Trump Administration and Climate Change: We’ll follow developments closely

imgresIt now becomes important to find out what Donald Trump and his cabinet plan to do to reverse the previous administration’s effort to slow down the pace of global warming. Also, we must monitor the choices the new administration are making in enacting its energy policy. Therefore, I plan to write and comment frequently on specific actions that the new administration is taking in these two areas.

Trump’s  well known pronouncements denying the effects of CO2 on atmospheric warming and his disdain for science in general are a good indication of where we are heading. Under Obama, a number of steps were taken to move the country in the direction of renewable energy, with most of these having economic justification, in some cases aided by government subsidies. Importantly, the U.S. became a signatory to the Paris agreement that outlined a path toward a lower carbon future. So, that is the starting point the Trump administration inherited as it starts to move in quite a different direction. Actions to implement Trump’s intention to undo Obama’s environmental legacy must be carried out either via executive orders or by Congressional vote. While some of his cabinet choices (e.g.  Rex Tillerson at State and Ray Zinke at Interior) appear to have a different view (Tillerson proposed a carbon tax), his choice at DOE   (Scott Pruitt ) seems even more adamant than Trump as a global warming denier. So, we can expect Congress to go along with Trump on much of his new agenda. But it will not be easy to change some of the current policies, as we may see. My first post in this new departure happens to be relatively uncritical of Trump.

Keystone and Dakota Access Pipelines: One of Trump’s first steps was to give a go-ahead to these two projects. Much of the work on both of these pipelines has already been completed. Keystone was halted by Obama because of the high carbon content of tar sands crude oil, while Dakota was halted due to protests by local Indian tribes. Both projects will now be completed.

Looking first at Dakota, there is much in favor of this pipeline, the only negative being the potential for a leak in the section going under the Missouri River. There are many U.S. pipelines under rivers in the continental U.S. and we have long decided that this is a risk that must be borne. The fact that it may affect drinking water on tribal lands is far outweighed by the benefit of not having thousands of unsafe tank cars carrying crude oil from the Bakken wells to mid-west refineries, creating a much greater risk of water pollution – to say nothing of fires and casualties – when trains are derailed and cars spill crude oil, a fairly common occurrence. It will behoove the government to do everything possible to provide clean water to the Indians in the very low probability occurrence of a Dakota pipeline leak under the Missouri.

The Keystone pipeline situation is more complicated. The U.S. already imports a lot of crude oil from Canada and will now import more. This will back out crude imports from “less friendly” nations. Also, U.S. oil companies make some of the oil in the tar sands. The overall tar sands operation will continue with or without the pipeline, since Canada will get this oil to other destinations, mainly overseas. However, tar sands producers will now step up production bringing more of thus carbon-heavy oil oil to markets. The tar sands recovery and transformation operation in Alberta itself involves a considerable amount of carbon emissions and is therefore a less desirable method of producing crude oil. So, the net of Keystone is more CO2 emissions than if the pipeline were not built. An unknown factor are the future economics of tar sands crude versus U.S. crude. While some refineries can run heavy (e.g. Venezuela, tar sands) crude, they will preferentially buy U.S. crude if it is cheaper. If the Saudis buy the large Lyondell heavy crude-based refinery, it will be fed with Saudi crude.

Trump’s claim regarding job creation for these pipelines ring hollow. Both pipelines are nearly complete. There will initially be thousands of new construction jobs, but very few permanent jobs thereafter.

 

Advertisements
This entry was posted in Energy Industry and tagged , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s