The Ever Elusive Carrot
The oil and gas industry excels, perhaps more than any industrial group, at leading and prodding political and media “lemmings” over the proverbial cliff. It is prone to gross exaggeration that appeals to hopeful and wishful believers, and to prodding people with innuendo and threats. Take, for example, the American Petroleum Institutes promise of 340,000 jobs materializing if the Keystone Pipeline is built (see Newmyer, T. 2011. End note 8). Big Oils strategy has always been to push the carrot further out front of the horse and cart, and make it as big, fat and (dollar) green as they dare, knowing that far too many politicians, industrialists, merchants, and tradespeople will whip the political and media horse as viciously as the jockey works over the second place horse on the final stretch at the Belmont. Like a horse with blinders the public, media and politicians rarely care to fact check, and academics have failed to provide evidence that inflated promises have come true, or that they never materialize; consequently Big Oil keeps pumping out obese promises.
Promises of great wealth and vast public benefits generously spread through the streets and into the domiciles of each and every resident are standard for the oil and gas industry when it is trying to wedge a massive new project, like the Keystone XL Pipeline, into the political and physical landscape. For those who have lived long enough to have heard the thunder many times, you may recall the lavish guarantees made to Alaskans (and Americans generally) by corporations including BP, Exxon and ConocoPhilips, if only they would be given approval to build the TransAlaska Pipeline (TAPS).
Thirty years have now passed, and how does Alaska stack up? Gasoline there averaged $4.09 a gallon (on 06 July2011), but Texans and Nebraskans paid $3.43 and $3.60 per gal, respectively. In Alberta, home of the incessantly praised Tarsands, drivers fork over about $ 4.18 a gallon!
The trickle down model of economics in which the oil and gas industry specializes virtually guarantees the trickle of wealth will dwindle to a seep that does not or barely reaches large number of citizens and avoids select areas of public services. Alaska for example, in spite of all the promises of financial independence made by Big Oil, spends a very stingy 10% of its budget on K-12 education, well below the average for all states of 26%. Yet it continues to rank first or second in the number of Federal tax dollars that gush into the state; in 2009 the federal government pumped $20,351 per person into Alaska. How do Nebraska, or Kansas, measure up? $9,198 and $12,312 per person, respectively. The promised benefits rarely stack up to reality! Next time someone from Wasilla winks at Alaskans and promises to “get the feds off our backs”, Alaskans had better grab their wallets and lock they bank accounts. Many will be in the soup line if Americans tax dollars dry up.
How about per capita annual income? Alaska does edge out the “pipeline” states in this respect, but that difference (about $4000) cannot be traced to oil or gas “wealth”; it can, however, be tracked to a large federal government presence and federal salaries and benefits pull the average above that of people in the American interior states (U.S. Census Bureau Statistics, 2009). For a state that has shipped between 13 and 15 billion barrels of oil through TAPS and out of state, oil valued conservatively at 330 billion dollars (using $26.00 per barrel average x 13 billion bbls), or roughly $550,000 per Alaska resident (using 600,000 people average for the calculation), these numbers indicate there’s a powerful odor associated with the “you’ll all get rich claims” of the industry and its trade boosters.
These are not arguments that an oil and gas industry is inherently “bad” or “good”; few would be naïve enough to claim we did not accrue some benefit from the early years of the oil and gas industry. The argument, however, is that we don’t “need”, can no longer afford, and cannot in fact survive, the oil and gas industry we are now burdened with.
What the Alaska example does is provide clear evidence that discredits claims by the industry and its boosters that wealth is shared evenly by everyone for a long time when the oil and gas industry comes to town. Alaskans, apparently, have not yet realized that pipelines inherently export wealth and jobs! Nor were they astute enough to insist that a wealth export benefit be paid to the state for each barrel of oil exported. We can be assured that the oil and gas industry lobby has worked feverishly to eliminate prospects that any of the pipeline states, whether it be Montana or Nebraska, will enact a wealth passage benefit on the Keystone XL Pipeline payable to the people of the state; a $1.00, or 50 cents, or even 10 cents per barrel payment for the jobs and wealth being shipped through the state by corporations profiting mightily from those shipments would pay to the state $50,00 to $ 500,000 daily to compensate a states residents for the disruption and destruction associated with pipeline upheaval.
The industry has always been prone to exaggeration, partly because exaggeration has “worked” on politicians and partly because industry has never been held to account for their claims. Just as the shale craze sweeping America regularly employs distortion and misrepresentation (see Urbina, I., 2011, end note 2) to lead gullible politicians, media and some members of the public to a trough that will never be as full as industry argues it will be, the Keystone XL project resembles the Jolly Giant packing a fluffed punch. Not only has the “pork” never been slopped into the trough, as they might say in Washington, and as Alaska has demonstrated, but until 10 years ago the world was largely unaware that something as ominous as global climate disruption was eating away at the so called benefits, dramatically narrowing the gap between “benefit” and cost. As of this century, growth in oil and gas consumption and the cash that flows to selected benefactors can no longer be placed in societies credits column.
