There’s an old saying that “you can’t have it both ways.” Well, in terms of energy, we must insist upon it.
Energy must be reliable and affordable as well as environmentally responsible. Recent energy coverage has focused on new, expansive access to federal land for oil and gas exploration, as well as investment in a protracted oil and gas pipeline project in Canada by the U.S.-based company Kinder Morgan.
{mosads}First, the current administration is making large new tracts of federal land available for oil and gas exploration and production. On the surface, this is a bullish declaration of the energy dominance strategy that aggressively promotes greater U.S. oil and gas supply and a strengthening of our energy portfolio. Is it all good? We must question the urgency or even the need.
Technology has unlocked tremendous gains in already existing oil and gas tracts, much on private land, in an economic and environmental landscape that demands productivity and performance.
With a sustained commitment to advanced technologies in this market, we can continue to achieve productivity gains, meet market demands, compete strongly in a global marketplace and not require exploration on federal lands we have previously committed to preserve for our future.
But what is ironic, for those who believe it necessary, is that in the current price environment, the selling of this land has attracted very few buyers and those who have bid have done so at a very low price. Wrong time to sell anyway!
Good intentions for energy dominance, bad signal that technology is not our real future, and ugly results in terms of environmental footprint or any meaningful revenue impact to our citizens at a time when vast new tracts of land are patently unnecessary. It’s bad business and bad environmental stewardship.
Protecting our environment is essential, for sure, but let’s examine the coverage of Kinder Morgan’s Canadian pipeline project structured to transport oil sands crude to the Pacific Coast for export. Kinder Morgan has invested nearly six years in permitting and development time, was greenlighted for the project and broke ground on a multibillion-dollar effort six months ago but is now stopped due to “environmental concerns” that are highly politicized in Canada.
Environmentalists might argue this is good, but the reality is the most environmentally responsible manner to transport crude oil is by pipeline. Spillage and impact are far greater by truck or railcar, so this is not real concern about the environment but a politicized move to block already permitted investment.
The good news here is that Kinder Morgan followed the proper process and rule of law. It did the compliance work and received permits for right of way and construction, and jobs were created and manufacturing orders placed.
But how can industry and the market succeed when rule of law and process do not matter? Uncertainty stifles investment, growth and jobs. And we all know this is not the first pipeline that has been impacted by Canadian (or U.S.) politics. It’s bad for business and ugly for investment, and we lose trust and efficiency in the market.
Energy sustainability is a commitment to accessible and reliable energy that is also affordable and environmentally responsible. We must have it both ways, because that is what real sustainability is all about.
Charles McConnell is executive director of the Energy and Environment Initiative at Rice University and a former assistant secretary of energy at the Department of Energy from 2011 to 2013.