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Pros and cons of a proposed pipeline to bring crude oil from Canada to the Gulf of Mexico. Understanding the stakes for the environment, the U.S. economy and the White House.
- Matthew Koch vice president for Oil Sands and Arctic Issues at the U.S. Chamber of Commerce’s Institute for 21st Century Energy
- P.J. Crowley former U.S. Assistant Secretary of State for Public Affairs; retired Air Force colonel; the General Omar N. Bradley Chair in Strategic Leadership at the Army War College, Dickinson College and the Penn State Dickinson School of Law; and a fellow at The George Washington University.
- James Hansen climate scientist; director, NASA Goddard Institute for Space Studies
- Juliet Eilperin environmental reporter, The Washington Post, and author of " Demon Fish: Travels Through the Hidden World of Sharks."
MS. DIANE REHMThanks for joining us. I'm Diane Rehm. The Obama administration is facing a political problem regarding a proposal for a 1,700-mile crude oil pipeline from Canada to the Gulf of Mexico. Joining me in the studio to talk about why the Keystone XL pipeline is getting so much attention: Juliet Eilperin of The Washington Post, Matthew Koch of the U.S. Chamber of Commerce's Institute for 21st Century Energy and P.J. Crowley. He is former U.S. assistant secretary of state for public affairs.
MS. DIANE REHMJoining us by phone, from his home in New York, James Hansen of the NASA Goddard Institute for Space Studies, and, of course, you are always welcome to join us, 800-433-8850. Send us your email to email@example.com. Feel free to join us on Facebook or send us a tweet. Juliet, I'll start with you. Describe this project for us.
MS. JULIET EILPERINThis project is an extension of an existing pipeline that crosses the U.S.-Canada border that takes crude oil coming from a region known as the oil sands or tar sands of Canada from Hardisty, Alberta, down to Cushing, Okla. And this extension, if approved, would basically run also from Hardisty but go all the way down to the Gulf Coast to Port Arthur, Texas. So it would bring that crude oil further down so that it would have easier access to American refineries.
REHMWhy is it called tar sands?
EILPERINThat's a good question. Basically, what you're talking about is extracting a kind of heavy crude where it's -- a (unintelligible) is kind of the material where it's mixed with clay and water and so forth, and so it's fairly sticky. And, in many ways, the way it's extracted looks more like mining than like conventional drilling the way people would think of it.
EILPERINAnd so the Canadians and people who support it call it oil sands because it is oil that's mixed with sand, and those who criticize it, who emphasize the stickier nature of it, refer to it as tar sands.
REHMMatthew Koch, what do you see as the potential economic benefits?
MR. MATTHEW KOCHThis is a tremendous project that's going to bring thousands of jobs to America and a lot of investment. You're looking at at least a $7 billion investment by the company TransCanada that's building the pipeline, as well as the residual benefits to state and local governments of property taxes. You know, other taxes are going to come from income taxes and whatnot.
MR. MATTHEW KOCHSo you're looking at billions of dollars in the short term during the building of the pipeline, as well in the long term during the length of the project and how long the pipeline is in place. So it...
REHMI have heard estimates of 20,000 jobs?
KOCHAs high as 20,000 jobs are estimated. I think that most people would say it's somewhere between 15- and 20,000 jobs just in the construction and manufacturing stage.
REHMAnd yet Cornell University says the project would create no more than 2,400 to -- 4,600.
KOCHIt's hard to understand where they got their numbers from. I think they've looked at a number of different factors that most people may not have -- would have been loathe to consider. But if you look at what TransCanada has agreed to do with the labor unions, as far as their project labor agreements alone, you know, you're in the tens of thousands of jobs right there.
KOCHYou're probably about 13- or 14,000 jobs as well as each pumping station. You know, there's a few hundreds of those. That's going to require about 2,000 people to build those. I mean, there's a lot of jobs there.
REHMBut I don't understand because those figures of 2,500 to 4,600 come from TransCanada's own data.
KOCHThere's also been a study done by the Canadian Energy Research Institute that has the high end of about 20,000 jobs. That's CERI, the organization is called. They did a -- published a study earlier this year. Their number was close to 20,000, whereas TransCanada's number, as you indicated, was a little lower than that. That's why we're kind of using that realm of 15- to 20,000 jobs. But it's still a lot of jobs. I mean, that's a significant number.
REHMJames Hansen, what are your concerns for the environment?
