Such A Deal: New Pipelines for Tar Sands Oil Bad for the Environment And Will Raise Gas Prices

Sep 4, 2013 by  | Bio |  Leave a Comment

Anyone who follows CLF’s work knows about plans being pushed to move oil derived from tar sands in Canada through pipelines that would cut across Vermont, New Hampshire and Maine.  The purpose of the these pipelines is simple and clear: to allow this oil to reach the sea and foreign markets that can only be reached by oil tanker.

It is easy to understand why the Canadian oil industry, and the multi-national petroleum companies with big Canadian investments, want to move the oil extracted from the Tar Sands of Western Canada out to the larger world markets: doing so will mean they make A LOT of money.  The Canadian petroleum industry has explained this for us all very helpfully in an ad found on page 2 of the June-July 2013 issue of the Canadian Public Policy and Politics magazine with the zippy name of “Policy” that we reprint here.

The ad confirms the tar-sands-oilpurpose of the wave of pipeline building being pushed by the Canadian petroleum industry (and ExxonMobil and Koch Industries, the owners of leading Canadian companies like Imperial Oil/Esso and Flint Hills Resources): to raise the price of Canadian oil up to the levels found on many global markets.  As the ad shows, using little prices tags, the price of oil in the North American market hovers around $85 a barrel at times when the same barrel of oil sells for $110 elsewhere in the world. If the producers, refiners and sellers of that oil have access to world markets they can demand that North American customers pay them the higher price if they want to buy this oil.  This reality is especially stark when you look at the fact that oil refining companies with operations in the United States just don’t care if these pipelines get built – they are fully occupied with oil extracted right here at home.  It is just Canadian companies (and the multi-national companies like ExxonMobil and Koch who own Canadian operations) who profit from the push for these pipelines.

So we know who wins if new pipelines carry Canadian oil to reach global markets: the petroleum companies who reap the higher prices found beyond the United States and Canada. But who loses?

The answer to that requires us to think both about the short-term in which we all live our day-to-day lives and the longer-term world in which future generations will have to live.

When we think about immediate and short-term concerns for our families and businesses it doesn’t get any more real than gasoline prices.

Supporters of building pipelines to move Canadian oil to market generally and the highest profile project, the Keystone XL pipeline that would move oil through the middle of the United States from Canada to the Gulf Coast, invoke gas prices as a reason for taking that step, at least implying that the new pipelines will drive down gas prices.

However,  it is well documented in a number of reports and studies that Midwestern drivers would see gasoline prices rise on the order of 42 cents a gallon if that pipeline is built. And this is not surprising – if the oil used to make gasoline is being sold (and bought) at higher prices then gasoline prices will rise.

So in the short term – the losers in this equation? Anyone who buys gasoline or relies upon goods or services that rely on gasoline or diesel fuel that are transported by car, truck, ship or airplane – in short all of us.

And that doesn’t even get into the critical longer term issue: that tapping into the tar sands oil, bringing them to market and burning them would be a large step towards the devastating climate disaster that is unfolding around us and that we need to stop.

There are those who disagree with this assessment. Some politicians argue that tar sands oil from Canada is needed to free ourselves from dependence on oil imported from volatile (and often hostile) nations overseas.  They suggest that these pipelines will simply bring it that oil to markets we, here in the U.S., draw upon, oddly ignoring the stated purpose of the pipelines to bring the oil to higher-priced offshore markets.

And there are thoughtful and detailed analyses that disagree with the climate argument about this oil.  This analysis argues that if the tar sands oil is not brought to market that it will simply be replaced by slightly-easier-to-access Venezuelan oil with a very similar carbon footprint.

That climate impact analysis, and the political argument for building pipelines to tap into tar sands oil, however ignore one important, essential and difficult option: use less oil instead. The advent of electric vehicles, smarter urban development and increases in transit use all converge to show us a way forward and off of oil. The increase in fuel economy standards, a process that is well underway, is a step on that path.

Getting off oil will not be easy.  As the social critic, songwriter and bicycle enthusiast David Byrne has noted, “From the age of the Dinosaurs, cars have run on gasoline.”  Changing something so fundamental will be hard but it is what we need to do; that is what in all of our interests, not laying new pipelines to bring ancient oil derived from the cracking and boiling of tar sands to foreign markets where it will be burned and released into the atmosphere.



Crude Politics

Jun 8, 2011 by  | Bio |  Leave a Comment

With gas prices hovering around $4 a gallon, many New Englanders are rightfully asking why we’re paying so much at the pump. Many economists will point to price speculation and other factors such as political unrest and conflicts in oil producing nations. Oil industry reps have been claiming that high prices are due to all that clean air we use and all those required practices that help keep workers safe. They seem to think our leaders in congress should reduce environmental regulations put in place after the BP oil spill.

