The NYTimes Gets It Wrong: The Keystone XL Pipeline and Understanding the Canada-U.S. Energy Relationship

By Keith Edmund White

Editor-in-Chief

If you gave quick glance to yesterday’s NYTimes article detailing Canadian blowback from the Obama administration’s rejection of the Keystone XL pipeline, you might think that the Canada-U.S. energy relationship is now in grave jeopardy—and that the Keystone rejection has come with irreversible and grave economic costs to the United States.  But that impression has less to do with the actual facts surrounding Keystone than the NYTimes article’s poor and misleading structure, which suggests the NYTimes was more interested in getting ‘lazy clicks’ than actually informing the public on the state of the post-Keystone XL Canada-U.S. energy relationship.  

The short answer:  (1) there is no post-Keystone XL Canada-U.S. energy relationship--the southern leg of Keystone is already under construction and Keystone XL's reapplication is very likely to be approved after the presidential election; (2) the US isn’t losing energy security from its Keystone rejection; and (3) any loss of jobs from not constructing the northern portion of Keystone now seem delayed—not lost—because Canada is running into the same, if not stronger, environmental roadblocks that triggered the Obama administration’s Keystone rejection.  But even if you don't buy any of that, there's one glaring omission from Rosenthal’s article:  actually spelling out what was lost by the United States when the Obama administration rejected Keystone XL.

Yesterday, the NYTimes’ Elisabeth Rosenthal documented Canadian blowback resulting from the Obama administration's rejection of the Keystone XL pipeline.  While tightly written and not inaccurate, the article’s structure and considerable cherry-picking of facts implies the Keystone rejection has damaged America's energy relationship with Canada, a Saudi Arabian-sized energy supplier.  In fact, the real cost of not building the Keystone XL appears most likely to be only a delay in jobs related to constructing Keystone's northern portion and exporting Canadian oil outside North America through U.S. ports.

But you wouldn’t get that from reading Rosenthal opening paragraph: 

As the United States continues to play political Ping-Pong with the fate of the Keystone XL pipeline, Canadian officials and companies are desperately seeking alternatives to get the country’s nearly 200 billion barrels in oil reserves — almost equal to that of Saudi Arabia — to market from landlocked Alberta.

Six paragraphs down Rosenthal finally gets to discussing Canada’s ‘response’ to Keystone—three westward pipelines in Canada. Oh, but wait, in the next paragraph Rosenthal discusses a small problem with those plans:

Together, the new westward [Canadian] pipelines would carry more oil than Keystone XL would. But even with aggressive government backing, creating new pipelines may prove as difficult in Canada as it has been in the United States, though for different reasons.

And Rosenthal entirely omits another aspect of the Keystone XL debate: construction has already started on the Keystone XL’s southern portion. Why’s this important? Well, at the very least, it makes clear that the Canada-U.S. energy relationship isn’t fading anytime soon. From a February 2012 Mining.com article:

In a move that should go a long away to relieve the oil glut in the US Midwest TransCanada said on Monday it is going ahead with construction of the $2.3 billion southern leg of the Keystone XL oil pipeline from Cushing Oklahoma to the US Gulf Coast. 

The Calgary based company said the shortened pipeline could be operational by June-July next year. Keystone XL was designed to carry 830,000 barrels per day.

...

Canada exports 2 million barrels of oil per day to the US and almost all of it ends up at Cushing – the pricing point for US crude – where inventories have been piling up and refining capacity is limited.

Oh, and that brings up an interesting point about Keystone XL. The additional oil that Keystone would have flowed into the United States would then be likely exported out of the United States. Why’s that? Because the United States can already take in the Canadian oil it needs—with or without Keystone. From a March 2012 MSNBC article:   

Most analysts agree that more Canadian oil flowing south would help reduce imports from other regions. Less obvious, however, is the fact that the Keystone XL pipeline is not actually needed to bring all that new Canadian oil to the US – a flow now projected to rise to 1.7 million barrels per day by 2030, according to the same DOE study. Often characterized by proponents as validating the need for the pipeline, that study actually found that Canadian oil import growth will go on at “almost identical” levels through 2030 using existing and new pipeline capacity as well as rail shipments – whether or not Keystone XL is built.

This brings us an important point: what’s at cost for the US economically in rejecting Keystone is not energy security, but--again--additional pipeline construction, refinery, and export-related jobs tied to being Canada’s access point to non-U.S. consumers of Canadian oil.

Now if you read Rosenthal’s piece that point was probably lost one you, since the entire narrative she constructs comes awfully close to:  ‘The U.S. Rejection of Canada’s Pipeline Jeopardizes the Canada-U.S. Energy Relationship.’   Sure, the Keystone rejection was driven by domestic politics, and did come at an economic cost to the United States.  But the scale of this cost seems rather minimal:  (1) Canada was pushing a pipeline in the US to avoid its own domestic opposition to westward pipelines in Canada, (2) the U.S.-Canada energy relationship (whether in terms of oil supply, refinery operations, or construction of pipelines) is still ongoing and growing, and (3) work on Keystone continues.  And the environmental concerns that led Obama to ‘cave’ to an interest group, well guess what?  They're even stronger in Canada.

And then there's the underlying point that makes most of this article, and this blog post, moot:  a modified Keystone XL pipeline will likely be approved after the presidential election--regardless of the election's outcome. A May 2012 Fox Business report states: 

TransCanada Corp is taking its second shot at asking Washington to approve the contentious Keystone XL oil pipeline, betting that a new route through Nebraska and post-U.S. election time frame for a decision will push the project forward.

… 

"This project has been caught up in presidential politics long enough, it's time to get to work," Senator Lisa Murkowski, an Alaska Republican and ranking member of the Senate Energy and Natural Resources Committee, said in a statement.  

[Alex] Pourbaix said he believes the Nebraska Department of Environmental Quality will be able to decide on a new route that skirts environmentally sensitive areas by September or October. [Pourbaix is TransCanada's pipeline division president.]

Now, perhaps this criticism of Ronsenthal’s piece is asking too much for a moderately sized news article, which has to boil down complicated ideas and can’t inject every wrinkle into a story.  This posting—if it has succeeded—has brought up some nuanced--if easy to find--points, and perhaps crafting a compact NYTimes article including these points is simply impractical.  And, admittedly, she does—six paragraphs down—discuss Canada’s own challenges in getting their western pipelines off the ground.  But wait, what about this: 

As Canadian officials and companies desperately seek alternatives to get the country’s nearly 200 billion barrels in oil reserves – almost equal to that of Saudi Arabia – to market from landlocked Alberta, Canada pushes forward with Keystone XL alternatives forcing the United States to gauge the cost of Keystone’s rejection.

Now this opening paragraph, while still buying into the misleading narrative pushed by Rosenthal, at least lays a groundwork for understanding the micro-topic (Canada wants to get its oil out) without suggesting the United States is sacrificing its own energy relationship with Canada, let alone its energy security, by rejecting a portion of the pipeline. Furthermore, at the very least, it focuses on what matters to readers: spelling out the actual costs of the Obama administration's decision to reject Keystone XL.

Perhaps that type of article lacks the (misleading) black-and-white narrative that drives readership in today's newsmedia marketplace. But, at the very least, aren't these the type of topics that a world-class news organization—with their voluminous research database, rolodex-bursting access to public officials and experts, and supposed commitment to fostering informed discourse—should answer? And wouldn’t that article get more ‘clicks’ than an article that simply documents Canadian discontent without giving readers the context necessary to assess the Keystone XL delay's impact?