DR. JAMES HANSENWell, first, I should comment that I'm speaking as a private citizen, not for the government. My concerns are that we understand very well that if we're going to stabilize climate, we're going to need to phase out the conventional fossil fuels over the next few decades. And we cannot develop these unconventional fossil fuels like tar sands and tar shale 'cause that would put so much carbon in the atmosphere that there would be no hope of stabilizing climate.
DR. JAMES HANSENAnd our children and grandchildren would be faced with a situation which is basically out of their control, and it's a situation that would not be of their making. But it would be of ours. And we now understand the science, and we should not be ignoring this and just charging right ahead to continue our addiction to fossil fuels and develop these extremely dirty ones.
REHMSo, as far as you're concerned, you're not just against this particular project, but you want to see the country move away from fossil fuels altogether?
HANSENWell, you know, that's been well agreed internationally that we're going to need to do that to stabilize climate. And the governments have agreed to that, but then they just go right ahead approving fossil fuel extensions like this, which show that they're -- you know, they're talking out of two sides of their mouth at the same time. We cannot stabilize the climate if we develop these extensive, unconventional fossil fuels.
REHMP.J. Crowley, what is it about this particular pipeline that makes it so different from other energy exploration?
MR. P.J. CROWLEYWell, from a process standpoint, literally, it's because the pipeline crosses an international border. The review process is being overseen by the Department of State, so it has an international or even a national security, you know, dimension to it. And it represents a collusion of national interests. You know, on the one hand, do we want to see, you know, jobs created, economy and trade expanded? Absolutely. Do we want to see stable energy sources around the world? Absolutely.
MR. P.J. CROWLEYIf you have an extra dollar of energy to spend, would you rather spend it on a democracy like Canada as opposed to an unstable or dictatorial regime, you know, like a Venezuela or an Angola? The answer is absolutely. But, by the same token, there is clearly an environmental cost to what this, you know, project entails.
MR. P.J. CROWLEYAnd the process that is going on right now, overseen by the Department of State but involving eight federal agencies, is to try to achieve that right balance. You know, would the benefits that are there outweigh the cost? And that's the determination that'll be made by the end of the year.
REHMWhich is what puts the Obama administration in such a tricky position. Juliet, the company -- the pipeline company TransCanada applied for this permit three years ago. How come it's just catching on?
EILPERINThat's a good question. So, really, what you've seen is the political movement opposing it has really grown in scope over time, and there are a couple of reasons for that. One is that simply the number of environmental groups and activists who got involved has expanded, and what you saw is obviously -- and that's one reason it's great to have Dr. Hansen on.
EILPERINIt was -- one thing was when Jim Hansen published an analysis in June, making the point that he's making, that it would be incredibly difficult to stabilize the climate if you really did extract all the possible crude you could get from the tar sands. That galvanized a number of people who hadn't been involved before, primarily because someone named Bill McKibben, an activist who's based in Vermont who's very effective in mobilizing grassroot supporters across the country, really got heavily involved.
EILPERINSo you have that going on. But there's also a broader political framework here, which is that the Obama administration, which obviously has taken some measures to address greenhouse gas emissions, most significantly by curbing the greenhouse gas emissions we get from cars and light trucks, has failed to deliver on a couple of important points, including both passing of mandatory limits on greenhouse gases nationwide for a climate bill.
EILPERINAnd, secondly, even though this wasn't a climate issue per se, the president himself decided to pull back stricter smog standards, which were sort of -- which he'd adjusted in very early September. And that really angered some environmentalists, and so it's really kind of the vacuum on some of these other issues that has propelled environmentalists to take a harder line on keystones.
EILPERINThey kind of are saying, it's almost a three strikes, and you're out. The president already had one strike with the smog standards, and this would definitely be considered a second strike again.
REHMSo, P.J., you've got alliances, really, on both sides of this issue really pushing hard.
CROWLEYYeah, it's a very complex issue in terms of politics because then, you know, in terms of the pipeline itself, you've got Democratic governors -- say the governor of Montana, for example -- who favors the project. You've got a Republican governor in Nebraska who is opposed to the project because it does cross through, you know, some sensitive lands with an important aquifer, you know, there. So it is an issues-based challenge. The politics are complex.