When exaggeration becomes a matter of routine, it works both ways; not only pumping up benefits but also deflating costs (environmental, social and economic). One example is TransCanadas suggestion that over the 50 year life of Keystone the line will suffer only 11 major spills, yet a recent independent analysis indicates a more realistic assessment would be 91 major spills. The consequences for local and regional water supply are monumental; water is a big deal in this part of the Great Plains (it is everywhere) and the cascade of impacts for residents, agriculture, fish and wildlife, and vegetation will be more than serious.
Everything to Gain by saying NO!
The six states that Keystone will cut a swath through form the conservative heartland of America. This is Republican territory; 5 of 6 governors, 10 of 12 Senators, and 36 of 46 Congressional members, are unrelenting conservatives; and obviously, many local citizens are of the same mind, producing a blue block that showed near unanimous support for McCain in 2008. If Obama needed political neutrality to make the right decision, even though a good leader does not need such a state of affairs, the pipeline proposal stands as a perfect opportunity to reject the corporate “business as usual” Keystone XL Pipeline with confidence. Not only would the President be doing the right thing for America and all Americans, but he will pay no political price from the regional power structure along the pipeline route for doing so. He stands to gain no functional support here, nor will he gain influence in the Senate or House; nor does he stand to lose votes, or seats. He has a free pass to make the correct decision here, starting America on its way to energy and environmental recovery. And, of course, he has to think of this part of America as only part of a greater America. Whether the people of Nebraska and Kansas care or not, they will suffer as much as the rest of America if the President makes a bad decision, and they will gain as much as their fellow Americans if he wisely decides not to issue a presidential permit.
At a time when the Environmental Protection Agency has finally issued a rule compelling power plants in 27 states and the District of Columbia to reduce smokestack emissions, the Obama administration may well fumble an opportunity to limit and regulate an equally destructive source of atmospheric toxins–GHG emissions from the mindless upward spiral in petroleum and natural gas consumption.
I suspect the vast majority of the people in the pipeline states care little, or perhaps don’t know, that 97% of the worlds most prominent climate scientists recognize that human and industrial activity is responsible for global climate disruption. Its possible they may not care that, should the President approve the pipeline, the (promised) almost 7-800,000 barrels of oil that could flow through it daily will force Canadians to import, in the future, a half million barrels of oil a day to partly replace the oil TransCanada, Exxon, and Shell (I make this distinction to separate what these corporations want from what Canadians want) want to ship to America. They may not be aware that the Alaska Gas Pipeline project, and the Mackenzie Valley pipeline, each as physically long and as ecologically, economically and socially disruptive as Keystone XL, may be built largely to fuel tarsands oil extraction. While this absurdity–shunting oil and gas around the world for corporate profits–will be hugely costly to all North Americans, I suspect most Americans are also unaware that a portion of the Keystone oil will be exported from America to any part of the world prepared to pay a premium for Tarsands oil, presently the world’s most expensive oil; in other words, Nebraskans and Kansans will not be amongst the bidders!
It is troublesome that many of the people of South Dakota, for example, may be unaware or don’t particularly care that the Keystone Pipeline will be directly linked to the fast looming extinction of woodland caribou in Alberta, or that Tarsands oil produces emissions as much as 30% greater than the conventional oil extracted, for example, from the Williston Basin. They should, however, care that the massive shift in resources that will be consumed by the pipeline–electrical power, for example–will drive up costs for everyday living for millions of people as the pipeline sucks energy away from residences, schools and hospitals.
It is not likely that residents of the pipeline states know, or even care, that twice as many Canadians (80% in February, 2011) as Americans think there is solid evidence for global climate disruption, given that perhaps as few as 41% of conservative residents in the pipeline states feel the same way. They should, however, care that the big multinational (Korean, Chinese, French, Scandinavian and American) Corporations that control the Tarsands industry in Canada, have been busy trying to take down Americas environmental protection regulations and legislation, buying diplomats and lobbyists to undermine the protection Americans have worked hard to build over 30 years so that “the oil keeps a-flowing”.
The President, and regulators like the EPA on the other hand, have a legal and moral obligation to know these realities. He and they have an obligation to make a decision not for corporate benefactors, or the Oklahoma land owner that is willing to accept cash that might pay his/her way for one or two months, but for the many Americans who have been and will increasingly suffer from escalating green house gas emissions, industry political interference, and the severe hardships and psychological deflation associated with false promises that they will all realize the “American dream” if only “Americans” let TransCanada build the pipeline.
