Coal Kerry throws cold water on Keystone XL pipeline

Published on January 4th, 2014 | by Tina Casey


John Kerry Throws More Cold Water On Keystone XL Pipeline

January 4th, 2014 by  

The tubes have been buzzing over a new New York Times report on Secretary of State John Kerry’s aggressive pursuit of a new global climate agreement, which  has some clear implications for approval of the controversial Keystone XL tar sands oil pipeline. In a nutshell, things ain’t looking so good, and that has us wondering if the US coal industry is also going to face some serious problems down the road.

The Keystone XL pipeline requires White House approval because it crosses a US border. For those of you new to the topic, the Canada-based project will convey diluted bitumen (yes, that dilbit) down from Canadian tar sands oil fields (yes, that tar sands) through the US midsection to Gulf Coast refineries, destined for overseas markets.

However, tar sands oil is not the only fossil at stake here. As a fossil fuel export-enabling project, Keystone is a big, fat, square peg aimed at the round holes of Kerry’s global climate policymaking efforts. Now, think about that for a minute, and then take a look at what the New York Times article implies about that other square peg, coal exports from the US.

Kerry throws cold water on Keystone XL pipeline

Water by michitux.

Coal Is The Canary In The Coal Mine

The Times notes that in the absence of Congressional action on climate management, President Obama has focused on executive action. That includes, notably, a new EPA regulation that will eventually shut down the worst-polluting coal fired power plants in the US while preventing the construction of new ones.

That’s all well and good but we’ve frequently noted that as US coal consumption declines, US coal exports have gone up, so as a matter of global emissions the EPA action simply shifts the problem overseas.

This is where Kerry comes in. According to the Times, Kerry is looking ahead to the negotiation of a major climate pact in 2015, which means that coal-hungry China will be front and center.

Now let’s connect the dots. If the 2015 pact does happen, and if it sets some meaningful milestones for transitioning out of coal fired power production, the global market for US coal will start to dry up.

The key to Kerry’s success is US credibility on the subject of greenhouse gas management, which is certainly helped by the EPA action. Additionally, the Times notes that Kerry has established some important trust with his counterparts in China, having just brokered an agreement with that country for a joint phase-down of hydrofluorocarbon production.

Now take a look at that Keystone XL pipeline, and you can see how approval of the project would pull the rug out from under everything that Kerry has been working for. It puts the US in the position of aiding and abetting the introduction of more fossil fuel into the global market, while putting domestic safety and security at risk.

John Kerry And The Keystone XL Pipeline

Kerry has stated that he will not involve himself directly in the Keystone review process, which was well under way when he became Secretary of State. However, Keystone raises the kind of red flags that he has been pursuing over a decades-long record of climate action, one highlight being the 2007 publication of This Moment on Earth, a book on the power of individuals to change environmental policy.

More recently, one of Kerry’s first major speeches as new Secretary of State in 2013 was a real barn-burner, in which he outlined the economic benefits of an aggressive global policy to reduce greenhouse gas emissions, even if you imagine that there is no scientific consensus on the relationship between fossil fuels and global warming:

Well, the worst that can happen to you if you would employ a lot of people in alternative and renewable and clean energy; you would have less hospitalizations, cleaner air, more children with less asthma; and you would create an enormous number of jobs by moving to those new energy possibilities and policies and infrastructure. That’s the worst that can happen to you.

Having said all that, we’d be surprised as anybody if the Keystone XL pipeline does get approval. However, now might be a time to get your forks ready.

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About the Author

specializes in military and corporate sustainability, advanced technology, emerging materials, biofuels, and water and wastewater issues. Tina’s articles are reposted frequently on Reuters, Scientific American, and many other sites. Views expressed are her own. Follow her on Twitter @TinaMCasey and Google+.

  • TinaCasey

    Hi folks thanks for a lively discussion. Perhaps it would help to look at it from this perspective: just a few generations ago whale oil was an important fuel for the US and whaling was a major economic sector. Not so much any more…

    • Burnerjack

      Yes, changes occurred. The population could NEVER have been satisfied by whale oil, which, if I’m not mistaken, was used predominantly for street lamps and precision lubrication. Even if the population of whales were large enough, the advent of the automobile as the predominant transportation changed the entire scene.
      Your statement seems of little relevance, as the supply IS in fact “there”, the real issue, is the geopolitical ramifications of the power of “oil money”.
      The problem remains: How to satisfy the requirements of a burgeoning population. The TRUE answer is to limit population growth. The issue there is two-fold: Population growth is used as a political tool, as well as a global economy built on the promise of greater demand as the future unfolds.
      If I’m incorrect in my assertions, please respond. Always willing to entertain any alternative views, provided they are somewhat logical and genuine.

