remains on securing a permit to build Keystone XL,鈥� the company said in a blog post.
Last year, TransCanada estimated the Keystone project to cost $8 billion, Bloomberg reported.
Mrs. Clinton, a Democratic presidential candidate, went on the record with her position Tuesday by telling The Des Moines Register editorial board. But while she cleared up that specific question, she has echoed energy analysts in questioning the larger importance of the pipeline.
She elaborated on these thoughts in an essay published by Medium on Wednesday afternoon.
鈥淔or too long, the Keystone XL pipeline has been a distraction from the real challenges facing our energy sector ...,鈥� she wrote. 鈥淏uilding a clean, secure, and affordable North American energy future is bigger than Keystone XL or any other single project. That鈥檚 what I will focus on as president.鈥�
Specifics of how she would achieve that remain unclear, however.
Her essay proposes a few new policies, including forging a 鈥淣orth American Climate Compact鈥� with Mexico and Canada to set strong carbon emissions reduction targets and investing in pipeline safety and electrical grid security. In July, she unveiled a plan to install more than 1 billion solar panels on US homes by 2020.
Some commentators are viewing Clinton鈥檚 opposition to Keystone as the ticking of an ideological box. In The Washington Post, editorial writer Stephen Stromberg said that environmentalist opposition to Keystone has been 鈥渇ierce but misdirected,鈥� and 鈥渁 massive misallocation of time and passion that Clinton has now indulged.鈥�
鈥淐linton鈥檚 argument seems to be that activists have made Keystone XL into a symbolic test of the US commitment to battling climate change, one that the country must deal with before moving onto policy that might make much more of a difference,鈥� he added.
According to a 2013 article in The Atlantic, canceling the Keystone pipeline would save at most 180 million tons of carbon dioxide per year. By comparison, the Clean Power Plan, when it is fully in place, will reduce CO2 emissions from the power sector by 870 million tons a year, according to the Environmental Protection Agency.