CROWLEYYou know, certainly, you know, for a Republican candidate, as we approach a 2012 presidential year, if the president, while he's out touting and favoring job creation, were to decide not to pursue a project that has jobs -- we can debate how many jobs attached to it -- that becomes a mixed message for him. So it's a very complex issue, and it comes at a particularly sensitive time. If the president makes a decision in one direction, I can write the talking points for Republican presidential candidates all by myself.
CROWLEYSo it's not only, as Juliet was saying, the issues. It's also, I think, the timing because this is a decision that we made at the start of a presidential election year. And someone is going to be happy, and someone is definitely going to be unhappy.
REHMP.J. Crowley, former assistant secretary of state for public affairs. He is current General Omar Bradley chair in the strategic leadership at the Army War College and Dickinson College and the Penn State Dickinson School of Law. We'll take a short break here and be back with your questions, your emails. I look forward to hearing from you.
REHMAnd welcome back. We're talking about a proposed crude oil pipeline from Canada to the Gulf of Mexico that has created many, many demonstrations of various points of view. You'll hear this morning various estimates as to how many jobs it could or might create. I want to turn to you, Matthew Koch, on the issue of the labor unions and where they are on this.
KOCHYeah, thank you. It's pretty -- it's been pretty interesting, as P.J. had pointed out, you know, some of the unique dynamics that are happening with this issue. And, you know, interestingly, a lot of the labor unions, particularly in some of the states in the Midwest where the pipeline is going through, have been very supportive, including some of the national unions as well. Everyone from the AFL-CIO to the pipefitters and the building trades because, you know, obviously, they're interested in these jobs.
KOCHThey have workers and people who are out of work, and they know that as, you know, we've indicated that there's -- you know, again debating the -- try not to debate the number of jobs -- but there are jobs that are going to be created and that it…
REHMWhy not debate the number of jobs? Don't you think that's important?
KOCHWell, I think it -- you know, it's -- certainly, you can argue about whose estimates, you know, are better. But at the same time, you know, I can point to TransCanada's agreement with a project labor agreement with labor to provide at least 13,000 jobs. So, at a minimum, you know, labor understands that they have an agreement with TransCanada, and they're going to have to somehow produce those jobs or they violate their agreement.
EILPERINOne thing I want to chime in is that while -- and certainly we've made this point when we've written about it. There is no question that you have some major unions, where they're talking about the pipefitters and the plumbers, the operating engineers, the Teamsters laying out. They're all in favor of it. There are a couple of transit unions that have come out against it, and I think obviously that kind of shows.
EILPERINAlso, again, part of it is where you're going to put your money. The transit unions, obviously, are more interested in, you know, providing for public transit and having less emphasis on, for example, oil and gas. And so I think, you know, again, just as these economic issues are complex, that's one of the reasons why you do see some complications. And it's the reason why the AFL-CIO has not weighed in on one side. And it's -- you know, that, again, could sometimes affect the political equation.
REHMP.J. Crowley, here's an email from Anne Marie, who says, "What" -- well, she calls it the number one question. "Why is the oil not being refined in Alberta instead of a pipeline across two countries?"
CROWLEYOthers can chime in. I think my understanding is that building the pipeline is cheaper than placing a refinery north of the border which still has transportation issues, you know, to it. I think this was part of the calculation that TransCanada made when it proposed the pipeline originally.
REHMAt the same time, you spoke earlier of the opposing governors points of view. You've got the Republican governor in Nebraska concerned about not just a single aquifer, but the largest in this country, the Ogallala. Now, if you got leaks in this pipeline going across the Ogallala Aquifer, who's responsible for that?
CROWLEYWell, this would be a responsibility, as I would understand it, of TransCanada, both in terms of the construction of the pipeline, the pressure that is applied as the material moves through the pipeline, and then, you know, posting a financial bond in the event that there's some sort of a spill.
CROWLEYAnd, of course, in the last year, there has, in fact, been a very celebrated spill in Michigan, you know, which adds to the complexity here because you've got a track record that people can point to and say there is a legitimate concern about moving a energy source that is very corrosive through a pipeline and what that means for the environment.
REHMDr. Hansen, how do you view that?
HANSENWell, I think the basic problem is that we have this fossil fuel addiction and are importing oil. And the question is, how are we going to solve that by finding even dirtier fossil fuels and importing those? Or should we begin to move toward clean energies? And we expect from the top some understanding of this and what is needed to solve the problem and that is very simply to put a price on carbon emissions so that they pay their cost to society.
