The Keystone XL oil pipeline is a proposed project to install a 1,700-mile tunnel of oil stretching from the oil sands of Northern Alberta, Canada south to the Gulf Coast of Texas. This project has presented massive conflicts of interest throughout its volatile shelf-life.
Politically, it represents the crux of energy security in the United States and promotes the expansion of oil drilling throughout the country. The pipeline will strengthen the partnership between the US and Canada, an alliance strongly encouraged in Congress, where many are anxious to divest from US dependence on other foreign oil. From a financial perspective, the XL project signifies a spike in employment opportunities and stands to boost the American economy.
Environmentally, the pipeline is cause for serious concern. It threatens to cut through large swathes of lands and will be transporting poisonous materials at an enormous rate; as much as 830,000 barrels per day, according to a November 2012 report from the Congressional Research Service. The corrosive effects of these chemicals has yet to be fully researched. The project also has the capacity to reel in sizeable profits for its corporate and private investors. These issues, and particularly the collusion of conflicted interests, have not received the detailed attention they deserve in the American mainstream media.
As the New Year rapidly approaches, so does a decision about XL’s future. TransCanada, the company behind this project, is seeking a presidentially-approved permit. Today, the company anxiously awaits consent from the American government while their multi-billion dollar project hangs in the balance.
Keystone XL has deep-pocketed advocates who promote this project as the right choice for American consumers. However, opponents have proved to be strong and steadfast. The latter include environmental activists, concerned community members, and Native American and First Nations tribes – whose lands, water and fishing rights, and livelihoods would be negatively affected by the pipeline.
The debate has all the requisite ingredients for an industrial-age drama of American progress and innovation. “On the surface,” a recent Politico piece points out, “it’s a choice between the promise of jobs and economic growth and environmental concerns.” The Pipeline and Gas Journal has estimated that the XL pipeline will have a substantial impact on job creation. However, such a simplified understanding of issues raised by the Keystone project threatens to dilute its complexities and obscure numerous competing interests at stake in its completion.
The drama of the oil pipeline seems familiar: a decision that must be shouldered and resolved by those at the top and that puts progress before health, land treaties, and the environment. The script: we must move on. The job must be done. Reflect on the consequences but do not linger there. Instead, concentrate on the massive employment opportunities and job security that are being promised.
Susan Rice, American Ambassador to the United Nations and Obama’s candidate for Secretary of State, owns between $300,000 and $600,000 worth of stock in TransCanada, according to financial disclosure agreements filed in May of 2012. Why is this significant? The State Department officially oversees transboundary pipelines and ascertains if such pipelines would be “in the national interest.” This means the final determination- nay permission- for any oil pipeline to touch or cross US territories is granted by the Secretary of State. Ms. Rice’s business investments, as well as those of others in government, stand to benefit considerably from approval of Keystone XL.
The Business of Geopolitics
In December 2011, Senator Richard Lugar (R-IN) introduced a bill entitled The North American Energy Security Act, also known as The Lugar Energy Initiative. Passage of this act would have required the president to issue a permit for the Keystone XL project within sixty days. At a press conference Lugar asserted that "Keystone XL is a win for jobs, a win for our economy, and a win for our national security." He then declared, "Further delay [on issuing the permit] is irresponsible," and warned, "If the President and Majority Leader aren’t willing to let private investors jumpstart the economy, then it’s time they get out of the way.”
What makes the pipeline a matter of National Security, and one that needs saving by white knight private investors?
According to Daniel Kish, a senior vice president for policy at the Institute for Energy Research, the XL project is critical to American energy security. He claims it will assist, for example, in "detecting and preventing terrorist attempts to compromise our electricity grid..." Yet Kish’s claim lacks an explanation of how the pipeline would detect and prevent such attacks. He states that Keystone XL’s development would also mean an additional 700,000 barrels of Canadian oil every day for U.S. refineries. Kish states that such an amount would end our daily "need for crude oil from Oman, Chad, Algeria, and Iraq combined." This perspective offers a tempting occasion to concede support for the pipeline by inserting a familiar trope: the fear of American dependence on particular foreign oil states and the insecurity that produces.
