Building Pipelines Leads to Growth – Not in Jobs, But Carbon Emissions
TRNN’s Dimitri Lascaris says despite their difference in style, Trudeau and Trump share the same support for disastrous climate/fossil fuel policy
KIM BROWN: Welcome to The Real News Network in Baltimore. I’m Kim Brown.
Canada’s Prime Minister, Justin Trudeau, is in lockstep with Donald Trump, over his support of Keystone XL, the controversial $8 billion pipeline that the Obama administration had previously rejected. The pipeline would carry up to 830,000 gallons a day of Alberta oil tar sands to Nebraska, and from there, on to the Gulf of Mexico for refinement, and shipping to ports predominantly in Asia.
Donald Trump has said building the Keystone, as well as the Dakota Access pipeline, is in the interest of the public. Let’s take a look at a clip of his recent address to Congress.
DONALD TRUMP: We have cleared the way for the construction for the Keystone and Dakota Access Pipelines, thereby creating tens of thousands of jobs, and I’ve issued a new directive, that new American pipelines be made with American steel.
KIM BROWN: And here’s what Prime Minister Trudeau had to say on the topic.
JUSTIN TRUDEAU: I’ve been on the record for many years supporting it, because it leads to economic growth and good jobs for Albertans.
KIM BROWN: With us to discuss the validity of either of those arguments, in support of the Keystone XL Pipelines, we are joined by Dimitri Lascaris, who is an attorney. He’s also an activist, and a board member here at The Real News.
He joins us today from London, Ontario. Dimitri thanks for being here.
DIMITRI LASCARIS: Thank you, Kim.
KIM BROWN: It turns out that Trump’s statement, that the pipeline has to be built with American-manufactured steel may not be the case. Talk about that.
DIMITRI LASCARIS: Yeah, he signed an executive order some time ago, which required pipelines to be built with U.S. steel, but when questioned on this by… when one of his spokespersons was questioned on this, the spokesperson, I believe it was Sean Spicer, clarified that the steel that would be used in this case, could be non-American steel because this a project that’s already underway. And a lot of the steel has already been purchased.
So, as it turns out, probably –- and this is, I think, certainly if not the biggest pipeline project pending in the United States, certainly one of the biggest — it is not at all going to be required to be done with U.S. steel.
KIM BROWN: And Prime Minister Trudeau says that building the pipeline will result in economic growth in Canada, and good jobs for Albertans. Is there any truth to those statements?
DIMITRI LASCARIS: Well, both of them are making quite interesting claims about jobs. It’s interesting that the American Petroleum Institute lobby group claimed in 2009, that Keystone would create up to 3,000 new U.S. jobs over a four-year period, based on demand for new goods and services, and add up to $34 billion in the U.S. economy, in 2015.
However, the non-partisan Congressional Research Service, found those estimates were based on an internal study that had not been subjected to meaningful review. And the State Department, in its own analysis, found Keystone would create about 42,000 direct, and indirect, temporary construction jobs, and about 50 permanent jobs once construction is finished.
And now, we’re hearing from Donald Trump the number is even lower. He said tens of thousands in that clip you played. He specified elsewhere recently that the number is about 28,000, which he calls, “great construction jobs”. Well, these “great construction jobs” will evaporate once the pipeline is complete, and what you’re going to have left is a negligible number of permanent jobs.
The environmental consequences, on the contrary… by contrast, are going to be a long term, and arguably permanent. And on the Canadian side of the border, there are claims that this is going to create a few thousand jobs, principally in the construction industry, but again we’re talking about jobs that are only going to last as long as the project is in development. Once that pipeline is up and running, the number of jobs that that’s going to create, and continue to provide to the economy, will be completely negligible.
So, these economic claims, I think, are being greatly exaggerated, and what both Trump and Trudeau are not doing, is looking at the longer-term economic implications. Not just the longer term economic implications, but more importantly the longer-term environmental implications of this project.
KIM BROWN: Expand on that further, Dimitri, because we heard a lot about what the potential economic negative… rather, environmental impacts could be, of Keystone XL Pipeline, when the issue was really hot, during the Obama administration. But after President Obama put the kibosh on it, the swell around it died down. But now that it’s being resurrected, those same arguments still apply.
The people that live in Nebraska, and Montana, and areas where this pipeline is slated to run through, have vigorously expressed their opposition to this. For the purposes of the environmental impact, and what would happen if the pipeline were to rupture, specifically carrying this Alberta oil tar sands.
DIMITRI LASCARIS: It’s interesting, to contrast Trump and Trudeau. With Trump at least you know what you’re getting. You’re getting somebody who doesn’t really buy the whole science of climate change. At one point, he called the global warming hypothesis a hoax perpetrated by the Chinese. He’s been very clear that he’s going to do everything conceivable to advance the interests of the fossil fuels industry. He’s even put the former CEO of Exxon in the all-powerful position of Secretary of State.
Trudeau, on the other hand, likes to convey to the Canadian public that he is concerned about the climate crisis. He gets it; he understands and doesn’t question the overwhelming scientific consensus. But under the surface -– or not so under the surface –- he’s doing essentially what Donald Trump is doing. He’s doing everything he can to promote the tar sands industry in Canada.
A few years ago, James Hansen, the NASA scientist, wrote in the New York Times, quite rightly, that if Canada continues to develop the tar sands, it’s game over for the climate. And he’s not only cheerleading Justin Trudeau for the Keystone XL Pipeline, he’s approved very recently, in November of last year, two other pipelines, which we’ve discussed on The Real News. The Kinder Morgan pipeline, and the Line 3 pipeline.