HANSENIf we did that, if we simply put a moderate but rising fee on fossil fuel emissions collected from the fossil fuel industry, and if it rose at a rate that John Larson, Congressman Larson suggested, which would amount after 10 years to about $100 a ton of CO2, that would reduce U.S. emissions by about 30 percent in 10 years, which is equivalent to 13 excel pipelines. So why should we be building pipelines when there are much more effective ways to deal with our need for energy?
HANSENAnd that's the kind of leadership that we need from our government and we're not just getting. Instead, we're just continuing to foster that addiction to fossil fuels, which now both parties recognize. President Bush said we had a fossil fuel addiction that we need to solve.
REHMMatthew Koch, how do you respond?
KOCHYeah, I just wanted to comment that, you know, I think that there's, you know, some interesting ideas there. But, you know, we're talking about a very near-term period of time it is referring to. And we have about a problem here where we need more energy in this country, and we are moving towards an economy that is looking at more alternatives and different solutions. And technologies are getting better, including with the oil sands.
KOCHYou know, we mentioned earlier the extraction method now, it tends to -- people look at it as mining, but the 80 percent of what's known -- reserves are going to be extracted through a process called in situ, which is a much smaller footprint and uses -- is much more energy efficient.
KOCHBut in addition, you know, we need about 21 percent more energy, according to the Energy Information Agency, by 2035 in this country in order to continue to move in our economy and just to -- so people can put not only fuel in their cars, but heat their homes and do their jobs and, you know, for business to grow. So we need to have that energy from somewhere and...
REHMJuliet, I understand from Matthew Koch that, by 2035, we're going to need 21 percent more energy in this country...
HANSENIt needs more energy, but that doesn't mean they need more fossil fuels.
REHM...and yet, is the oil from this project going to remain in this country? Or is it going to be sold to other countries?
EILPERINRight. There's certainly a very strong possibility that if, for example, we turned our back and we didn't construct this pipeline that they could essentially use pipelines to transport it to the West Coast and ship it from there overseas to Asia. Now, of course, that does raise the price of the oil. It would be more expensive to do that, and so, you know, there might be less of an incentive to extract it at the same rate.
EILPERINBut, you know, you obviously are dealing with the global market, and so, you know, that's definitely -- that's one of the questions that the State Department examined. And, you know, the Energy Department concluded that this oil would be extracted, even if the pipeline wasn't built. At the same time, they also pointed out that we don't actually need this oil for several years, and so they kind of gave a mixed verdict on that.
EILPERINBut, certainly, at least the administration in its analysis has concluded that the oil would be extracted even if the pipeline wasn't in place.
REHMAnd, P.J. Crowley, as you said earlier, the State Department is going to decide on whether to grant permission. And yet one of the lobbyists for it worked for Secretary of State Clinton's presidential campaign. I wonder if this isn't a problem for her.
CROWLEYIt's not a problem for her. At the time I left the State Department six months ago, my recollection is that he had never met with her, you know, since she became secretary of state. And he is now a lobbyist, you know for TransCanada. My understanding is that he has been a full participant in the process that the State Department has put forward, had the opportunity to present, you know, his side of the views, as have many others.
CROWLEYBut has she -- he has not had any contact with her and has not compromised the process at all.
REHMDr. Hansen, I understand that you feel very strongly that this country needs to become less dependent on fossil fuels. But on this particular project, what are your greatest concerns?
HANSENWell, it's the first step, first big step into developing these unconventional fossil fuels, which we just cannot do and have any hope of stabilizing climate of this century and preserving a livable planet for our children and grandchildren.
REHMHave you been part of the discussion with State Department officials on this issue? Dr. Hansen.
HANSENYou asked if I have been part of the discussion?
HANSENNot in a private way -- in a public way that everybody is aware of. I've tried to make clear what the implication of these unconventional fossil fuels will be for climate.
REHMBut here's what I don't understand. P.J. Crowley, you've just said that one of these lobbyists who previously advised Secretary of State Clinton is part of the discussion. Why isn't Dr. Hansen part of the discussion, Juliet?
EILPERINWell, I would argue that Dr. Hansen, who was arrested during protests, you know, in front of the White House recently, you know, is, in many ways, part of this discussion.
REHMBut not officially.
EILPERINBut, officially -- I would also bet that if he asked to speak to State Department officials, he would probably get an audience. But, you know, you obviously raised an interesting point. I think, you know, one thing that I should say about -- Secretary Clinton herself said just on Oct. 11 that she does not consider it a conflict of interest that Paul Elliott is a lobbyist. Again, she has not met with him.