Kish goes on to say, "Until the pipeline is active, American consumers are sending these countries approximately $70 million every day to purchase oil that we could be getting from our closest neighbor and trade ally, Canada." He concludes, "Decreasing our energy dependence on these overseas sources makes good sense for our economy and our national security." Linking discourses on terror and terrorism to American consumption of foreign oil is a common tactic in public and political dialogue. Kish neatly ties together the image of “overseas oil sources” to the idea that these sources threaten US “national security.” His statements jump to this assumed conclusion easily but omit pertinent evidence that would substantiate such a link. An example of this can be found in the text of Lugar’s National Energy Security Act. Before stating that Keystone XL will create jobs in the US, the bill “declares the sense of Congress that the United States must decrease its dependence on oil from countries hostile to its interests.” The bill does not list which countries are considered hostile to US interests (or what those interests are).
According to the National Energy Security Act bill, “The development and delivery of oil and gas from Canada to the United States is in the national interest of the United States in order to secure oil supplies to fill needs that are projected to otherwise be filled by increases in other foreign supplies, notably from the Middle East.” The political players who advocate for the Keystone pipeline seek to spread the notion that terrorist threats to the US are caused by foreign countries (in the Middle East). American trade with Canada is, by contrast, cast as domestic and non-threatening.
Oil Sources and (Lack of) Historical Context
The rhetoric deployed to promote Keystone XL bolsters the construction of Middle Eastern states as major problems in the collective American consciousness. But oil history is much more complicated than discourses on “national security” might have us believe. The very real effects of European colonialism and American imperialism in this region produced the rising costs of such oil’s procurement.
Today, it seems, government mouthpieces propound US-Middle East relations to oil as ahistorical, especially in a post-9/11 America where racism toward Arabs and Muslims is more pervasive than ever.
In reality, the United States has been heavily involved with oil-rich lands in the Middle East for almost a century, and still shares a deeply-rooted strategic partnership with Saudi Arabia. Attempts to link the desire for locally-produced oil and its necessity for US national security will unravel under critical scrutiny. Following this logic, support for the XL pipeline is couched between “hostile interests” from “overseas” oil sources and the perpetuation of US livelihoods. Dissenters of the pipeline are constructed as unpatriotic, an implied accusation that calls one’s national loyalty into question. This logic, however, lacks a broader political framework and amounts to little more than the conjured historical vacuum favored by many political pundits.
In 1933, the United States and Saudi Arabia made a concession agreement that led to the 1944 formation of Aramco, the Arabian American Oil Company. Aramco gave the United States exclusive rights to transport oil from Saudi Arabia. In turn, this agreement acted as a stabilizing force in the formation of the Kingdom of Saudi Arabia. Aramco’s history in Saudi Arabia is often romanticized. In his America’s Kingdom: Mythmaking on the Saudi Oil Frontier, Robert Vitalis discusses the sharp racial distinctions within the company and points to the severe mistreatment of Arabs, especially in terms of their harsh living arrangements and lower wages compared to European and American employees.
By the mid-1950s, workers were staging strikes to protest their exploitation and neglect. In order to distance themselves from these issues, the US Embassy in Riyadh claimed the demonstrations were communist inspired. The American government began to fear the nationalization of Aramco and warned such an initiative would negatively affect profits. Vitalis exposes the romanticized histories of the Aramco enterprise as a series of myths constructed on behalf of private investors, mainstream newspapers, and popular media.
Accusations that dependence on Middle East oil sources are threatening US national security can be further understood in relation to anxieties over China’s economic ascendance. Suspected Aramco plans to “reroute” oil to China has only fueled attempts to push through presidential approval for the Keystone pipeline project.
