Keystone XL is back -- along with the usual misconceptions about its virtues and dangers. There should be no doubt, however, that President Donald Trump’s executive order advancing the project is a good thing.
The reason is simple: By carrying heavy crude from the oilsands of Alberta, Canada, to refineries on the U.S. Gulf Coast and beyond, Keystone XL would strengthen U.S. energy security.
Keystone would not, as Trump suggests, create a lot of work for Americans. It will take maybe 10,000 people to build the pipeline, and those jobs will be temporary. Only a few dozen will be needed once it is operational.
At the same time, many environmentalists’ warnings about Keystone are exaggerated. Pipelines are a safe, reliable and efficient way to carry oil. Given that Keystone would be built to the latest safety requirements, it would be less spill-prone than the tens of thousands of miles of older pipelines that crisscross the U.S. (This advantage also holds true for the Dakota Access pipeline, another project Trump advanced on Tuesday.)
Keystone opponents also make more universal objections. Crude extracted from oil sands generates more than its share of greenhouse gases, because more energy is needed to remove the sand and dilute it for transport. Technology is already limiting this problem, however. Moreover, oilsands emissions can be offset with reductions in other parts of the economy -- a likely scenario now that Canada has agreed to reduce carbon emissions as part of the Paris climate-change agreement, and Alberta has adopted a carbon tax.
Finally, many environmentalists argue that pipelines such as Keystone only encourage the further extraction and use of fossil fuels, which contribute to global warming. Regardless of whether this will prove to be true, the reality is that there aren’t enough sources of clean energy to meet the world’s needs. And to protect against price shocks, it is preferable for the U.S. to get its oil from domestic sources or from friendly neighbors like Canada.
With or without Keystone, in any case, crude will continue to be extracted from the Alberta oilsands. Prime Minister Justin Trudeau recently approved two new pipelines designed to carry that oil through Canada to world markets.
Trump’s executive order does not amount to approval for Keystone -- the company behind the project has submitted another application -- and there is always a danger, Trump being Trump, that he will make unreasonable demands. On Tuesday he suggested that he wants to the pipeline to use only American steel, and in the past he has vowed to demand a share of the pipeline’s profits.
This would be unwise. Better not to jeopardize a decision that can be justified as a matter of both energy and economic policy and see to it that the pipeline, now almost a decade on the drawing board, is finally built.
© 2017 Bloomberg L.P