In the context of Russia's invasion of Ukraine and a still stagnant economy, President Barack Obama faces two important questions on energy transmission: a decision on the construction of the Keystone XL oil pipeline and the question of increasing American natural gas exports. These are choices that will resonate from Crimea to Cove Point. In my judgment, the president should reject Keystone and step up natural gas exports. Here's why.
The right analytical framework for these decisions has several component questions: what's consistent with our environmental and energy policy objectives, what's in our economic self-interest, and what serves our geopolitical goals. Keystone fails each of these tests, while increasing natural gas exports passes them all.
In the United States, Russia's invasion of the Ukraine has sparked another round of calls for approval of the Keystone XL pipeline, a 1,100 mile conduit that effectively connects Canadian oil fields to the Gulf of Mexico. Keystone XL is not the answer. Oil is largely our energy past, and Keystone does little to respond to the actual challenges and opportunities before us.
The process to generate energy using the Canadian tar sands is particularly dirty, producing one of the most noxious fossil fuels on the planet and leaving a devastated landscape in its wake. Keystone XL also exposes a huge swath of the continent, including much of the water table, to a persistent contamination threat. We incur this environmental cost at very little economic benefit. According to the State Department, Keystone XL would create 35 permanent jobs. Moreover, there's no evidence that the project will produce any secondary benefits to our economy. The oil is produced in Canada, shipped across the U.S., and then shipped out into the world oil market.
Increased natural gas exports, on the other hand, serve the national interest of the country on all three questions: the environment, the economy and geopolitics. Natural gas is a central economic opportunity for the United States, it creates a bridge to the cleaner energy future we envision, and exports will help key strategic allies in Europe.
If done properly — with high standards and the approval of local communities — natural gas can be extracted and exported in a safe manner. As we respond to climate change and work to utilize more clean energy sources, it makes sense to emphasize natural gas. Natural gas is the cleanest fossil fuel, producing less carbon than either coal or oil. According to the EPA, natural gas also produces less nitrogen oxide and sulfur dioxide than hydrocarbons, as well as only negligible amounts of mercury compounds.
Increasing natural gas exports is also good for the American economy. The United States is now the leading producer of natural gas in the world. However, dominance is not guaranteed, and without engaging the global market, we may soon be overtaken by both Russia and China. In the last decade, a natural gas jobs boom has been essential to our economic recovery. Increased exports will help sustain and expand middle-class energy jobs. We should build on this legitimate momentum: The natural gas export facility at Cove Point in Southern Maryland will produce more permanent jobs than the entire Keystone XL pipeline.
Rather than choosing a superficial solution with the Keystone XL pipeline, President Obama should do two things immediately: One, speed up the Department of Energy approval process for new coastal terminals, including Cove Point; and two, expand the list of countries where we can sell natural gas, focusing on Europe.
By becoming a true player on the global natural gas market, the United States can restore needed geopolitical balance for our allies in Europe. Russia's regional energy dominance has given the country an outsized influence. Russia's agenda, which is paid for and brandished by Russian natural gas, is not aligned with that our national values or those of our closest allies.
The peaceful and prosperous Europe we've long been committed to needs a competitive energy market that includes American natural gas. Smoothing out the distorted energy market in the long-run will weaken Russian hegemony.
In 1848, John Stuart Mill wrote that increased international trade is "the principal guarantee of the peace of the world." Mill's view certainly holds today, when, ironically, the ideals of political freedom he championed are now in desperate peril.
For our environment, our economy and our allies, we should reject the Keystone Pipeline and move forward on natural gas.
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