Published on May 28th, 2015 | by Tina Casey59
Yet Another Reason Why The Keystone XL Pipeline Is Toast
May 28th, 2015 by Tina Casey
Calling all Debbie Downers! Last week, while we were getting the inside scoop on Germany’s plethora of cutting-edge cleantech innovations, over at the global Business and Climate Summit in Paris it was business as usual. US Secretary of State John Kerry delivered a video message that was met with howls of protest from major fuel and petrochemical companies, which dug in their heels against his proposed carbon strategy. However, there was one bright spot, as Kerry offered up yet another hint that the controversial Keystone XL tar sands pipeline just ain’t gonna happen.
John Kerry’s Modest Proposal
It took us a while to track this down from news reports, but apparently the negative reaction was to Kerry’s announcement of the State Department’s 2015 Global Impact Economy Forum on clean energy investment, to be held this fall.
It’s a followup to the agency’s 2012 Global Impact Economy Forum, which was the launch of an ambitious program to leverage and coordinate “cutting-edge” financial instruments to accelerate clean energy investment as well as financial and social initiatives aimed at supporting US foreign policy. Here are a couple of snippets from the 2012 website:
Promoting the development of the Impact Economy is at the center of U.S. foreign policy objectives.
Further, the Secretary’s 21st Century Statecraft calls for us to reach beyond traditional state-to-state interactions and harness the assets and tools of business to strengthen our diplomatic efforts.
The 2015 Impact Economy Forum promises an even closer focus on clean energy and climate change, which does not bode well for legacy projects like the Keystone XL pipeline.
Announced during the closing session of the Business and Climate Summit, the 2015 event will serve as a showcase for clean energy investment success stories from US government agencies, presumably including the incredible Energy Department Loan Programs Office, among others.
The aim is to demonstrate the powerful resources that government has on hand to accelerate private sector investment, all with an eye to boosting the chances for a successful global climate accord in Paris this coming December.
Combine that ambitious goal with Kerry’s long-running history of environmental activism, and the future looks pretty gloomy for the Keystone pipeline (for those of you new to the topic, the pipeline would bring tar sands oil from Canada down through the midsection of the US, to the Gulf Coast).
Howls Of Protest!
If the reaction to Kerry’s video announcement is any indication, executives at TransCanada, the Keystone pipeline’s developer, must be getting the willies.
Bloomberg reports that during last week’s conference, “Europe’s biggest energy companies clashed with US Secretary of State John Kerry,” particularly Royal Dutch Shell and Statoil, along with the chemical company Novozymes and the utility RWE.
Then there’s The Financial Times, which described how the world’s largest exporter of power station coal insisted that only coal can meet global energy needs (no, really?), only to be countered by SkyPower CEO Kerry Adler, who pointed out that new storage technology is a game changer for supplying electricity to India and other emerging economies (SkyPower is a solar company, no surprise there).
The Guardian also offered up some juicy dish, with executives from Statoil confirming the fossil-energy-forever sentiments of other industry leaders. Meanwhile, Novozymes pushed the case for carbon pricing from another angle. Here’s CEO Peder Holk Nielsen cited in The Guardian:
…The oil companies will not help the world to switch to renewable energy – that will never happen. They are part of a system that protects the business they have. The only way the world gets more renewables is if bold politicians step up to it and mandate.
The point of contention is that Kerry’s fall forum basically skips over the whole carbon pricing strategy for cutting global emissions. It aims to bring a whole new crop of players to the energy investment table that are unencumbered by fossil assets, primarily by focusing on emissions targets rather than carbon pricing. That puts legacy fossil companies — and their investors — at a huge disadvantage.
Considering the years of failure to pursue renewable alternatives, stalling, pushback, and misinformation (we’re talking about you, ExxonMobil) churned up by the fossil industry, you could say the fossil companies have no-one to blame but themselves. The green business investment group Ceres, among others, has been warning about this sort of thing for a long time while offering investors clean energy alternatives.
The Writing On The Wall For Keystone XL Pipeline
We said the Keystone pipeline was toast a couple of years ago, but the writing has actually been on the wall since 2000, when Sheikh Ahmed Zaki Yamani, former oil minister of Saudi Arabia, issued this prescient observation:
Thirty years from now there will be a huge amount of oil – and no buyers. Oil will be left in the ground. The Stone Age came to an end, not because we had a lack of stones, and the oil age will come to an end not because we have a lack of oil.
Though there are a number of geopolitical reasons why the Saudi Kingdom has refused to cut production during the current oil price crash, industry observers are beginning to apply Occam’s Razor to the global oil glut, and some have hit on Yamani’s statement as the most simple reason: it’s better to sell low than not sell at all.
Meanwhile, as we pointed out earlier this year, Saudi Arabia has begun to crank up its renewable energy sector with considerable government support — precisely the kind of strategy that Kerry hopes to accelerate at the 2015 Global Impact Economy Forum.