The pipeline decision is not a case of starting with a clean slate. The scientific, environmental, social and economic impacts of over dependence on fossil fuels are already substantial; they are hurting American now - today! Yet TransCanada and ConocoPhillips are asking people, like the President and the residents along the pipeline route, to play dumb and ignore this high base load of impacts. The President often talks about “making the tough choices”. Now he has a chance to walk the talk, and say NO to the Keystone XL Pipeline.
My read on the Obama Administration, and particularly the executive office, is that is getting very poor scientific advice, and in some areas, such as the natural and conservation sciences, almost no advice. It appears outwardly that Secretary of Energy Stephen Chu is more of a techno addict than a visionary and reasoned social thinker, someone more inclined to propose that if America could just dig deeper and faster with the right technological tools, it would work its way out of the climate disruption / ecological collapse hole. Given the Administrations track record, facilitated by Secretary of the Interior Ken Salazar, of virtually rubber stamping an escalating number of major industrial projects from more drilling in the Gulf of Mexico and the hills of Wyoming to massive landscape flattening solar projects and wind turbine ghettoes, their grasp of the climate and consumption crisis facing America and the world resembles a strategy of “turn on all the taps, we’ll just guarantee loans for, or directly fund, or provide massive tax breaks, for more innovation and technologically advance mops”. The inescapable conclusion is that Americas capacity, and will, to govern and regulate for the overriding good of the people, has been severely crippled (see Cooper, P.J., 2011, end note 8, for example) by almost half a century of continuous and damaging attacks from extreme corporate funded conservatives; and Chu and Salazar have not shown the grit necessary to help reform Americas energy agenda.
Recognizing that there are other grinding pressures distorting civilization in America, the reality is that the ecological and atmospheric order of the country within which Americans, their parents, and their grandparents lived and worked is in rapid decline. It will not be mended or regained by technological means, no matter how strenuously Energy Secretary Chu, the geo-engineering crowd and their Chamber of commerce backers, insist it will be if we just redirect greater and greater sacks of taxpayer money to corporations and business so they can “win the future” through innovation and growth.
In the very near future, I suspect, President Obama, will approve construction of the Keystone XL pipeline; He will do so in the face of overwhelming evidence that this is exactly what he ought not to do.
There is an important, fundamental principle about change that appears to have completely escaped President Obama and his inner circle and no where is it more critical, and yet more conspicuously absent, than in Americas apparent race to produce ever skyrocketing emissions of GHG. That principle, that fundamental law of nature and human and corporate behavior, is that change requires resistance. Bringing about–how nice a saying is that–change is about instigating and implementing economic, political, regulatory and social resistance to the status quo. It is about resistance to “business as usual”, about placing people from outside the inner “trained” circle into positions of influence, about trumpeting to the people that change is good, change is essential, and change is coming; it is about resistance to corporate freewheeling and corporate excess and greed. In the case of the Keystone XL pipeline, it means resisting the lobbying to load it on to an already obese consumption of energy. Changing the direction in which America is racing requires Resistance to those who ideologically and seemingly mindlessly promote “more growth”, and in the case of the Keystone XL pipeline, change for the better of America means saying no, and saying it emphatically.
Only free market ideologists can justify their almost unconscious acceptance that “more” is always better. It is an attitude that relegates 305 million Americans and 35 million Canadians to guinea pig status, even when some of them recognize and accept, in some cases willingly and in others reticently, that personal limits and government regulatory and policy resistance is essential if America is to avert financial, social and environmental chaos.
Americans have every right to, and I believe should, be thoroughly disconcerted by the presidents apparent unwillingness to, if not embrace evidence and science, at least openly declare an understanding that it should be the basis of good decision making; this does not bode well for America. While his actions reflect retreat before the anti science extremism of the new GOP, Americans I believe, thought they were electing a president that had an edge and determination to fight for a new direction in America that would at least incorporate some of the physical and natural science evidence needed to slow or avert the biodiversity and climate crisis. Few expected him to capitulate so completely to the forces that have driven America away from its former greatness to its present stance of promoting fairy tales about the American economic and consumption dream. At the very least many Americans expected him to show the fight and feistiness that he demonstrated when battling Hilary Clinton for the Democratic Party nomination, but in his presidency that has rarely materialized. And in terms of protecting himself and all Americans from the all inclusive damage of global climate disruption and degrading ecosystem services, any willingness to at least speak up for science and reason has dissipated. Many Americans at least hoped for and thought he would not abandon the vision for a greater America even if, or as, he was being battered by a radical offensive congress and radical senate.