The US also has tapped new domestic reserves in oil and gas using methods such as hydraulic fracturing (fracking). Fracking is part of a process that allows for large quantities of natural gas to be extracted quickly and inexpensively. It helps stimulate wells that are horizontally drilled into geologic formations (such as shale rock). Unfortunately, despite claims that the US is on its way to being “all but self-sufficient” in meeting its energy needs, extracting energy from these new reserves requires methods that are highly problematic and environmentally disastrous. For example, hydrofracking sites produce billions of gallons of toxic wastewater, much of it laced with deadly amounts of methane, arsenic, and other chemicals, which are not properly disposed of or managed. The effects of fracking have caused earthquakes and poisonous ozone, drinking water contamination, and a plethora of illnesses.
Domestic Conflicts of Interest
The United States Office of Government Ethics explicitly states that executive branch employees are required to recuse themselves from any matters that “have a direct and predictable effect on the employee’s own financial interests or on certain financial interests that are treated as the employee’s own.” As reported in the New York Times, Ms. Rice and her husband earned between $7,500 and $25,000 on their investments in TransCanada in 2011. Further, Ms. Rice and her husband own at least $1.5 million worth of holdings in Enbridge, a Calgary-based oil company that has received permission to begin its light oil market access program. Crude oils differ in terms of characteristics, quality, and market penetration. Prices also vary depending on the type and desirability of the oil. The Enbridge program will bring an additional 400,000 barrels per day of light crude to refineries in Ontario, Quebec and the U.S. Midwest. Enbridge, however, was heavily criticized by environmental groups after a 2010 pipeline oil spill dumped more than 840,000 gallons of oil near Marshall, Michigan, leading to the closure of a 39-mile stretch of the Kalamazoo River.
Although Ms. Rice has not yet been formally nominated as Secretary of State, she is known to be among the top candidates. If she is confirmed by the Senate, her stock holdings, which present a conflict of interest in the XL pipeline case, would need to be sold off or divested from in order for her to be in ethical compliance. Erin Pelton, a spokesperson for Ms. Rice, sent an email on the Ambassador’s behalf that reads, “Ambassador Rice has complied with annual financial disclosure and applicable ethics requirements related to her service in the U.S. government and is committed to continuing to meet these obligations.”
Ambassador Rice is not alone in her business attachments to the Keystone pipeline. Current Speaker of the House John Boehner (R-OH) has been one of XL’s most devout supporters. He also has invested up to $50,000 in each of seven firms that have a stake in Canada’s oil sands regions and he has received more than $1 million from fossil-fuel companies, according to climate activist Bill McKibben as reported in The Washington Post. When questioned about these private investments, Boehner’s spokesperson, Michael Steel replied that an “investment advisor” chooses Boehner’s financial holdings while Boehner himself “doesn’t have any control over day-to-day trades, so there’s no conflict of interest on this or any other investment.”
Ultimately, the National Energy Security Act did not pass in the Senate and was deferred by President Obama, much to Senator Lugar`s chagrin. “The pipeline will be built, President or not, State Department or not," Lugar pronounced in March of 2012. "The American people want it and our security demands it,” he declared. President Obama chose to postpone the decision until after the 2012 elections, which are now over, further fuelling the Keystone debate. Approval and construction of the pipeline would indeed create immediate job openings; it would also yield billions of dollars of profit for private investors.
If Susan Rice becomes the next Secretary of State, what is at stake in her support of the XL pipeline and what is at stake for her Congressional colleagues? If Rice is not chosen or confirmed, who will be cast in this role and how will his or her interests factor in to the final word on XL’s passage?
Partners, Interests, Government Whitewashing
Although the State Department has final say on XL’s approval, there are other actors involved with their own sets of (often clandestine) aspirations. Fortunately for the State Department, the National Environmental Policy Act (NEPA), signed into law in 1970, allows federal agencies to “farm out” environmental impact studies by hiring private contractors. This Act paved the way for federal offices to shirk their obligations in assessing or monitoring sensitive projects.