EILPERINHe did try to meet with -- repeatedly, with her Chief of Staff Cheryl Mills, who was a colleague of his on Hillary Clinton's presidential campaign. And Cheryl Mills declined repeatedly to meet with him, but -- so it's not for the lack of trying, but he hasn't, you know, met with top advisers to Secretary Clinton. So, you know, certainly, they are pushing to get as much access as they can, although the State Department has really tried to strike a balance, and it's a tricky one because you have people on both sides.
REHMJuliet Eilperin is environmental reporter for The Washington Post. She's author of the new book "Demon Fish: Travels Through the Hidden World of Sharks," and you're listening to "The Diane Rehm Show." We're going to open the phones now, 800-433-8850. First to Galesburg, Mich. Good morning, Chris. You're on the air.
CHRISThank you for taking my call, Diane.
CHRISI hear you almost every day.
CHRISLast year, in March or April, there's an oil pipeline that runs through Michigan, and it's from Canada, owned by Canada, managed by a company called Enbridge, who, I understand, is going to manage this pipeline once it is built. They changed their maintenance schedule against the wishes of the EPA. And a rupture in their pipeline occurred a couple of months later. It's polluted a tributary to the Kalamazoo River with about 850,000 gallons of crude oil.
CHRISAnd I live on the Kalamazoo River and what used to be the equivalent of a wildlife preserve. Now, all the birds are gone. The turtles are gone. And for the last two years, we've had cleanup crews out here solid. They're out there right now, right this minute, airboats and dredges. And they have to tear up the bottom of the riverbed, which you can understand the environmental problems with that.
CHRISAnd I talked to my Congressman Fred Upton, who is in favor of this pipeline, and I asked him how much U.S. dollars, tax dollars, will go into this. He basically passed on the question, saying that that's yet to be determined. And I see the U.S. demand for oil and gasoline is constantly going down. Our alternatives go up, and nobody yet has discussed, with these tar sands, the energy necessary to distill the oil out of the sand-tar mix. I mean, everywhere you look at it, we get a few thousand jobs temporarily, but the devastation possibility is extremely heavy.
REHMDr. Hansen, I'm going to ask you to respond first, and then to you, Juliet.
HANSENYes. I should comment, though, that with regard to the earlier question, I did submit to the State Department my opinion about the fact that they are overlooking the implications of this for global climate. They're looking only, as far as environment is concerned, at things like spills, while, in fact, it has much greater implications to global climate. Now, I'm sorry. I forgot the current question, but I wanted to...
REHMCan -- well, can you speak to the extraordinary damage done, as Chris points out, with the rupture nearby in Galesburg, Mich. and the millions of dollars...
REHM...of taxpayer money for cleanup?
HANSENYeah, that -- those are certainly additional concerns that mean that it simply doesn't make sense to go this route when we know that there are alternatives that, in the long run, are cheaper and will create more jobs if we put a price on these carbon emissions to make it pay for its cost to society, and that includes these cleanups.
REHMAlternatives like what, Dr. Hansen?
HANSENWell, if you put a price on carbon, the first alternative that comes into play very strongly is energy efficiency. We're wasting so much energy. And by subsidizing fossil fuels and not making them pay for the damages that they cause to human health through air and water pollution, the kind of spills that you're talking about, but especially the long-term damage to climate that our children and grandchildren will get stuck with the bill, that will bring in -- make alternatives cheaper, energy efficiency, renewable energies.
HANSENWe will -- and there will be many more jobs associated with that. But they won't happen unless we put a price on the carbon emissions.
EILPERINI wanted to answer one of other -- one -- another point that Chris raised, which is that in terms of -- there's no question that there are greater greenhouse gas emissions associated with the extraction of oil from the oil sands. The consultant for the State Department put it at 17 percent higher over the life cycle of petroleum that was used from there. The National Commission on Energy Policy said it was a range between 10 to 30 percent. So that's definitely on the -- on that equation.
EILPERINI do think that one of the things -- this came up at a public hearing in Washington a-week-and-a-half ago. One person got up, who's in favor of the pipeline, said, raise your hand if you don't use fossil fuels for your car. Now, there were a very small number of hands that actually did go up. But one of the issues is we're particularly vulnerable when it talks about this transition to clean energy.
