The Sad Reason Keystone XL Doesn’t Matter

The Kelly Letter Excerpt
The following is from this year’s Note 5 of The Kelly Letter, which went out to subscribers last Sunday morning.

The State Department on Friday released a final environmental study of the Keystone XL pipeline that increased the odds of the Obama administration approving it, providing pro-environment former Obama backers with yet another reason to regret sending him to Washington.

The study concluded that the pipeline would not materially exacerbate climate change because it will simply move fossil fuel that would end up being moved by some other means anyway. If the fuel doesn’t move through the pipe, it will move by rail or highway. Stopping the pipeline is not synonymous with lessening climate pressures, because it will neither boost demand for fossil fuel nor encourage production. It will merely transport product already being produced to meet already rising demand.

The report also said the project will not create a meaningful number of jobs. Following some 40,000 jobs during the two-year construction phase, the pipeline will offer a mere 35 permanent positions.

Those for and against the pipeline reacted along their usual lines. Tar sand backers in Canada and pro-oil lawmakers in the US rejoiced. Environmental groups ignored the findings of the study and reiterated that the pipeline will worsen the planet’s carbon pollution issue.

Congressman Raul Grijalva (D-AZ) called the study a “sham” and said it “featured multiple documented conflicts of interest, corporate failure to disclose relevant business ties, and a State Department more interested in greasing the skids than doing due diligence. We thought we’d seen the last of this in the George W. Bush era, when profits came before science and wealthy corporate interests called all the shots.”

TransCanada CEO Russ Girling retorted that opponents are grasping at straws regardless of the evidence on the table. “No matter how much noise they make or how much misinformation they spread, the science does support this project.”

It’s not so much the science as the reality of global politics that supports the project. Science says fossil fuel usage is changing the climate. Global politics says, “So what?” Canada is committed to extracting its tar sand crude and getting it to market one way or another. The real disappointment to environmentalists should not be that this one pipeline will likely get approved, but that momentum across the board is for more fossil fuel production and consumption. The problem is not just Keystone XL.

Both sides missing the point is the most disheartening aspect of Friday’s report and reaction. The State Department did not say that fossil fuel does no harm to the environment, so pro-pipeline groups should take a moment to realize that their industry may not cause more damage to the climate due to the pipeline, but no less, either. Environmentalists should face facts that whether this one pipeline happens or not is beside the depressing point that the climate is a goner regardless. Essentially, the State Department said, “The climate is cooked one way or another. All we’re discussing is how to get the cooking fuel from the ground into the air.”

The science referred to by Grijalva wasn’t the science of the pipeline per se, but rather the bigger picture science around what fossil fuel is doing to the planet, and there’s little doubt that corporate interests continue calling the shots in that department. Too bad they always will. Too cynical? Just look at how meaningless hope and change turned out to be, on all fronts.

Yours truly,
Jason Kelly
Sign up to read the rest of this letter and all back letters, and receive future letters the moment they’re sent.

This entry was posted in Kelly Letter Excerpt and tagged , . Bookmark the permalink. Both comments and trackbacks are currently closed.

One Comment

  1. Tuco
    Posted May 7, 2014 at 6:34 pm | Permalink

    Hey Smart Guy… Google “fossil fuels”… you will most likely be surprised that they also include COAL… a far bigger threat to the environment.

  • The Kelly Letter
    A Complete Investment Management System
    The Kelly Letter  every Sunday morning by email.
    Like no other. Many subscribers say this is the best read of their week, astonishing in its ability to distill seven days of noise into one succinct overview of the very few items that might matter. Start your Sundays right!
    A one-page Quick Start Guide
    with page number references to full information in The 3% Signal. You'll receive access to this right away so you can begin transforming your portfolio into a performance machine immediately.
    The 3Sig Calculator.
    A thing of beauty! You'll use it to generate your own personal signals every quarter including exact share amounts to buy and sell based on your account balances. It emails you the results to make later quarters easy by keeping last quarter's numbers at your fingertips. Some subscribers say this tool alone justifies their subscription price.
    The subscriber-only section of this website
    where likeminded investors are commenting on notes and discussing in forums. Jason joins these interactions every day. They're a treasure trove of investing tips and wisdom.
    The archive of Kelly Letter notes.
    It’s a research center, searchable and smartly tagged to make gathering time-stamped material on covered subjects easy.
    The subscriber podcast.
    Jason reads every letter word-for-word. This feature was requested by subscribers who prefer audio learning. They listen on their Monday morning commute, during a workout, or while reading along at their computer.

    Save 17%

    Pay as you go
    Or sign up to receive free email and learn more about the system.
Bestselling Financial Author