Soon, the Obama administration will likely make a decision on the KeyStone XL pipeline, proposed to carry crude oil extracted from the oil sands in Alberta, Canada to refineries in the United States. There is huge pressure from oil companies to build the pipeline and increase the production of oil in North America.
Meanwhile, environmental groups are staunchly opposed to the pipeline, which they believe will encourage the exploitation of the oil sands deposits and increase the amount of carbon dioxide emitted to the atmosphere. There is no doubt that oil from these sand deposits is slightly “dirtier” than oil that is found in Texas or Saudi Arabia.
But, do we really think that prohibiting construction of the Keystone pipeline will prevent the use of this oil? Tar sands oil is currently produced for about $35 per barrel and sold on a world market where the average price is about $100/barrel. Certainly the pipeline will be an inexpensive way to bring this resource to market, but I think we can be sure that even without the pipeline, the current mark-up will ensure that the Canadians will get the oil out.
What is likely to be most effective in reducing carbon dioxide emissions to the atmosphere is to reduce the demand for oil by increasing the cost of fossil fuels. This will motivate more efficient use and a rapid transition to renewable sources of energy that do not emit fossil carbon to the atmosphere.
Construction of the pipeline is a side-show; meant for political grand-standing and symbolism.
Photo, taken on November 6, 2011, courtesy of Tarsandsaction via Flickr.