Foreign Policy Blogs

Inching Towards Real North American Energy Security

Photo Credit:  rickz, via Flickr

Photo Credit: rickz, via Flickr

In 2011, President Obama instructed the U.S. State Department to try to find a new route for the proposed Keystone XL pipeline citing environmental concerns. The concerns were especially related to a potential contamination of the Ogallala aquifer.

Ogallala Aquifer; Source: http://en.wikipedia.org/wiki/Ogallala_Aquifer

Ogallala Aquifer; Source: http://en.wikipedia.org/wiki/Ogallala_Aquifer

This is an important groundwater source and therefore it makes sense to bypass the most sensitive areas as much as possible. The $7 billion project would carry millions of barrels of bitumen extracted from Canada’s oil sand deposits in Alberta to the U.S. Gulf Coast refineries equipped to handle heavy oil. Please refer for more on that and oil sands in general to my earlier blog post “The Nexus between the Keystone XL Pipeline and Bending the CO2 Emissions Curve Downwards in the Long Term.”

Just today an important step into the right direction — that is, only if you believe that Canada in combination with the Bakken oil is crucial for future U.S. energy “self-sufficiency” — was taken by Nebraska Governor Dave Heineman who approved TransCanada’s Keystone XL 1,180-mile pipeline route through his state. Now the focus shifts to Washington, D.C. where the project awaits federal approval. Here we have a chance to actually create “good jobs” in a booming industry while at the same time increasing our future leverage vis-a-vis less friendly oil-producing countries across the globe. You want better living conditions and freer societies around the world? Bring down the price of oil! Less oil revenue may eventually loosen the grip on power various authoritarian regimes currently hold because these governments will then lack the monetary resources to cover up internal societal problems. By the way, a lower oil price will also spur our economic growth given the huge impact of transportation costs on prices of consumer goods.

We now have to monitor what President Obama will do. To borrow Will Oremus‘ phrase and expand on it: Is President Obama willing to “[sacrifice] the economy at the altar of [excessive] environmentalism”? We shall see. Also keep a close eye on the upcoming U.S. Senate confirmation hearings of John Kerry slated to become the next U.S. secretary of state.  The Senator seems to have a devotion for environmental issues as his track record reflects. However, he also seems to understand that Canadian oil sands will play a crucial role in America’s energy future as his current investments in two Canadian oil (sands) companies, Suncor and Cenovus Energy, show. We need to do both embrace reasonable environmentalism and at the same time steer clear of “excessive environmentalism.”

 

Author

Roman Kilisek
Roman Kilisek

Roman Kilisek is a Global Energy & Natural Resources Analyst.
His research focuses on global energy politics, mining, infrastructure and trade, global political risk and macroeconomics. He is fond of using scenario development and analysis.

He has lived on three continents and traveled to over 40 countries around the world. He now lives and works in New York City.

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