The Keystone XL (KXL) pipeline is dead. This is yet another signal that we are witnessing the beginning of the end of fossil fuels. In the last decade, KXL has died and been resurrected more times than a videogame avatar. It has been a long and winding road but the combination of political leadership, environmental advocacy, and market forces have killed the pipeline, this time for good. Now that the final nail has been banged into the zombie pipeline’s coffin, other pipelines are in the crosshairs.
The KXL saga finally came to an end on June 6, when the developer of the project, TC Energy Corp. (formerly TransCanada), pulled the plug on the $8 billion, 1,200 mile-long pipeline. The pipeline, which has been described as a massive carbon bomb, would have ferried 830,000 barrels of heavy crude oil each day from Alberta’s tar sands to Nebraska, where it would have connected with other pipelines that reach refineries on the Gulf of Mexico.
It was postponed and then canceled in 2015 by President Barack Obama who said the KXL was “inconsistent” with US leadership on climate change. Despite the broken logic of its supporters and the unpopularity of the pipeline, KXL was religiously defended by GOP lawmakers. It was resurrected along with other pipelines by the former Republican president in 2017. However, only hours after his inauguration in 2021 Joe Biden signed an executive order revoking the permit for the KXL, effectively putting a stake in the heart of this purveyor of death.
The end of the KXL is a cautionary tale for governments and investors. As recently as 2020 the Alberta government invested $1.1 billion in the project and now a year later Alberta taxpayers are on the hook for the $1.5 billion that provincial leaders poured into the doomed pipeline. Coal, oil, and gas are all high-risk propositions as the world begins to get serious about climate action. Banks, insurance companies, and investors make the transition away from fossil fuels inexorable. This is particularly true for tar sands bitumen, which is some of the dirtiest of dirty energy. In addition to its increased greenhouse gas emissions, oil sands are also impossible to clean up. The KXL has leaked many times including a major spill in 2017. Line 3 is another tar sands pipeline that has leaked many times as have the other pipelines belonging to Enbridge. This includes the million-gallon spill that contaminated the Kalamazoo River in Michigan, making it the most costly inland oil spill in U.S. history. After more than a century of oil extraction, it is clear that spills are common and there is no safe way to transport them.
Investment bank Goldman Sachs said the inability to get the tar sands oils to market makes them a high-risk investment. Investors have hundreds of billions of dollars of exposure and multiple risks give them reasons to be concerned about stranded assets. In 2020 we saw billions of dollars of fossil fuel-related stranded assets and it is reasonable to assume that this trend will accelerate going forward.
The oil industry has recently suffered a string of losses at the hands of activist investors and the courts. It is hard to avoid the conclusion that fossil fuels are terminal. Although the industry continues to extoll the virtues of the employment opportunities they provide, a side-by-side comparison reveals that the number of jobs in renewable energy crushes those in the fossil fuel sector (there is only 35 full-time obs associated with the KXL according to a State Department analysis).
There are lots of powerful reasons to reject the KXL besides questionable economics and overstated employment benefits. Fossil fuels are deadly and if they are not stopped they will kill millions more. Even as it dies the industry continues to promote disinformation while increasing global emissions. No one should lament the death of pipelines that threaten both our climate and our future.
The demise of the KXL is due to the decade-long efforts of environmental activists. It is also due to the stalwart dedication of indigenous people who fight to defend their lands and their waterways. The success of these efforts proves the power of protest and now protestors are gearing up to channel their efforts against Enbridge’s Line 3, the Dakota Access (DAPL), and the Transmountain pipeline. A protest titled Stop Insuring Trans Mountain Week of Action started on June 14th and will continue to the 21st. The Trans Mountain Expansion Project would transport an additional 590,000 barrels of tar sands oil each day from Alberta to British Columbia, and lead to a 700 percent increase in oil tankers in the Salish Sea. More than ten insurance companies have said they will not insure the Trans Mountain pipeline. An insurer by the name of Argo was the first to declare that it will no longer underwrite the pipeline. In a May 2021 email to Public Citizen, Argo stated: “We currently insure the Trans Mountain pipeline, but do not intend to renew it when the policy expires in August 2021. This type of project is not currently within Argo’s risk appetite.”
The actions of banks, insurers, and investors represent a formidable hurdle that will not be easily overcome. Likewise, the Biden administration’s commitment to climate action, racial justice, and civil rights does not bode well for the future of pipelines. Neither does the G7’s collaborative effort to reduce dependence on fossil fuels. In the context of these realities terminating the KXL is as much a sound business decision as it is a necessary move to reduce environmental destruction and emissions. We should welcome not mourn its demise, hydrocarbons must go as they are not part of a livable future, nor do they have a place in the emerging green economy.
The math is simple, we will not be able to achieve the goals laid out in the Paris Agreement without eliminating coal, oil, and gas. Ending fossil fuels really is at the heart of solving the climate crisis and the death of the KXL brings us one step closer to that end. The zombie pipeline that once seemed immortal has finally been euthanized and others are sure to follow.
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