By allowing public agencies to hire private ones, government offices have permission to find an independent contractor who will comply with their will. The private company then releases its `uncompromised` findings in a report called an Environmental Impact Study (EIS). Since the government hired a compliant contractor, the results of the environmental report will align with government interests. The hiring party then follows advice offered in the report’s findings. If and when they are questioned about environmental safety concerns, the hiring party can rely on the EIS to support its project. The hiring process coupled with a compatible EIS acts as a veritable safeguard against any incoming challenges to the government’s choice of whether to approve the sought-after project.
For example, if the Keystone XL impact study releases results that assert minimal negative effects on the environment, then such results would also provide a convenient pretext with which the State Department can rebuff public criticism by hiding behind this “objective” third party opinion. John B. Echeverria, an expert in environmental law and acting director of the Environmental Law Center at the Vermont Law School, describes this process as “outsourcing government responsibility.”
Enter XL supporting actor Cardno Entrix, a self-described “professional environmental consulting company” that was hired by the federal government to research the impact of Keystone XL. The State Department allowed TransCanada to solicit and screen bids for this environmental study. TransCanada vetted Cardno Entrix and the State Department complied, hiring the company at TransCanada’s recommendation.
Under the 1970 Environmental Policy Act, contractors should specify that they “have no financial or other interest in the outcome of the project.” But according to Oliver A. Houck, a law professor and expert on NEPA, Cardno Entrix “should never have been selected to perform the environmental study on Keystone XL because of its relationship with TransCanada” and “the potential to garner more work involving the pipeline.”
Not only did Cardno Entrix previously work on projects with TransCanada (and describe the pipeline company as a “major client” in its website`s marketing materials), it also offers a broad range of environmental-related services. These services include oil-spill cleanup, strategic advice on “complex environmental and natural management challenges,” water resources management, and environmental liability, permitting and compliance. Since the company has worked with pipeline businesses before, it is also likely they would be hired to assist in any future oil spill responses. Mr. Houck added that Cardno Entrix had a “financial interest in the outcome of the project,” and the company’s “primary loyalty is getting this project through, in the way the client wants.” Rather unambiguously, the findings of Entrix`s study, published on a government website, explain that “limited adverse environmental impacts” would occur if operated according to regulations.
Further, Cardno Entrix organized public hearings on Keystone XL for the State Department and opened up the XL project proposal to public comment until Sunday, 2 December, at midnight. The State Department`s website directed all comments and questions from the public about the findings to a Cardno Entrix email address. Yet it was TransCanada who recommended Cardo Extrix, which prompted the State Department to hire the agency.
Interestingly, Cardno Entrix forwarded all questions about its involvement and interests in TransCanada and the XL oil pipeline to the State Department. So if public comments regarding the results of the environmental study are being referred to Cardno Entrix, while questions over Entrix`s investment in TransCanada are being sent to the State Department, then where are key locations for governmental and private oversight and who can the public turn toward for accountability?
Echeverria, the environmental law expert, elucidated a shameful and disappointing reality of the 1970 Environmental Policy Act: “What’s normal is deplorable, and it’s NEPA’s dirty little secret.” Legal experts have stated that it has become commonplace for “companies applying to build government projects to be involved in assigning and paying for the impact analysis.” It is even believed that “such arrangements are nearly inevitable because federal agencies typically lack the in-house resources or money to conduct these complex studies.” In theory, NEPA protects against such conflicts of interest; in practice, it fails miserably.