      • Burnerjack

        One final note: in my view, the ‘elephant in the room’ is methanol. this can EASILY be produced from any biowaste including sewage, garbage, etc. CHEAP,already available feedstock all around us, While detractors will jump at the “greenhouse gas” strength of methane, this is only true before it is burned,and it burns very, very clean.

        • Bob_Wallace

          Fine as far as it goes. But there’s not enough feedstock to replace all our petroleum use.

          We will need some liquid fuel for air travel, ocean freighting and a few other applications.

          If we can contain and release only the CO2 then we add no problems to our greenhouse cover. The carbon in the feedstock was already in the carbon cycle. We may be speeding up the cycle a small amount but at the same time we’re avoiding bringing more carbon to the surface.

      • Bob_Wallace

        Whale oil was widely used for home and business lighting. It was pushed off the market by cheaper “coal oil”. Which was pushed off the market by yet cheaper petroleum based lamp oil.

        Obviously there is some finite limit to how large a population the planet can support. And, obviously, the task of supplying everyone with everything they need would be easier with fewer people.

        It looks like we’re going to top out somewhere around 9 billion people. Up maybe 30% from where we are now.

        The US throws away about 40% of the food it produces. Africa loses about 50% of the food it produces due to poor transportation and storage problems. We use our food very inefficiently because we use so much to feed cattle. We’re already producing enough food for 9 billion and we have the potential to produce a lot more. Food production should not be a problem. (Distribution will be a problem we’ll have to solve.)

        We can give people all the electricity they need without a problem. We could power the world several times over with only wind or solar. Add in hydro, tidal, geothermal, biogas/mass and perhaps wave. We do need better storage solutions but we could do with pump-up hydro.

        Water is an issue and is becoming a bigger issue. I would guess that we are going to see migration from dryer to wetter areas increasing. There will be political/social problems, but not because there’s not enough water but not enough acceptance of “those people”.

        What else? Housing, transportation, clothing? We need to move to sustainable inputs which we can do.

  • Burnerjack

    Opposition to the Pipeline will do NOTHING to lessen oil demand. What WILL do is illuminate those opposed to US/Canadian financial/economic prosperity.

    • Bob_Wallace

      I agree with your first sentence. We’re stuck with oil until we give people better alternatives, which we are starting to do with EVs, PHEVs and improved public transportation.

      Tar sand oil might be the nastiest thing in the world. If blocking the pipeline cuts into tar sands profits and causes them to shut down sooner that would be a good thing. Not saying that blocking the pipeline would, just speculating without data.

      • Dennis Killian

        If there’s no pipeline then the oil comes by rail, as it’s starting to now, but a a higher cost.

      • Burnerjack

        My strong assumption is that blocking the Pipeline will reduce profits, but not enough to quell production, or there would be no production now. In the process, opposition denies a safer way to transport the product. If you care about the environment AND are realistic about how the world really does work, you would understand that the tar sands WILL be utilized, Pipeline or no Pipeline. If that is the case, the next best thing is to make that production and transport as environmentally safe as possible.
        Yeah, no production would be safer still, but that is obviously off the table. Denial of that is to deny reality.

        • Burnerjack

          One question to you: “Which alternative/renewable energy source will be acceptable for large scale deployment?” So far, EVERY ALTERNATIVE HAS BEEN MET WITH STERN OPPOSITION from so called “Environmentalists”. If these opposition groups were TRULY “Environmentalists”, this would be beyond ironic! They seem more like “Anti-prosperity” groups to me. What other conclusion could there be?

          • Bob_Wallace

            Cut the all caps stuff, please.

            I really don’t understand your question. We are installing wind and solar in very large amounts. We’re now getting 5% of our electricity from wind and solar. That is not tiny. And annual installation rates are increasing.
            There are a few NIMBY folks who disguise themselves as environmentalsts and attempt to block installations in their neighborhoods. And there are a few environmentalists who aren’t thinking very clearly, they want to protect <1% of the desert from renewables when 100% of the desert is endangered by climate change.

            Overall, these people are nothing more than noise in the system. They will prevent or slow a project from time to time but they aren't slowing progress enough to matter.

        • Bob_Wallace

          Personally, I’m not getting worked up about the pipeline one way or another. We’ll continue to burn oil until we move off oil.