EILPERINYou'd really have to see a radical change to both, say, electric vehicles, which, in turn, would be powered by, say, wind and solar as opposed to fossil fuels.
REHMJuliet Eilperin of The Washington Post. We'll take a short break here. Thank you, Chris, for your call. We'll be taking more calls, emails, when we return.
REHMAnd we're back, talking about the proposed pipeline 1,700 miles from Canada to the Gulf of Mexico. Here's an interesting email -- they're all interesting -- from Terry in Northern Kentucky, who says, "Would the government be required to condemn land and forcibly take it from current landowners to build this pipeline?" What do we know about that, Juliet?
EILPERINI know that that's a debate trickling in Texas. There's been this question of what, you know, they call eminent domain and whether the government would have that authority. And that's one of the reasons why, for example, you've seen Tea Party activists who have joined forces with liberal environmental groups, like the Sierra Club, to oppose it.
EILPERINNow, I just don't know to what extent -- I know TransCanada has been offering money for some of the land, so I just -- I don't know to what extent this is a real threat, but it's certainly a perceived threat.
REHMHow do you see it, Matthew?
KOCHI would agree. I think it's my understanding, of course, that whether you're building a railroad or whether you're building a road, you know, there's certainly the opportunity and the need, at times, to use eminent domain, but usually, I understand it's a last resort. And -- but there's often a rationale there that at times they have to use it, but that's as much as I understand.
REHMAll right. Let's go to Elkhart, Ind. Good morning, Randy.
REHMGo right ahead, sir.
RANDYWhy not build a factory to manufacture plastics in -- to do -- such as you could build wind turbines out of the carbon fiber and ship them just over the border to North Dakota, South Dakota where they have the greatest wind potential of any place in the country. You could use -- build -- make plastics instead of oil and sell them without having all of the environmental consequences of a pipeline.
REHMWhat do you think of that, Dr. Hansen?
HANSENWell, there's cheaper oil if you want to make plastics, but -- and those are going to be made from fossil fuels. But the point is we also need energy, and unless we have a price on fossil fuels, the fossil fuels are the cheapest energy. So they're going to be used for that purpose also.
REHMYou know, it's interesting to me that you had two of the nation's major newspapers -- The Washington Post, The New York Times -- coming out on opposite sides of this issue, The Washington Post being in favor. Rejecting the pipeline, it said, won't reduce global carbon emissions or the risk of environmentally destructive spills. Asia will take the oil if America doesn't.
REHMThe New York Times, on the other hand, said the pipeline is going to help reduce America's dependence on oil from politically troubled sources in the Middle East. What pipeline advocates failed to mention is that much of the Tarzan's oil would be refined on the Gulf Coast is destined for export. Fair statement, Juliet?
EILPERINThere's no question that some of the oil, that would be refined in the Gulf Coast, would be exported.
EILPERINYes. And, you know, we've asked, for example, Valero, one of the major refineries that is doing it, and they certainly say it could be in the range of -- I believe the numbers they were using was 6 to 18 percent, so -- and that's also where we are. Now, it could change over time, so there's no question that not all of that will stay in the United States. And that's according to the oil refining...
CROWLEYThis functions within the context of global markets. I mean, I -- and we do frame this issue in either-or terms. And the answer is we have to do both. In the short term, we are heavily reliant on fossil fuels, and we need to find additional sources because energy consumption is growing in this country, and it's growing in countries like China and India. So the cushion that did exist in the energy markets for a number of decades is much, much tighter now, and that -- we see that in the fluctuations of price.
CROWLEYWe do, in fact, have to make this pivot over time, and, unfortunately, you know, this pipeline project exists within the context of political paralysis, not just in Washington but elsewhere where we have failed to pass an energy -- comprehensive energy legislation to meet our Copenhagen targets and to begin this process of reducing greenhouse gases, even as we look for renewable sources of energy.
CROWLEYThe answer is we have to do both, and, at some point, we got to blow through the current political gridlock that seems to continue to frame this in an either-or proposition.
REHMBut, on the other hand, to you, Dr. Hansen, if we continue to keep doing both, aren't we going to remain dependent on the energy produced by fuel fossils?
HANSENThat's exactly right. And as I've already stated, we could gain much more equivalent oil with the moderate price on carbon emissions and let the marketplace decide on the alternatives to fossil fuels. But unless we begin to go down that path, we're just going to continue to find dirtier and dirtier fossil fuels.