The fact of the matter is that domestic production has little to do with the price of oil, which is set on the world market.  In fact last year US oil production reached its highest levels since 2003.

David Koch — a billionaire oilman widely known for funding campaigns to discredit climate science and oppose the construction of clean, renewable wind energy projects—has launched a new campaign through his group “Americans for Prosperity” to convince us that environmental regulations are to blame for high gas prices. Furthermore, they are looking to target political leaders who support tougher safety and environmental reviews for the oil industry that could prevent another catastrophic spill, and the clean energy sources that could break our addiction to their oil.

While most serious economists will tell you that the conflict in Libya, and soaring demand for gas in emerging economies such as China are the key factors driving energy prices up, most serious economists don’t have billions of dollars to spend on massive PR campaigns and secret political donations. As mentioned in this story the Koch brothers are betting that their ad campaigns and political donations will be enough to convince our leaders in congress to ignore real solutions and instead weaken environmental regulations.

Unfortunately, we’re seeing signs that their campaign is working.  As I wrote last week, the US House of Representatives recently passed three bills that would have required massively expanded offshore drilling all around the country, including in New England.  Thankfully, the Senate voted down a similar measure, but oil industry supporters have vowed to keep up the fight. Unfortunately when faced with a decision between big oil and New Englanders who depend on a healthy ocean, Massachusetts Senator Scott Brown sided with big oil. Click here to hear the radio ads CLF is running across the state, and here to write Senator Brown to urge him to stand with us in opposition to expanded drilling and for real solutions to high gas prices.

Connecting the dots of denial

Sep 7, 2010 by  | Bio |  4 Comment »

(Updated 9/15/2010)

In a recent issue of the New Yorker staff writer Jane Meyer leads us all on a guided tour of the machinery, machinations and massive expenditures that the billionaire Koch brothers have poured into organizations like the Orwellian named “Americans for Prosperity” that, among other things, are dedicated to stopping progress in the war to protect our climate.

Not satisfied with having played a role in derailing (hopefully temporarily) sensible energy and climate policy in Washington DC these guardians of fossil fuel industry profits are seeking to halt good efforts in the states.  While their efforts in California have been the most noticed they are also busy laying astroturf in places like New Jersey where a “campaign” to roll back the mild, moderate and successful Regional Greenhouse Gas Initiative has been launched out of the corporate checkbooks supporting “Americans for Prosperity.”

This effort in New Jersey angrily rails that there is no clear line on electricity bills to show the price that consumers are paying for RGGI – ignoring the reality that there is not a bit of evidence that such a cost can be identified by anyone.  Indeed, the RGGI program is so mild and moderate that, as was anticipated when the program was created, the impact on consumers is so small that it is in fact invisible.   The fact that the New Jersey “anti cap and trade” website fails to actually describe a price impact for RGGI before ranting about the need to disclose such a cost is a clear signal that we are dealing with folks who are not playing straight.

And to add yet another bizarre twist to the tale, the Albany Times-Union reports that the company owned by the same Koch brothers who founded and have funded the organization protesting RGGI has been participating in the RGGI auction, presumably for profit and not just fun.

While David and Charles Koch, as detailed in the New Yorker article,  have focused their spending on nurturing “Americans for Prosperity” and similar national efforts their brother William Koch has been focused on local denial – heavily funding lobbying against the Cape Wind project which he apparently feels would damage the view from his vacation home.  But the Koch agendas are now converging as “Americans for Prosperity” levels a volley at an effort by the governor of New Jersey, a Republican who is generally regarded as conservative, for using RGGI funds to support offshore wind farm development.   Perhaps this is a result of the reconciliation between these brothers now that they have settled their infamous feud.

Ultimately, though this is about people who have made a lot of money from the current system of generating energy from fossil fuels fighting the future.  Not only are they tossing all of us, including their own families, under the bus of a dangerously changing climate but they are fighting against efforts like wind farms that generate stability in energy prices (something their fossil products simply can’t deliver) and programs like energy efficiency investments that generate real jobs and prosperity.  For example, the operator of the efficiency programs in New York State estimates, in their annual plan, that the programs funded by RGGI in that one state will create:

  • Customer energy bill savings of more than $445 million
  • 1.7 million barrel reduction in oil imports
  • Creation or retention of approximately 1,400 jobs
  • Greenhouse gas emissions reductions up to 2.0 million tons; equal to removing approximately16,500 cars from the road

Saving people money on energy bills and creating jobs – what a nightmare !!!