The Art of the Steal
Such duplicitous behavior, sanctioned by the federal government, can be directly related to the controversy over “reconstruction” bids in occupied Iraq. In 2004, the United States awarded a $1.8 billion reconstruction contract to the San Francisco-based engineering company, Bechtel. According to several news reports, watchdog groups monitoring reconstruction bids have “criticized the awarding of the contracts [to Bechtel] because they sidestep Iraqi contractors.” Several Iraqis have also complained that “US officials have let engineering firms associated with the former Iraqi regime enrich themselves via the deals.” Further, it has been reported that some seventy U.S. firms with strong connections to the Bush administration have won at least eight billion dollars worth of reconstruction contracts in Iraq and Afghanistan in the past two years. And “almost 60 percent of the 70 companies” had employees or board members who either served in or had close ties to the executive branch in Republican and Democratic administrations, as well as to members of Congress, and at the highest levels of the military.
Reconstruction contracts in occupied Iraq were awarded through three sources: the US Army, the United States Agency for International Development (USAID), and the Coalition Provisional Authority (CPA). Critics have condemned USAID for awarding Bechtel “such lucrative work” while having ties to the company through prominent Republicans, such as former Secretary of State George Shultz, who then served on Bechtel’s board. In fact Riley Bechtel, CEO of the company, was appointed by President George W. Bush to the President’s Export Council, an influential economic advisory panel. Bechtel also has been exposed for profiting after wars and for disregarding the rights of Iraqi people.
With artful usage of NEPA, the Keystone XL oil pipeline has been endorsed by the three parties involved: TransCanada, Cardno Entrix, and American public and private investors. Greed and corruption undergird the financial interests of much American oil business, and Keystone is no exception. According to TransCanada’s own data, a mere eleven percent of the construction jobs on the Keystone I pipeline in South Dakota were filled by South Dakotans – and most of the jobs were for temporary, low-paying labor.
Environmental Terrorism and US Complicity
By probing and traversing the complex and duplicitous terrains in and around the Keystone XL oil pipeline, it is obvious that much more is at stake than an increase in job creation. As Politico explains, the fate of the pipeline has also become “a proxy for a much broader fight over American energy consumption and climate change…” Risks of environmental disaster are a virtual guarantee if oil is spilled. Diluted bitumen is a mix of liquid chemicals added to bitumen (the core ingredient in this form of crude oil). Commonly referred to as “dilbit,” this oil is known to be highly corrosive and to cause irreconcilable ground and water damage if not properly contained. When dilbit spilled into the Kalamazoo River in 2010, its parts separated. The heavy bitumen sunk to the bottom while the added liquid chemicals evaporated. Under federal law, pipeline operators are not required to reveal what they are carrying, so officials were unaware that diluted bitumen was being transported until over a month later. Have the 2010 Enbridge disaster and BP oil spill already become a faded memory in the collective consciousness of Keystone supporters?
To help elucidate this point further, we need only look to the recently concluded UN COP18 Climate Change Conference, which had little progress to report. World leaders met from 27 November to 7 Decemberin Doha, the capital of Qatar, in order to address serious threats to the earth’s climate. Qatar was chosen to host this Conference amidst fierce competition from South Korea and other Asian nations. There have been strong demands by the Global South to keep the location of the COP18 Conference away from the usual Northern cities such as New York or Geneva. Qatar also represents “financial potential,” as it is a site of “rampant consumerism and consumption,” according to a recent Jadaliyya article.
The author states that Qatar is a country “whose political, economic and social forms of governance- to say nothing of its energy-intensive construction boom and mall culture- is the antithesis of imagined new forms of environmentalism.” It is more than an ironic twist that Doha was chosen to hold the COP18. The city stands as a reference point for centuries of “environmental and social relations unleashed by the European industrialization and colonial processes,” which the Global North is now seeking to rectify on its own terms.
Unfortunately, although not unsurprisingly, the delegates continued to procrastinate on an agreement for immediate action to aid in environmental protection. In response to such complacency, many world leaders (including President Obama) received messages of anger and bitter disappointment from their constituents. Wealthy nations and those responsible for the largest carbon emissions in the world seem to be more focused on the issue of compensation rather than termination. The agreement for affluent nations to remunerate “less developed,” poorer states (who have had to bear the brunt of these deadly emissions) is not expected to go into effect for at least another year, according to recent reports by The Telegraph. Wealthy economies continue to refuse to stop or significantly decrease their carbon emission output.