          • Burnerjack

            You, me and just about everybody else too. Begs the question : If we’re going to move off of oil, What will we substitute? It would appear that the obvious answer is a NatGas/ electric economy. With that said, I’m reminded of the outrage over fracking. So what will the answer be that won’t enrage some group or other, driving up litigation costs, etc. For me, I think Geothermal can and should be the answer. While not perfect, it is one source so ubiquitous that, theoretically, the source can always be close to the demand, negating additional transmission infrastructure.
            Alas, this too has it’s detractors. alleging causing earthquakes, etc…. Fusion, thus far, is a growth industry for government fed theoretical physicists, and not much else.
            Too bad the complainers are just that and not solution contributors. Still looking for the answer that satisfies most…

          • Bob_Wallace

            I’ll say with about 95% confidence, we’ll move to electricity for personal transportation. The only thing holding us back is battery capacity/cost.
            Right now Tesla is producing an EV with a >200 mile range. You can get a 90% recharge in about 30 minutes. Figuring that you’re going to stop to eat/pee/whatever on a long trip anyway and would have to stop once for gas in an ICEV, the total time to destination will be just about the same.
            Driving with electricity costs 1/3rd or less per mile in an EV compared to a 50 MPG hybrid using $3.50/gallon fuel.

            We get 200 mile ranges by packing in a bunch of batteries like Tesla has done or by developing higher capacity batteries, which seems to be happening.

            Producing the electricity is no problem. Onshore wind blows heaviest at night when demand is lowest for electricity. Perfect time to charge EVs. Or put solar panels on your roof and charge where you park during the day.

            13,000 miles (avg US) / 365 days = 35.6 miles a day.

            35.6 miles * 0.3 kWh per mile = 10.7 kWh per day.

            10.7 kWh per day / 4.5 solar hours per day (mid-America) = 2.4 kW of panels on your roof to power your car for the next 40+ years.

            Make it 3k to account for charging loss and performance drop in the panels over four decades. Germany, the UK and Australia are installing for about $2/watt (no subsidies). We’ll get our prices down there.

            3k solar system @ $2/watt = $6,000.

            $6,000 / 40 years / 12 months = $12.50 per month to drive 13k a year. And that $12.50 is fixed, does not go up with inflation, over the 40 year period.

            ($75.80 per year with a 50 MPG hybrid and $3.50/gallon fuel. And increasing with inflation.)

            So, we’re really close to affordable practical (200 mile range) EVs and we can power them for next to nothing. That’s where I think we’re heading and why we’ll abandon oil in the not too distant future. I’d say 5 to 10 years to give us affordable 200 mile range EVs, another 5 to 10 years for new car purchases to be mostly EVs and another 10 years to wear out the existing ICEV fleet. Oil mostly gone in 20 to 30 years.

          • Pieter Siegers

            Oil will only be abandoned when there’s a viable commercial substitute. So in the end we as consumers have the power to change that. Let’s hope the people will awake on time and stop buying products that use oil or other fossil fuels. Only then the vested interests will have no other choice to move to renewables. The real question is will that happen shortly?

          • Bob_Wallace

            I think it will happen soon. But that’s just my guess.

            I’m seeing scuttlebutt that EV battery prices may have dropped very significantly over the last couple of years. If that’s true we could be looking at an affordable (<$30k) 200 mile range car and a very affordable (<$20k) 100 mile range 'city car' in the next few years.

            At the same time there has been a steady stream of new battery technology coming out of labs. Some of that is likely to lead to better battery capacity.

          • postwick

            How much fossil fuel do you suppose was used to make that computer you’re posting from, as well as generate the electricity you’re using to power it?

            Welcome to America, the land of “everyone else should sacrifice, but not me.”

          • Pieter Siegers

            I’m aware of that. At least I can use clean energy to power it. I know I have internet access probably coal powered… but at least I can spread the word on how we should be doing better instead of doing nothing, that would be worse.

            I’d be glad if only America had that attitude… I’d say welcome to the planet is more like it.

            I’m convinced it’s the people’s attitude that must change, then companies will (have to) follow. I’m not talking revolution, but a quick conscious evolution of our current damaging life-style.

          • Pieter Siegers

            Even worse, the K XL pipeline is only being used as a distraction for the real plans of the vested interests.

            The same is or was happening when Gazprom ordered the Russian government to jail the 28 Greenpeace activists. They (Gazprom) won at least 3 months to continue their plans without interruption. The first oil is already flowing from the Arctic.

          • Bob_Wallace

            Oil is going to get pumped, refined and burned until we eliminate the need.
            We can’t stop the supply. We’d need an immense army to fight all the oil producing countries.

            And we’d need even more armies to fight off all the people wanting to use oil.