And there was a study done last year, by David Hughes, one of Canada’s leading energy experts, in which he said that people like Justin Trudeau are advancing a, “have your cake and eat it too” argument, because there’s no way that Canada can meet its climate change commitments with the construction of these pipelines. And I didn’t mention, with the approval of a liquefied natural gas terminal out in B.C., which has been rightly described as a carbon bomb.
David Hughes has said the cheapest, and most sensible approach to reducing greenhouse gases from current 732 megatons, to 2020 target of 620 megatons, involves shrinking the oil and gas industry, by limiting bitumen extraction from the tar sands and not building more pipelines. Even building just one liquefied natural gas terminal, as Justin Trudeau has approved, and with modest growth in the tar sands, we will increase in this country, oil and gas emissions from 26% of Canada’s total greenhouse gas emissions in 2014, to 45% by 2030.
And under such a scenario, as forecasted by the National Energy Board, the rest of the economy in Canada would be forced to contract its emissions by 47%, in order to meet its promised greenhouse gas reductions. That would cause a significant amount of economic pain, and would be difficult, if not impossible, to achieve.
So, we have a prime minister here who is essentially talking out of both sides of his mouth. On the one hand, he claims to care about the climate crisis, on the other he seems to be doing everything possible to prevent Canada from meeting its commitments, under the Paris Climate Accord.
KIM BROWN: Dimitri, one argument that people often make for oil pipelines, is that they are safer than transporting it by rail, as we saw in the disaster that happened in Quebec, that resulted in the loss of human life.
What do you make of that argument? Is it safer to transport this highly caustic gasoline, or gas derivative –- oil derivative –- by pipeline? Isn’t that better than pushing it through people’s neighborhoods on the back of a rail car?
DIMITRI LASCARIS: Well, as the people of Michigan found out all too painfully, that’s not the case. There was a pipeline spill there in the Kalamazoo River that had disastrous consequences, and that is continuing to have quite negative environmental consequences for the people of Michigan. And this type of fluid, the bitumen, which the …(audio drop)… in order to make it transportable by way of pipeline, is almost impossible to clean up, particularly if it spills into the marine environment.
There are spills going on all the time. Pipeline spills are an almost weekly occurrence in North America. Many of them are not so large and devastating as to attract the attention of the media, but they happen frequently. There was a whistleblower who came forward, in, I believe, out of the TransCanada Pipeline company, not so long ago, who gave evidence, who revealed evidence, that the company’s safety practices were substandard and quite alarming.
So, yes, it is true that transporting bitumen by rail creates risks, and we’ve seen that, for sure. But pipelines do as well, and the only way to really manage these risks, is to wean ourselves off of the tar sands as quickly as possible. If we really are concerned about public safety, that’s the right way to go, and to make massive investments in renewable energy, and to transition to a renewable energy economy as quickly as possible. And that regrettably, is not being done here.
KIM BROWN: Speaking of being concerned about public safety, or lack thereof, Dimitri, can you tell us who really stands to benefit from building the Keystone KX Pipeline?
DIMITRI LASCARIS: Well, you know, that’s an interesting question, because from an economic perspective, it’s not clear that even the industry is going to benefit from this in the long run. Tar sands are among the most expensive sources of oil in the world. Costing an average of $75 to $80 a barrel to produce, according to Norwegian energy consulting firm …(audio drop)…, and Chris Lafakis, of Moody’s Analytics, estimated that in order for new drilling …(audio drop)… economical, the price of oil would need to be around $85 to $90.
Right now, Western Canada Select, basically tar sands oil, is trading at around $52 a barrel. So, the economics of this project, even just looking at it purely from a profit standpoint for the industry, are highly dubious. And I think the industry is making a… it’s really a very risky gamble, that the price of oil is going to rise, and persist at a level that is sufficiently elevated to make the project profitable on a long term basis.
And implicit in this wager that it’s making –- I mean, really, this is an implicit wager that the entire fossil fuels industry is making globally -– is that humanity is going to collectively commit suicide. It will continue to extract fossil fuels, burn fossil fuels, even to the point of rendering the planet unlivable. That really is the only way that any of this makes any sense, from a pure profit perspective, in the long run.
And I would hope –- I would hope –- that that is a wager that is going to turn out to be a losing bet, and that humanity will come to its senses and politicians will come to their senses, and realize that we cannot afford to continue to remain dependent on fossil fuels.
If that happens, this project is going to turn out to be an economic disaster for the tar sands industry, and for the constructor of that pipeline.
KIM BROWN: Indeed. On the surface, it may not look as if Trudeau and Trump have a lot in common, but you look a little deeper, maybe they do. Justin Trudeau and Donald Trump, obviously on the same accord, when it comes to constructing the Keystone XL Pipeline. Which will originate in Alberta, Canada, travel through the midsection of the United States, on to the Gulf, where people are certainly showing a lot of concerns about the environmental impacts, and whether or not the economic rewards, or dividends, will be what they have been promised.
We’ve been speaking with Dimitri Lascaris. He is an attorney, also an activist, and a member here of our board at The Real News. Dimitri, we appreciate you speaking to us. Thank you.
DIMITRI LASCARIS: Always a pleasure, Kim.
KIM BROWN: And thanks for watching The Real News Network.