He has at this disposal the ability to initiate incremental actions, take small steps, that would reflect his sense of what is right or not right, that would indicate to the American people that he has not been overwhelmed by the Political Right. He can reject the Keystone XL pipeline proposal, showing that he and his advisors, like the American scientific community has attempted to do, are able to link action with consequences. Disappearance of half of the worlds permafrost in only decades, severe droughts over vast parts of the American southwest, intense pressure on humans to migrate within the country, unmanageable water shortages, and escalating health care costs are just a few of the dozens of major issues that can be and have been reliably linked to failure to speak to, enable and implement scientifically sound regulatory governance. Surely, we would hope, the president would at least speak out about the critical nature of these serious threats, threats that make issues like international terrorism pale into virtual irrelevance.
If President Obama and his inside cabinet approve the Keystone XL Pipeline, they are doing exactly what corporate America wants them to do, and that is allow this industry to “self regulate”, much like the financial industry succeeded in doing in the 80’s and 90’s run up to the financial collapse of 2008.
If the President makes the wrong Keystone decision and approves the XL line, in the false assumption that it will grant him political amnesty from industry, GOP and Chamber of Commerce scorn, he will, within his lifetime, wreak havoc on American and the world–his mistake will displace millions of Americans, disrupt the lives of millions more, cost governments, taxpayers, and insurers billions of dollars, divert immense and increasingly rare resources away from critical problems like environmental protection and social and medical safety nets, further aggravate social and wage disparity in the workforce, intensify the biodiversity extinction debt already rearing its ugly head, increase the occurrence and severity of devastating drought and storms, embolden the oil and gas elite to demand ever more concessions, and make a mockery of an already crippled environmental assessment and regulatory system.
He will demonstrate that he has succumbed to the constant barrage of propaganda that preaches that incremental decisions and their consequences are insignificant. And he will have fallen for the slick campaigns of corporate America that have succeeded in separating incremental decisions from the massive base load of damages and harm already imposed by the fossil fuel industry on our landscapes, aquatic ecosystems, economic and regulatory systems, and our atmosphere.
That we charged by sustainable atmospheric carbon concentrations over 20 years ago, when the world already annually consumed about 700 years of stored / processed sunlight, will deliberately escape him, his science advisors, and the coterie of good old boys this self proclaimed “President of Change” appears to have surrounded himself with. He cannot, under these circumstances, lay claim to the mantle of leader.
He will not only practically violate the rights of tens of millions of American to depend on and expect clear air, clear water, and food at reasonable cost, but he will morally violate their legitimate expectation to live a decent life largely free of extreme hardship and continuous conflict and stress. He will, if he approves the Keystone XL pipeline, appeal to selfish special interests and the lowest common political, social and economic denominator.
He will, apparently willingly, aggravate the extreme bias in wealth and consumption now evident in American between those on the upper rungs of the income and consumption ladder, which disproportionately includes people in the oil and gas industry, and the vast majority of Americans. If he approves the Keystone XL pipeline, he will reinforce those at the income top and further commit those in the middle to decline and those at the bottom to prolonged disadvantage. This, I suggest, directly violates his ”win the future” agenda, assuming he intended it to benefit the 80% of Americans in the middle and less advantaged economic classes.
Dress this up however the President may, and he most certainly will pull over its head the “Jobs” and “economic growth” frock, but he will never honestly be able to call it “winning the future”.
Todays regulators, whether it be the Bureau of Land management, the Bureau of Ocean Energy Management, the U.S. Forest Service, or the Environmental Protection Agency, along with the even lesser state regulators, have revealed they are simply no match for the astonishing cohesiveness and organization of todays oil and gas industry, its significant financial might, and its deep entrenchment in the political hierarchy. They have demonstrated individually and collectively, time and time again, that they cannot protect the public, atmospheric integrity, biodiversity and services dependent on healthy ecosystems encompassing public and private landscapes, or even their own regulatory structure, from the exceptional determination of the corporations that exploit petroleum and natural gas resources.
It remains to be seen whether this President, armed with the moral influence and legal authority of his office, can and will do better.
Read Part I of this article here.
Dr. Brian L. Horejsi is an ecologist and analyst in Calgary, Alberta.
This article ran in CounterPunch on 09 August, 2011, under the title: “How the Keystone XL Got Buried by Bad Decisions: Obama and the Tar Sands Pipeline”.
 “Where do our state tax dollars go? 2011.” Center on Budget and policy priorities. April 12. At http://www.cbpp.org/cms/index.cfm?fa=view&id=2783.
 Stansbury, J. 2011 “Analysis of Frequency, Magnitude and Consequence of Worst-Case Spills From the Proposed Keystone XL Pipeline.” University of Nebraska. Independent report.
 Anderegg, W. R. L., Prali, J.W., Harold, J. and S.H. Schneider. 2011. “Expert credibility in climate change.” Proceedings of the National Academy of Sciences, early edition.
 De Souza, M. 2010. “Canada aims to ‘kill’ U.S. green policies.” Calgary Herald, 29 November.