BY LEW DALY AND SEAN MCELWEE
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Natural Gas, Keystone XL Pipeline Won’t Save the U.S. Economy | New Republic
Natural Gas, Keystone XL Pipeline Won’t Save the U.S. Economy | New Republic.
But the belief that natural gas can be a “bridge fuel,” allowing us to grow rapidly in the age of global warming, is fit for a madman.
The current consensus is that if global temperatures rise more than 2 degrees Celsius above preindustrial levels, the consequences would be catastrophic (the Arctic melt would raise sea levels by tens of meters). So scientists have proposed a “carbon budget”: the total amount of carbon dioxide that can be released into the atmosphere without raising temperatures by 2 degrees. Using a conservative carbon budget of 450 parts per million—which has been endorsed by the International Energy Agency and Britain’s Stern Review—economists Humberto Llavador, John Roemer, and Joaquim Silvestre have thrown cold water on the idea that natural gas is our nation’s economic savior. In a forthcoming paper, they argue that given that budget, the world’s two largest CO2 emitters, the U.S. and China, must keep GDP growth within the threshold of 1 percent and 2.8 percent of GDP per year, respectively, for the next 75 years.
These results may sound surprising, but they are in line with a growing body of research on stranded carbon assets, which are assets such as fossil fuels (oil, coal and natural gas) that will lose their value well before they’re expected to. This can happen as a result of, say, market disruption (rapid advances in green technology like wind and solar polar or divestment) or government regulation (a carbon tax or stricter fuel economy standards). That latter is more likely because, even now, we have found way more fossil fuels than we could possibly burn without inviting long-term environmental disaster.
The Intergovernmental Panel on Climate Change’s carbon-budget model, widely considered the most reliable, puts the budget for 2012-2100 at between 886 and 1119 gigatons of CO2. Total known fossil fuel reserves in the world, if burned, would add 2860 gigatons of CO2 to the atmosphere. Thus, simple math indicates that almost two-thirds of all known fossil fuel reserves must remain unburned if global temperatures are to remain habitable. And these are optimistic estimates. James Hansen of the Columbia Earth Institute and other leading scientists and economists argue that all extraction of coal and other unconventional fossil fuels, like the Canadian Tar Sands, must cease immediately and the extraction of conventional fossil fuels, like oil and natural gas, must be significantly pared down.
Projects like the Keystone XL pipeline and other attempts to revive the U.S. economy based on fossil-fuel extraction are the equivalent of running up billions in debt and then running off to borrow more. The international community is already blowing through its carbon budget; the IPCC predicts that given “business as usual,” we’ll burn 1,000 gigatons of CO2 between 2012 and 2033, depleting the more conservative budget entirely and nearing the upper bound. We’ve already seen the consequences of temperatures growing by less than one degree Celsius, yet we’re on track to see themrise by more than six degrees by 2100. Our current trajectory tempts ecological and economic collapse, and yet, many are arguing that we accelerate the process.
Part of the problem is that our measure of growth, GDP, does not take into account the costs or sustainability of growth. One billion dollars of growth in the production of solar energy is not the same as $1 billion produced by coal in terms of ecological harm and sustainability, but GDP counts them equally. Instead we should measure progress using more extensive metrics like the Genuine Progress Indicator, which factors the impact of greenhouse gas emissions into its calculations. Further, we should institute a carbon tax, preferably an international one. Some companies currently price carbon internally—meaning that they put a price on the carbon produced by their projects, and subtract that from any expected returns—but do so at widely varying rates. A Carbon Disclosure Project study finds that nine of the largest energy companies in the United States internally price carbon dioxide emissions, at a cost ranging from $15 per ton (Devon) to $60 per ton (ExxonMobil). Governments should consider the social and environmental cost of carbon dioxide when they are making infrastructure and research investments, regulating extractive industries like fracking and offering tax incentives. Against the EPA’s recommendation, the State Department decided not to consider the social cost of carbon in its analysis of the Keystone pipeline.
The State Department also didn’t consider the very likely possibility that the pipeline will become a stranded asset. We can only hope it will—because that would mean we’ve finally learned that if we don’t live within our carbon budget, the long-term ecological and economic harm caused by our relentless extraction and burning of fossil fuels will obviate any short-term benefits to the economy. If we build our recovery on natural resources that need to remain underground to keep global temperatures stable, then we’ll be like the foolish builder in the Gospel of Matthew “who built his house on sand. The rain came down, the streams rose, and the winds blew and beat against that house, and it fell with a great crash.”
Lew Daly is the director of policy and research at Demos. Sean McElwee is a researcher at Demos.