            We can’t stop the production and consumption of heroin and cocaine. They’re minuscule demand issues compared to oil.

            Best hope is to minimize demand with efficiency as we replace ICEVs with electrics. Put our energy into speeding the transition rather than fighting battles we can’t win.

            We’re starting to see success in lowering fossil fuel use for electricity. Renewables are cutting demand for fossil fuels. Follow that path.

  • Tuebor

    The White House doesn’t have to approve Keystone, State Department does. Small point, I know.

    • Bob_Wallace

      State works for the White House.

      A major decision like this one will be discussed in the Oval Office.

      • Tuebor

        I’m sure it will. I mentioned that because most presidential permits are signed by an undersecretary of State. State seems to have indicated that approving it will not stop its effect on GHG, if any, because the oil will be processed somewhere else anyway. They would really have to twist their previous environmental assessment to decide against it on that basis. If State approves, other agencies (EPA) can object in the following 15 days, and that’s when the president steps in and makes a decision. That might be his way out.

  • Verific

    To take US coal out of the ground, rail it to a US port, and then export it, meanwhile compensating the US tax payer a few dollars per ton, is utter insanity if we are serious about reducing global CO2 emissions.

    • Dennis Killian

      So why do you want Canadian oil to go to overseas refineries that will add more pollution then if it’s refined here ?

      • Verific

        Huh ?

      • Moreboomplease

        It won’t go to overseas refineries. It will provide cheaper raw material for US refineries. Some of the refined products may continue to be exported. Some even back to Canada.

      • Moreboomplease

        Sorry, I misunderstood your comment. I thought you were echoing the false sentiment held by some enviros that KXL would transport to the gulf coast where the crude would be exported. You were, of course, referring to alternate pipelines like Northern Gateway and the Trans Mountain Expansion which would make oil available to the Far East from the western coast.

        • flubalubaful

          Excuse me i think you are a bit misguided here, the xl pipeline is supposed to be transferring Canadian oil to the gulf so that it can be exported, there is absolutely no benefit to the US not even any tax income this is all about putting in a pipeline from Canada to the gulf and having the problem of any contamination repaired using US taxpayers money or any losses due to leakage born by the property owners that are affected. remember the type of oil being transported is not regular oil it is very corrosive and has small particles in it that will eventually cause the pipeline to leak a lot.

          • Burnerjack

            Where would the Labor and materials come from? Would there be any “transport toll” fees? Or would the US let this “black gold run through the country for free?
            If anyone is misguided, its you. May be not misguided, possible agenda then? C’mon tell the truth….

          • Moreboomplease

            Excuse me I think you are a bit misguided here. There are so many good economic reasons to approve this line.
            The purpose of this line is to transport Canadian and Bakken crude to gulf coast refineries. There it will provide cheaper feedstocks and help increase refiners’ returns and safeguard refinery jobs that could be threatened by cuts from heavy crude producers such as Mexico (where production is declining) and Venezuela (who may divert production to China for political reasons). And secure light oil supplies that may be threatened in other ways if they come from the Persian Gulf. The plants that will refine this oil will provide wealth to US companies and citizens in the same way as other companies that take cheaper imported inputs and sell finished goods, occasionally abroad. Such as Boeing which uses produces aircraft and exports some. The bauxite for the aluminum and sometimes the aluminum itself is imported but I never hear people complain about it, saying that the raw material is imported so therefore you shouldn’t export the finished product. Singapore gets its wealth from importing raw materials and exporting finished goods. Why shouldn’t US companies be able to do likewise? And why import from Saudi Arabia rather than Canada?
            US companies and workers benefit from the expansion of the Canadian industry to fill the line. Investments and operations result in $.89 spent by Canadian oil producers in the US for every dollar of crude they send south. US companies are welcome to operate in Canada, unlike in Mexico and SA where the production is done by state owned enterprises. Or Venezuela where it is shared by the government. About 60 thousand US citizens work in Calgary, mostly in the oil industry. Each barrel per day of production to fill this line will cost in the range of $80 thousand in capital investment. US companies will provide a lot of this and profit accordingly. I understand that profit might be a dirty word for some people. I won’t apologize for using it.
            Canadian oil production and exports don’t have to be protected by the US military. The Gov of Montana said he never has had to send Montanans to protect Canadian oil imports in his support of the line. What does it cost to protect oil coming out of the Persian Gulf? I’ve read of between $50 and $150/bbl. And calculated it at $55.
            Along the line, local communities will benefit from the operation. Montana estimated $63 million of property taxes will be collected yearly by counties plus $17 million for the state wide education fund. That $80 million would provide the equivalent of 2000 jobs at the Montana average. McCone County will collect close to $10 thousand per capita in taxes. That would build a lot of roads and libraries.
            I could go on but thanks if you read this far.