KOCHI just -- you know, I would have to say that that's, you know, again, certainly an interesting idea, but, you know, in the short term, we have an economy that's suffering right now. We have a demand and a need for more energy over a few decades here. We are looking, and we've been funding and looking at a lot of research. And I think there's a lot of hope and a lot of interest and progress being made in alternatives, but we...
REHMBut explain to me how this pipeline is going to help our economy in the short term.
KOCHIn the short term, as we mentioned, there's the jobs, as we've discussed. There's a lot of investment being made by a company that's going to build this pipeline, and there's a lot of manufacturing jobs. It's also -- there's going to be a tremendous benefit within a short period of time of this oil coming to this country and helping create some additional supply.
REHMI'm really concerned about the vast distance between the job numbers claimed and the job numbers that the company itself is saying will be created. Big, big vast expanse between 2,500 and 20,000.
KOCHOkay. We -- you know, I've tried to make clear that, you know, the numbers that, I think...
REHMBut is the company itself making this statement?
KOCHI also pointed to a study done by the Canadian Energy Research Institute, CERI, that's been done a few times. They did one most recently this past spring that points to not only 20,000 -- potentially 15- to 20,000 jobs in this country related to the pipeline, but also, if you look, step back to additional -- the oil sands development itself, there's about 80,000 jobs in this country right now dependent on oil sands development in Canada.
KOCHCompanies like Caterpillar and a number of other major manufacturers, all the way down to smaller manufacturers, just about every state that are supplying equipment goods and services up to Alberta and to places in Canada, and then, in the long term, if this pipeline is developed and this oil continues to be developed, there's a potential for upwards of anywhere from 95,000.
KOCHThat number going from 80- to 95- to 600,000 jobs, potentially, you know, over about a 35-year period, and that's a tremendous economic boom for our country. And, you know, again, we're in this period where we're looking for alternatives, where we're looking to a point where we can transition to them. But in the short term and, you know, for the next few decades, at least, we're going to continue to need fossil energy.
EILPERINI think part of the discrepancy in the Cornell report, which is what you're referring to, is that certainly in that analysis, they were using assumptions about how gas prices, particularly in the Midwest, might potentially rise if you allow that crude oil to come down and so that -- basically, that would have ripple effects that would actually cost jobs. So part of what they were factoring in is, would there actually be some jobs lost?
REHMI, as a homeowner in that area, would be particularly concerned if eminent domain were executed and my property simply destroyed or taken away, wouldn't you, P.J.?
CROWLEYOh, positively. And I think this is where those who will be directly influenced by this pipeline need to be assured that the, you know, TransCanada and its -- those entities that will be responsible for the pipeline have to step up to both, you know, maintain the project well, but also be there in the event that something goes wrong. You know, obviously, you know, that was the, you know, the case of BP.
CROWLEYIt struggled, you know, to meet its obligations, but at least, financially, has put up a substantial amount of money to make sure that the impact of the oil spill in the Gulf is remedied.
REHMThere's also another deal in the works to create America's largest natural gas pipeline, Juliet.
EILPERINRight. The Kinder pipeline, which was just announced, and that -- you know, that speaks to another phenomenon in the energy field, which is this idea that we do have tremendous natural gas supplies that we can tap into through shale gas and hydraulic fracturing, which we haven't done before. And it raises these questions of another source of fossil fuels that we're beginning to exploit in greater amounts.
REHMJuliet Eilperin of the Washington Post, and you're listening to "The Diane Rehm Show." And now to DeKalb, Ill. Good morning, Andrew.
ANDREWHi, Diane. I'm a long-time fan of yours. I've been listening for years.
ANDREWMy question was for the proponent of this pipeline. And, you know, I've done some research, so I kind of have a good a idea about this. But how long is this oil going to last? And, on top of that, how long are the jobs going to last? And you can sum up these numbers all you want, but it seems like it's cooking the book to say that the jobs are going to last 35 years, you know? There's no way it's going to happen.
CROWLEYWhat I'm speaking to is, I mean, those initial job number that's related to the manufacturing and construction of the pipeline. Then you look at the additional benefits of oil science development, both related to the pipeline and the development itself that are related to maintenance and the other issues that associate with the pipeline, but also the benefit from the oil back to our economy.
CROWLEYAnd, in addition, with oil science development, you would do -- as I mentioned, have a number of manufacturers throughout the country that are supplying goods and services up to Canada in those -- in that boon that's happening up there.
REHMDr. Hansen, any comment?