Natural Gas, Keystone XL Pipeline Won't Save the U.S. Economy | New Republic
Natural Gas, Keystone XL Pipeline Won’t Save the U.S. Economy | New Republic.
BY LEW DALY AND SEAN MCELWEE
But the belief that natural gas can be a “bridge fuel,” allowing us to grow rapidly in the age of global warming, is fit for a madman.
The current consensus is that if global temperatures rise more than 2 degrees Celsius above preindustrial levels, the consequences would be catastrophic (the Arctic melt would raise sea levels by tens of meters). So scientists have proposed a “carbon budget”: the total amount of carbon dioxide that can be released into the atmosphere without raising temperatures by 2 degrees. Using a conservative carbon budget of 450 parts per million—which has been endorsed by the International Energy Agency and Britain’s Stern Review—economists Humberto Llavador, John Roemer, and Joaquim Silvestre have thrown cold water on the idea that natural gas is our nation’s economic savior. In a forthcoming paper, they argue that given that budget, the world’s two largest CO2 emitters, the U.S. and China, must keep GDP growth within the threshold of 1 percent and 2.8 percent of GDP per year, respectively, for the next 75 years.
These results may sound surprising, but they are in line with a growing body of research on stranded carbon assets, which are assets such as fossil fuels (oil, coal and natural gas) that will lose their value well before they’re expected to. This can happen as a result of, say, market disruption (rapid advances in green technology like wind and solar polar or divestment) or government regulation (a carbon tax or stricter fuel economy standards). That latter is more likely because, even now, we have found way more fossil fuels than we could possibly burn without inviting long-term environmental disaster.
The Intergovernmental Panel on Climate Change’s carbon-budget model, widely considered the most reliable, puts the budget for 2012-2100 at between 886 and 1119 gigatons of CO2. Total known fossil fuel reserves in the world, if burned, would add 2860 gigatons of CO2 to the atmosphere. Thus, simple math indicates that almost two-thirds of all known fossil fuel reserves must remain unburned if global temperatures are to remain habitable. And these are optimistic estimates. James Hansen of the Columbia Earth Institute and other leading scientists and economists argue that all extraction of coal and other unconventional fossil fuels, like the Canadian Tar Sands, must cease immediately and the extraction of conventional fossil fuels, like oil and natural gas, must be significantly pared down.
Projects like the Keystone XL pipeline and other attempts to revive the U.S. economy based on fossil-fuel extraction are the equivalent of running up billions in debt and then running off to borrow more. The international community is already blowing through its carbon budget; the IPCC predicts that given “business as usual,” we’ll burn 1,000 gigatons of CO2 between 2012 and 2033, depleting the more conservative budget entirely and nearing the upper bound. We’ve already seen the consequences of temperatures growing by less than one degree Celsius, yet we’re on track to see themrise by more than six degrees by 2100. Our current trajectory tempts ecological and economic collapse, and yet, many are arguing that we accelerate the process.
Part of the problem is that our measure of growth, GDP, does not take into account the costs or sustainability of growth. One billion dollars of growth in the production of solar energy is not the same as $1 billion produced by coal in terms of ecological harm and sustainability, but GDP counts them equally. Instead we should measure progress using more extensive metrics like the Genuine Progress Indicator, which factors the impact of greenhouse gas emissions into its calculations. Further, we should institute a carbon tax, preferably an international one. Some companies currently price carbon internally—meaning that they put a price on the carbon produced by their projects, and subtract that from any expected returns—but do so at widely varying rates. A Carbon Disclosure Project study finds that nine of the largest energy companies in the United States internally price carbon dioxide emissions, at a cost ranging from $15 per ton (Devon) to $60 per ton (ExxonMobil). Governments should consider the social and environmental cost of carbon dioxide when they are making infrastructure and research investments, regulating extractive industries like fracking and offering tax incentives. Against the EPA’s recommendation, the State Department decided not to consider the social cost of carbon in its analysis of the Keystone pipeline.
The State Department also didn’t consider the very likely possibility that the pipeline will become a stranded asset. We can only hope it will—because that would mean we’ve finally learned that if we don’t live within our carbon budget, the long-term ecological and economic harm caused by our relentless extraction and burning of fossil fuels will obviate any short-term benefits to the economy. If we build our recovery on natural resources that need to remain underground to keep global temperatures stable, then we’ll be like the foolish builder in the Gospel of Matthew “who built his house on sand. The rain came down, the streams rose, and the winds blew and beat against that house, and it fell with a great crash.”
Lew Daly is the director of policy and research at Demos. Sean McElwee is a researcher at Demos.
