Will Keystone XL Really Turn North America into an Energy Superpower?

At the beginning of February, the American Department of State released a voluminous report analyzing the environmental effects of the Canada-U.S. Keystone XL oil pipeline project. There were no objections to the project in the report’s conclusions.

American citizens had until March 7 to state their views on the report. Over 3 million people sent their comments; two-thirds argued against building this infrastructure, which would transport oil derived from Albertan tar sands to Texas refineries.

Will President Obama side with the opposition and stop Keystone XL?

The overwhelmingly negative comments were received during one of the final steps of the project’s long evaluation process. However, they are not representative of American public opinion.

Two surveys — one conducted by the Pew Research Center in September 2013 and the other by The Washington Post and ABC News in March 2014 — showed that public opinion is strongly in favor of the pipeline. In both cases, 65 percent of respondents supported it.

Supporters of Keystone XL do not completely deny the environmental risks. They support the project because of the expected economic benefits and particularly the number of jobs it could create.

However, job forecasts are not as promising as they might hope. The State Department estimates that 1,950 jobs will be created during the construction period (about two years), and only 50 or so afterward.

Supporters offer a second argument in support of the project. They believe that the pipeline will strengthen the United States’ energy security by reducing dependence on oil from a sometimes unstable region that can cause problems for both the United States and the Middle East. Instead, America will be able to count on a close, reliable ally: Canada.

Opponents of Keystone XL argue that the project maintains dependence on fossil fuels; they also fear the environmental consequences, especially climate change and the risk of spills.

The Obama administration’s main problem is the people who make up this opposition. They are mostly youth and left-leaning Democrats, two groups of voters that are essential to the electoral success of the Democratic Party.

President Obama will have to tread carefully. He needs to accommodate a significant majority without alienating the precious voters the Democratic Party has acquired. He could find a compromise, for example, by allowing the construction of Keystone XL while strengthening environmental regulations regarding coal-fired electricity.

Energy Resources Will Not Make North America an Island Unto Itself

Although Keystone XL may seem like the cornerstone of North American energy integration, it is really a secondary element in a major plan to (re)make North America into a leading global energy superpower. The explosion of shale gas and oil production in the United States since 2008 has been the key element of this plan.

This energy revolution has had two major consequences.

Increased production of natural gas caused a major drop in its North American prices. Natural gas has therefore begun to replace coal in electricity production and has helped stabilize the Unites States’ greenhouse gas emissions. The transportation sector has also shown increased interest in using liquefied natural gas as a fuel source.

Furthermore, North American natural gas seems so plentiful that producers and their allies are trying to accelerate the federal authorization process for building new export terminals. They could thus find new markets for American natural gas and in the medium term, they could even counter the influence that a major producer — Russia — has on America’s European allies.

Second, renewed oil production in the United States has fueled optimism about the abundance of this resource and increased discourses about North American energy independence from Middle Eastern imports.

Although shale oil production has allowed the United States to become a net exporter of petroleum products for the first time in 60 years, this oil wealth does not guarantee absolute energy security nor does it allow America to withdraw from the Middle East. There is one simple reason: Contrary to the natural gas market, which is essentially regional because of transportation difficulties, the oil market is global.

Hence crises in major production regions like the Middle East or threats to seaways (like a blockade of the Strait of Hormuz) have an effect on the price per barrel, and consequently on the economies of both the United States and the world.

The increase in oil production in the United States since 2008 has stabilized world prices within a range of $90 to $120 a barrel. But American involvement in the Middle East and the protection of seaways remain crucial for international security, stability and prosperity. The Obama administration is quite aware of this.