HANSENWell, again, it's a question of short term versus long term. We need to understand what the implications of this are on the long-term, and, clearly, the costs far exceed the short-term benefits. And that's why we need leadership, and it's what we've been lacking, is leadership at the top, which (unintelligible) explanation of why we need to go toward clean energies.
REHMSo here is a posting from Facebook. "What would be the likelihood that the companies would get the oil to the Gulf and the refiners -- the refineries then load it onto tankers and ship it to the world market not really, specifically, benefiting us here in the U.S.?" P.J.
CROWLEYWell, I'm not an economist, but, obviously, you have an economic benefit to Canada. You have an economic benefit in terms of fulfilling some of the capacity. The spare capacity does exist in refineries. So even if the oil is not consumed just in the United States, there is an economic benefit, you know, to meeting the global energy demand. The -- you know in the short-term, the more energy is produced, you know, there is an economic benefit from that.
CROWLEYBut, again, I mean, we look at -- there's another type of jobs that, you know, the administration has been promoting, which is green jobs. So, of course, absent the kind of long-term, adult conversation on energy issues that we desperately need, you've got a situation, the short term, where the -- as part of the stimulus, the Obama administration has put money into, you know, creating a commercially viable, alternative energy sources, and yet it's getting raked over the coals, you know, for one loan that went bad.
CROWLEYSo, ultimately here, in the short term, we do need to find, you know, additional energy sources using fossil fuels. In the long term, create viable alternative energy sources and do both.
REHMIn fact, the president is losing his base over this issue, Juliet.
EILPERINRight. I mean, it's hard on -- I think as, you know, everyone here has pointed out, you have the problem that you don't have the price on carbon that the president had asked for, that Dr. Hansen is talking about. And one thing that's very interesting, that environmentalists are saying to me, is that it's not enough that the president has supported clean energy.
EILPERINThey want him to oppose things like Keystone because they feel like, unless you affirmatively block the exploitation of these kinds of fossil fuels, you don't have a chance to have the expansion of clean energy at the rate that they're asking for.
REHMYou've got a chief executive of CREDO Mobile, Michael Kieschnick...
REHM...apparently who donated $4,600 to the Obama 2008 campaign, he was arrested during this last round of White House demonstrations.
EILPERINAbsolutely. And he was one of a few different donors that I've been quoting in recent pieces. It's amazing. Some of these people who you absolutely maxed out to the president in 2008, have given hundreds of thousands of dollars to the Democratic Party in recent years, including the head of CREDO Mobile, saying we will not give a penny unless this pipeline is blocked by the Obama administration.
EILPERINBecause, unlike tough things like climate legislation, this is a decision that, at the end of the day, whether the Secretary of State makes it, whether President Obama makes it or whether a deputy within the State Department makes it, this is the Obama administration's decision to make.
REHMSo whose responsibility is it in the end to make this decision, P.J.?
CROWLEYIt will depend. The president...
REHMThere's always a hedge here?
CROWLEYNo. No. No, no. The president has delegated the responsibility to the Secretary of State. It is a process that she is overseeing through, you know, the bureaucracy within the Department of State. There are aid agencies that are being asked to comment on the national security determination. If the aid agencies support a decision, that decision will be made by the Department of State.
CROWLEYIf any one, or a combination of agencies, protests the recommendation of the State Department, then the decision -- that protest will be heard by the president.
REHMAnd what's the business community going to do if this does go through?
KOCHWell, I certainly think there's going to be a lot of concern, and, you know, obviously, there's a strong desire to make this investment. There has been a very thorough process of about three years, you know, by the State Department looking at the permit. TransCanada has been working very closely with the State Department.
KOCHAnd I think there'll be a lot of concerns. It sends that real signal that, you know, you're looking at probably one of the biggest projects, if not the biggest project that could be developed in that short term in this country and a massive amount of investment that could be made and jobs into the economy by the private sector. I think it would be very troubling as well as, you know, some of those industries are looking to signal about where are we going to get our energy from the future.
REHMDr. Hansen, is this going to go through or not?
HANSENI don't know. That's a big question. I'm very much afraid that this current overriding emphasis on jobs is going to cause us to make a decision which is based on the short term rather than the long-term interest of young people and nature.
REHMThank you very for joining us, James Hansen, P.J. Crowley, Matthew Koch, Juliet Eilperin. Thanks for listening, all. I'm Diane Rehm.
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