It is our public responsibility to challenge the motives of compensatory restitution and to examine its results. Compensation was sought in the 2010 Enbridge oil spill and will likely be the method of reparation if the Keystone XL pipeline harms the environment as well. Time and again, those in favor of economic goals and gains have trampled on and harmed the rights of people and lands in the name of national security. In Doha, even when faced with irrefutable facts about climate change and rising sea levels, the US government passed the buck.
Pipe Dreams and Settler Colonialism
Many people understand the current XL pipeline issue as wholly environmental and alarmingly recent. The pipeline certainly represents a hideous threat to environmental well-being, but first and foremost it signifies the repetition of a settler colonial history by attempting to erase the existence and humanity of indigenous populations. This ongoing history of Native American genocide is a fact rarely acknowledged today nor critically studied before university education. If acknowledged, it is often an expedited reconciliation for the cost of human sacrifice in order to fulfill what The GAP reminded us was Manifest Destiny. A similar reconciliation was used in Qatar when wealthy countries acknowledged the sacrifices made by those states bearing the brunt of carbon emissions for the good of the rich.
The National Congress of American Indians (NCAI), along with many other groups, has condemned the pipeline, citing both environmental reasons and asserting its threat to cut directly through Indian country. Many Native activists have traveled to Washington, D.C. and elsewhere to enter pipeline protests and stand among hundreds of people joining hands across vast distances and belief systems. This union, along with the acknowledgment of a shared goal, should be centralized in the continued struggle to halt Keystone oil expansion.
In August 2011, Aboriginal actress Tantoo Cardinal (Metis, Cree) participated in and was arrested at a sit-in asking President Obama to refuse the pipeline proposal. Cardinal, who has appeared in well-known and highly-praised blockbuster hits such as Dances with Wolves and Legends of the Fall (both excellent examples of the white man’s burdensome conscience), said she came to raise awareness about the “absolute refusal and blindness” regarding sustainable energy that remains so widespread.
She asserted, "If there was any amount of energy, and time, and money, and education spent to wind energy, solar energy, and the natural ways of living a good life, then that would be some source of satisfaction. But the greed has not left. This that is going on right now is no different than all that has happened in the history of my people. This blind greed and meanness is what has annihilated so many nations of my people in genocide."
Cardinal also came with a specific message for President Obama: “This will affect your children before your grandchildren. And the power is with the people. You nourish people’s spirit, nourish their life, and that brings us together.”
The Keystone XL project has a range of complex and interweaving ingredients that contribute to its ongoing debate. There is a discernible blurring of government and private business relations in regards to the XL pipeline. Those with powerful ties to the State Department and other government agencies, and those who will directly benefit from the XL project, are hedging their bets for a compliant new Secretary of State. Meanwhile, by working with the US government and TransCanada, Cardo Entrix has produced an environmental study that found Keystone’s oil pipeline to have minimal negative effects on the environment. This study probably will be used by the State Department to back a decision on the pipeline despite evidence to the contrary.
Historically, such a nebulous rapport between governmental, private, and corporate interests has served to promulgate US complicity in domestic and overseas corruption. American involvement in past scandals, such as those in Iraq, should focus public attention on preventing future exploitation. However, pipeline advocates such as Representative John Boehner and Senator Richard Lugar push for an increase in local industrial-oil well construction. Oil well construction and successful approval of the Keystone XL project would lead to (more) state-backed profiteering from stolen lands, broken treaties, and low-paying labor. Of course, these state and private actors constantly remind their critics of the possibility that XL pipeline approval could eventually yield “US energy independence.” A possibility that comes at a cost many are unwilling to pay and on economic promises few should believe. Passage of the oil pipeline would mark another completed chapter in the innovation-age drama of American “progress.”