          • Dennis Killian

            This site for some reason gives me fits trying to post here. But what you said is exactly right. How some people cannot see it amazes me.
            Verific goes from site to site and spreads lies.

          • Bob_Wallace

            I quit reading early on and only picked back up at your last sentence.
            Learn to use paragraphs.

          • Dennis Killian

            Oh no, not the grammer nazis. LOL Everytime I try to make a paragraph on this site it wont let me type any more. But I don’t know if that’s on my end or the site, but I don’t have the problem on most sites.

          • Bob_Wallace

            This site or all Disqus sites?

            Sometimes Disqus gets screwy and messes up post but I haven’t run into problems with inserting line breaks.

            Try reloading the page?

            (I find it very difficult to read run on paragraphs. My eyes start to glaze over.)

          • Pieter Siegers

            Most of the time it is firewalls that cause this type of troubles.

  • Moreboomplease

    If the line isn’t built across the border it could still go as far as the Bakken on ramp at Baker and be railed down from Alberta. Only slightly more costly than pipe all the way.

    • Verific

      There is plenty of oil in the Bakken, and we are having a hard time getting it out of there.

      No need to insert another 830,000 bpd of imported crude into that area.

      • Moreboomplease

        KXL will transport up to 300 kbpd of Bakken oil to Steele City and beyond from the Baker on ramp facility. The purpose of KXL is not to terminate ‘into that area’.

        • Tuebor

          300 Mbl is a bit optimistic. TransCanada says 100 Mbl.

          • Moreboomplease

            Hi. Tuebor. Investor relations told me capacity would allow 300 kbpd. Hence my ‘up to 300 kbpd’. But current expectations (pending a crossborder approval) are 100-200 kbpd. However, if bitumen had to be railed across the border the 300 kbpd would come into play with the 40 degree Bakken being used to further dilute the 15 degree railbit to achieve a 21 degree product for piping further south.

          • Tuebor

            Okay, that makes sense.

  • NZDavid

    The pipeline from Cushing to the Gulf exists now, and dilbit is traveling by train across the border so it does not really matter so much now as two or three years ago.

    The Balkan oil fields could have benefited from the northern section of the pipeline but they too travel by train. So at the end of the day it’s pretty much political theater, unless you are Warren Buffet with railroads in your ownership!

    • Verific

      Why are you so much in favor of this pipeline that will IMPORT (from Canada) another 830,000 bpd into an area that is currently already saturated by our DOMESTIC oil production ?

      • Dennis Killian

        Because we are importing higher priced oil from overseas, and adding that lower priced oil to our supply will lower prices.

        • brink

          no it wont

          • Moreboomplease

            Western Canada Select is trading at US$20 under West Texas as of Friday. It has ranged from $12-42 under during the past year. How could that product no drop prices wherever it is allowed to compete?

      • Tuebor

        Keystone would bring more heavy sour to the Gulf Coast where a higher percentage of the refiners can process it. Problem is, a lot of that capacity is already served by long term contracts. North Dakota oil is much lighter and cannot find a home on the Gulf where it also competes with light from Eagle Ford and Permian. Thus, it’s getting shipped to coastal refiners by rail where it can compete with imported light grades, even with higher rail transportation costs.

        • dk504

          The kind of oil being shipped to the Gulf is being loaded on to tankers and being shipped to China and other countries. We do onto use this crap oil, for any purpose, not even heating. If this is such a deal/steal for Canada, what didn’t they build the pipeline across their country to ship overseas instead of destroying our country?

          They want to ship to China, it’s a damn bit faster from Canada than Port Fouchon, La. or from Houston, Tx. Just saying’.

      • NZDavid

        I am neither for nor against, I just do not see supply increasing by 830,000 bpd, rather it will cause a transfer of most of this from rail to KXL. At the end of the day, the dilbit will either be processed by refineries on the Gulf capable of handling heavy sour, or exported to China to be processed in their new refineries for handling the same.

    • Tuebor

      Current rail/pipeline takeaway ratio from the region is 60/40. KXL would only accommodate about 10% of Bakken production, so rail is going to continue to serve Bakken producer for the foreseeable future.

      • NZDavid

        I agree, rail will remain the preferred method for transport from the Bakken.

  • Ross

    Kerry seems convinced by his own arguments so let’s see him and his boss take action consistent with them.

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