High gasoline prices are unpopular in America. For green politicians and activists, public anger over high gas prices has long been both a challenge and an opportunity.
It’s a challenge because greens advocate carbon taxes and cap-and-trade, which are designed to jack up gas prices, and biofuel mandates, which have the unintended (although not unforeseen) consequence of inflating fuel costs.
It’s an opportunity because angry people want someone to blame, predisposing many to believe green propaganda that oil companies collude to “manipulate” markets, “gouge” consumers, and amass “obscene” profits. The Federal Trade Commission’s most recent major investigation found no evidence of such skullduggery, BTW.
Since the only logic behind the anti-KXL campaign is political, we should not be surprised that greens denounce the pipeline both because it will increase gas prices — and because it will lower them!
For years green activists told us that, in addition to wrecking the climate system, the KXL will — horror of horrors — increase Midwest gasoline prices. Department of Energy analyst Carmine DiFiglio handily debunked that theory. It’s not my purpose to review the issue here. The point rather is that Tom Steyer, Bill McKibben, Sen. Ed Markey, Carl Pope, NRDC, and other prominent Keystone foes warn that the pipeline will raise gas prices — as if they consider that a very bad thing.
This week, however, Keystone opponents are abuzz about a new study warning that the KXL could be ‘worse than we thought’ because it could increase global oil supply and, thereby, lower gasoline prices. Lower prices = more consumption = more carbon dioxide (CO2) emissions.
Specifically, the authors, Peter Erikson and Michael Lazarus of the Stockholm Environment Institute, estimate that if all 830,000 barrels per day (bpd) of oil flowing through the pipeline is additional oil in the global supply, KXL would lower global oil prices by $6 per barrel (see chart below). Consumption would then increase by an additional 0.6 barrels for every barrel produced, which in turn would increase global carbon dioxide-equivalent (CO2e) emissions by 110 million metric tons per year. That’s about four times the emissions increase (27.4 tons) in the high-end scenario of the State Department’s January 2014 Final Supplemental Environmental Impact Statement (FSEIS).
Erikson and Lazarus begin and end their study by quoting President Obama’s announcement that the decisive question for him is whether the KXL would “significantly exacerbate the problem of carbon pollution.” They fault State’s FSEIS for ignoring the KXL’s potential impacts on global petroleum supply and prices. They obviously hope their study influences Obama’s decision.
It does not deserve to. The authors acknowledge having no “new insights” on how much additional oil sands extraction KXL would induce. More importantly, even if KXL did increase incremental emissions by 110 million tons annually, it would still not “significantly exacerbate” the alleged problem of carbon “pollution.”