When it comes to U.S. energy policy, I am as big a fan as anyone in weaning ourselves from the frenzied feeding at the udder of big oil. Anybody around during the Carter administration can hardly forget the images of long gas lines during the fuel shortages of the late 1970s. As a nation, dependence on oil to run our cars, trucks, buses, trains, planes and ships has eased a bit, but oil still dominates. The U.S. industrial sector, though more energy-diverse than transportation, still depends significantly on oil.
The domestic energy profile in 2012 was such that we consumed 95 quadrillion BTUs of energy. Petroleum is still our largest energy source at 37% of that total; natural gas 28%; coal 18%; renewables (including hydropower, wood and waste biomass, biofuels, wind, geothermal, solar and photovoltaics) 9%; and nuclear 8%. The good news is that domestic consumption of renewable energy forms has increased by about 33% in the last five years. The other good news is that our consumption of petroleum has fallen by 12% during the same period.
The bad news, however, is that petroleum remains king of our energy matrix. We still use more of it than any other energy source, and if we combine it with other fossil fuels like natural gas and coal they account for 83% of our energy consumption. Massive changes in the energy mix occur only slowly, so it is my opinion that any enterprise that keeps the U.S. in the global petroleum supply-and-demand equation is worth pursuing.
This brings me to the controversial, proposed Keystone XL pipeline project as an extension of the existing Keystone Pipeline System, which runs from Alberta, Canada, to U.S. refineries in Nebraska, Illinois and Texas. The extension would consist of a 36-inch pipeline running from Hardisty, Alberta, through Montana and South Dakota to Steele City, Neb. It would transport up to 830,000 barrels per day of crude oil from the Western Canadian Sedimentary Basin in Alberta and from the Williston Basin (Bakken) region in Montana and North Dakota to refineries on the Gulf Coast of Texas.
The Keystone XL project has faced opposition from environmental groups and some members of Congress. Since the pipeline extension crosses an international border it must get administration approval from President Obama to proceed. In January 2012, the Obama Administration (favoring its environmental base) rejected the proposal, citing the potential impact on Nebraska’s environmentally sensitive Sand Hills region. This led TransCanada Corporation to re-route the proposed pipeline to minimize its environmental impact. This re-routing, incidentally, was approved by Nebraska Governor Dave Heineman in January 2013.
We respect the environmental lobby’s position on this project. We also acknowledge its right to shape policy, as it already has, but not to dictate it. It is understood that pipelines aren’t perfect and that accidents or spills can and will happen. That hasn’t stopped us yet, nor should it now. The truth of it is the Keystone XL extension will create numerous American jobs and won’t fan perdition’s flames, as the environmentalists will have us believe.
President Obama has ducked this issue through his first term and re-election campaign, but now it is time for him to let this project proceed.