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
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  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.

  2. Posted March 7, 2014 at 5:11 am | Permalink

    While your cynicism is deeply depressing in part because it rings true. But there is one point you and the authors of the flawed EIS seem to be missing. Simply put, without the Keystone XL pipeline, it will take time and $$$ to get the oil out. At this point, time is precious and our only hope. We need time to change minds. If Keystone is not permitted, the dirty tar sands oil will have to find its markets by rail or truck or another pipeline. Rail infrastructure for tar sands has already been increased 4X and is stretched. Developing or building comparable transportation infrastructure will take time and $$$$. We have to buy more time for planet until we can develop and implement world saving solutions of policy or technology.

  3. Steve Sorensen
    Posted February 19, 2014 at 10:00 pm | Permalink

    Look, we burn fossil fuels because it is cost effective to produce and our entire infrastructure from transportation, electric power generation, mining, production of raw materials, production of finished goods, food production and the rest mostly if not entirely relies on fossil fuel as an energy source or base material. It is a fact of life. When the cost of fossil fuel becomes too high relative to other competing sources of energy and chemicals then and only then will change occur. Only when the discomfort of remaining the same is greater than the discomfort of change can any meaningful progress towards change occur. Now, fighting for what we feel is right is a wonderful thing to do. And right now, I want to learn how to better live off my investments so I can put more of my time towards doing good things for the people of this planet. Altruism is a wonderful luxury for those that can afford it.

  4. John Lipman
    Posted February 7, 2014 at 6:32 am | Permalink

    What we need is someone, in a position to actually do so, who will issue a Kennedyesque proclamation to the effect of, “We will, in this decade, find a way to put nuclear waste somewhere permanently away from the Earth and keep it there.” I would prefer that to be an American president, of course, and perhaps it will be. But whether U.S. or E.U. or India or China, SOMEONE is going to do this. And when s/he does, that will be the end of fossil-fuel energy forever.

    • Posted February 12, 2014 at 2:06 pm | Permalink

      I wish I shared your optimism, but I just don’t anymore. I believe that all relevant parties understand what’s at stake and are just posturing when “questioning” evidence. Everybody knows that we continue using fossil fuel at the climate’s peril, and those profiting off of it have decided that by the time it matters they’ll be long gone — so who cares? It’s the same with overfishing, deforestation, and the litany of environmental degradation issues. We’re systematically destroying the biosphere, and we know it, and we’ll keep doing it until it’s too late to reverse it, then blather on about how it’s nobody’s specific fault so let’s not point fingers but just join hands to look forward not back as we do the best we can with what’s left. Pass the barf bag.

  5. Dan Lopez
    Posted February 6, 2014 at 7:33 am | Permalink

    Ain’t it the truth. Corporate interest and their profits hold us all hostage to their demands, or else.
    Or else what? Do corporations own us or do we own them, without us what do corporations do, where do the profits
    come from?

  6. James A. Olson
    Posted February 5, 2014 at 9:56 pm | Permalink

    And yet the so-called “Environmentals” continue to denigrate nuclear power and launch armed invasions of legal mining operations. They don’t get it.

    • Posted February 6, 2014 at 1:18 pm | Permalink

      Agreed. Nuclear is the cleanest scalable energy source available, and the new generation power plants are very safe. The fiasco in Fukushima has probably set nuclear back 50 years even though it was entirely the fault of political corruption: pay-offs located a non-tsunami-resistant power plant in a tsunami zone, end of story. A different type of plant on the coast would have been fine, the same plant in the mountains would have been fine, but scandalous politicians two generations back set this time bomb that might pack repurcussions for the entire planet. Way to go.

  7. Tony
    Posted February 5, 2014 at 3:24 pm | Permalink

    I don’t understand your website? You write commentaries regarding part economics or current news, but you don’t really write about specific stocks, ratios of stocks, dividends paying stocks or a plethora of stock related specifics on how to improve your wealth, security and just plain old getting ahead for retirement. What is the purpose of you site? I need information that will help me make decisions on stock buying and that is why I buy all of your books.

    Please understand, I am not trying to be negative towards you or your website, but am more interested in only the real aspects of investing and ask you to help us who read your site on a regular basis.


    • Posted February 5, 2014 at 7:37 pm | Permalink

      You don’t? I also write about politics and society in each Kelly Letter, and occasionally share some of those articles on the free site as well. We’ll get back to investing soon enough. Thank you for the input! Jason

  8. "Pops" Rick Brandes
    Posted February 5, 2014 at 3:29 am | Permalink

    Keystone pipeline -the downside to the pipeline being that it re enforces our appetite for oil and does nothing to curb the US appetite for fossil fuel. The upside being that ,hopefully, it WILL curb the outflow of US dollars to countries that are opposed to our very existence

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