Keystone XL Nebraska Route Approval Struck Down By Judge
Keystone XL Nebraska Route Approval Struck Down By Judge.
AP | Posted: 02/19/2014 4:14 pm EST | Updated: 02/19/2014 11:59 pm EST

WASHINGTON – Not even the U.S. president can save the Keystone XL pipeline project now — at least not by himself.
The long-delayed plan suffered a major setback Wednesday when a Nebraska district judge ripped up a state law that could have forced landowners to allow the pipeline through their property.
The ruling opens up the prospect of more regulatory hurdles, complicated negotiations with landowners, legal fights and fresh delays, regardless of whether or not Barack Obama ever approves the controversial project.
Lancaster County Judge Stephanie Stacy declared unconstitutional a law that had given Nebraska Gov. Dave Heineman the power to push the project through private land.
Unless the law is reinstated by a higher court, Calgary-based pipeline builder TransCanada Corp. could be forced to either draw up a new route or seek permission from every last landowner on the current one.
Additional lawsuits seem almost inevitable in the ongoing fight over a project designed to increase the pipeline capacity for Canadian oil into the U.S. by about one-quarter — a pitched battle that has already lasted for years.
Stacy insisted her ruling had nothing to do with the merits of the pipeline and everything to do with Nebraska’s constitution.
“TransCanada’s Keystone XL pipeline has become a political lightning rod for both supporters and opponents of the pipeline, but the issues before this court have nothing to do with the merits of that pipeline,” she wrote.
“The constitutional issues before this court will not require consideration of the current pipeline debate, nor will the decision in this case resolve that debate.”
State officials who defended the law will appeal to the Nebraska Supreme Court. Nebraska lawmakers may have to pass a new pipeline-siting law to allow the third-party Public Service Commission to act.
If they do, it’s not yet clear how long the five-member commission might take on the issue or whether it would approve the pipeline.
TransCanada, meanwhile, said it was disappointed and disagreed with the decision, but would analyze it before deciding on its next steps.
As it stands, TransCanada has settled with landowners in five of six U.S. states through which the pipeline is supposed to pass, as well as with more than two-thirds of the affected landowners in Nebraska.
But a minority have kept fighting, despite skyrocketing offers of compensation.
Jeanne Crumly and her husband have seen offers for use of their land surge from $8,900 to $61,977.84. But they don’t want the pipeline on their family farm at any price.
Crumly, who lives in the tiny Nebraska town of Page, about 300 kilometres northwest of Omaha, said she had to read the ruling a couple of times to believe it. She made celebratory phone calls to her husband and children once it sank in.
“It felt great,” Crumly said. “There’s some justice and it’s not just money running the show.”
The company had been upping the ante for access to people’s property, presumably to settle all possible disputes in the event Obama approved the pipeline.
TransCanada, which has complained it’s been losing money as the pipeline equipment sits idle, had been hoping to start building during this year’s construction season.
That plan now seems like a distant long shot.
The southern leg of the pipeline is already operational. But oil must still be transported by rail from Alberta through the northern U.S. before it can be sent by pipeline to refineries on the Gulf of Mexico.
The issue came up at a North American leaders’ summit in Mexico, where Prime Minister Stephen Harper pressed Obama to provide some clarity on his intentions.
Officials said Obama’s message remained unchanged: there’s a regulatory process underway, and he doesn’t control it.
There’s a 90-day period during which U.S. government departments can raise concerns about the pipeline, before the State Department makes a final recommendation to the president.
However, administration officials have made it clear that there is no set deadline for either State or the president to make the final call.
Obama did add during a news conference later that he and Harper spoke about the need to work together on dealing with greenhouse-gas emissions.
There is some speculation in Washington that Obama might want to delay the politically sensitive decision until after November’s midterm elections.
Enbridge Northern Gateway Approved By Review Panel
Enbridge Northern Gateway Approved By Review Panel.
TORONTO – A panel reviewing a proposed pipeline to the Pacific Coast that would allow Canada’s oil to be shipped to Asia is recommending the Canadian government approve the project.
On Thursday, the three-person review panel recommended approving the pipeline with 209 conditions.
Natural Resource Minister Joe Oliver said the government will thoroughly review it and consult with affected aboriginal groups before making a decision on the contentious pipeline.
There is fierce environmental and aboriginal opposition and court challenges are expected.
Prime Minister Stephen Harper has staunchly supported the pipeline after the U.S. delayed a decision on TransCanada’s Keystone XL pipeline that would take oil from Alberta to the U.S. Gulf Coast.
The Northern Gateway pipeline would be laid from Alberta to the Pacific to deliver oil to Asia, mainly energy-hungry China.