Sunday, November 20, 2011

Power to the People

Ask an average American on the street what “national security policy” is, and chances are he or she will answer something along the lines of “something Congress does” (that is, if the person even knows what national security means).  Most individuals don’t feel they have any say in the matter.  However, the unfolding of the Keystone XL Project shows that American citizens can have a say in the matter, and an important one.
 The Keystone XL Project is a proposal to build a trans-continental pipeline to move slurry from the tar sand pits in Alberta, Canada, to the oil refining plants in Cushing, Oklahoma, then to the ports in Houston, Texas.  The pipeline will be 36 inches in diameter, allowing for an estimated 510,000 barrels/day to be added to the oil market from a friendly, stable country.  When TransCanada, the company building the pipeline, applied for permits from the US federal government and the states through which it would cross, approval was considered a “no-brainer” – the US needs oil, Canada has oil, the US and Canada are friends, therefore, it’s a done deal.  
However, TransCanada underestimated the response of the people living in the fragile environment in Nebraska known as the Sand Hills, where the pipeline was sited to run.  Two influential groups reach a nexus here – ranchers and environmentalists.  Both groups objected strongly to the possibility of contamination of the Ogallala Aquifer, an enormous aquifer that supplies fresh water to the majority of the Plains states and happens to have a quite shallow water table.  These two groups – typically opposed, now united – took the issue to the Nebraska Legislature, which called a special session to determine whether or not the state needed its own siting permit laws.  
Concurrently, the media exposed the issue to the nation and people outside of Nebraska, without a vested interest, became involved.  On November 6, a demonstration was held outside the White House, reminding Obama of his pledge to reduce American dependence on oil.  On November 10, Obama ordered new environmental studies and new proposals for pipeline routes, effectively pushing the Project back until after elections in 2012.  On November 14, the Nebraska Legislature passed a law giving the state power to regulate pipeline siting.  However, the law does not require entirely new environmental reports for changes to planned routes, an accommodation made possible by support from the State Department and agreements with TransCanada to seek a route around the Sand Hills.  The people of the Sand Hills had their voices heard, and had a significant impact on a national security issue.  
Was this impact good or bad?  Time will eventually tell, of course, and any assessment of the impact will depend on one’s perspective on oil.  Those who believe the US must reduce its reliance on oil will say the decision to delay will have a positive impact, by strengthening the environmental agenda.  Those who bought into TransCanada’s claims of providing energy, jobs and money directly to the people of the US will say the decision will have a negative impact on American national security, in terms of preventing “friendly” oil to reach market and frustrating our neighbor.  
However, the negative impact must not be overblown.  With Keystone XL postponed, other Canadian oil companies are stepping in to explore options, particularly concerning the project’s component of expanding pipeline from Cushing to Houston.  There is a glut of oil from Canada at the Cushing site, because there is not enough capacity to transport it from Cushing to Houston.  Thus, with other companies stepping into this part of the project, oil can start to move to Houston, releasing the glut (and driving up prices, by the way).  “Friendly” oil is ready to go to market, it just needs a way to get there – and other companies are now looking to make that happen. 
In terms of frustrating our neighbor to the North, this too should not be overblown.  With the American route effectively closed until further notice, Canada is exploring other options, especially looking to China.  While there are issues with routing a pipeline over the Rockies to the Pacific, another option is to reverse flow of existing pipelines leading to the Atlantic, but Canada doesn’t have a developed refinery industry that can handle heavy crude like in Houston.  No, it seems that working with the Americans is the best choice.  However, ruffled feelings on the Canadian side will need to be smoothed when Obama meets with Canadian PM Stephen Harper later in December. 
All in all, the Keystone XL Project has proven to be an interesting and useful exercise in how American people can influence issues of national security.  

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