I would think that with high oil prices, people in the United States would welcome such developments, since the majority of that oil will come here. Canada does not have the access built to ship that oil or the bitumen for processing, to Asia yet.
Of course, that does not account for the nutters in the environmentalist movement (actually, I consider them all to be rather inconsistent and illogical, but they have a right to free speech, so I get to enjoy the stupid gems that come out of their mouths).
For example, from the FT (full article):
Erich Pica, president of Friends of the Earth US, one of many environmentalist groups opposed to oil sands development, says: “Whether to approve this pipeline [Keystone XL, which will transport bitumen from Alberta, Canada, to the Gulf of Mexico, since Canada does not have enough refining capacity for the bitumen production expansion that is occurring] is the most important environmental decision President Obama will make before the election.
“If he sides with greedy oil companies instead of people and the climate, he will essentially be urging a huge part of his base to sit out the election.’’
First, those greedy oil companies:
- What's wrong with making a profit? That profit means that people value what oil companies produce.
- Oil companies are composed of people. They aren't magical entities of robots. So when you say "greedy oil company," do you stop to think of the insult to the hard working oil field workers, engineers, and yes, executives, that are producing a product that people want?
- Do they think of the people backing these oil companies, including hedge, mutual and pension funds? What about individual investors? In all likelihood, some of these environmentalists or their connections have a financial dependence on these companies doing well for their retirement portfolios to perform well. I suppose environmentalists are welcome to shoot themselves in the feet.
Next, the people:
- If oil companies are making a profit, that means that people want or need their product. So, to restrict access to that product means that the U.S. may have shortages of that product, driving up oil prices. Is that really friendly to the U.S. populace?
- There is no credible alternative for transportation, be it the short commute (or 2 hours, for me), or the college road trip, other than oil and natural gas (if you have a CNG vehicle). Even the electric cars coming on to the market in 2012 will have a capacity of 100-120 miles per charge. The technology has a long way to go. And if they think oil companies are deliberately slowing down electric technology development (which some environmentalists probably do think), they're even more idiots than I thought.
- Oil and natural gas are used for more than transportation. Other goods, such as fertilizer (we need to eat, after all) and plastics depend on those inputs. Depriving the U.S. of incremental Canadian oil would raise the prices for these other goods, both directly via higher input prices and indirectly via higher transportation costs. Is it really people-friendly to advocate that people be forced to spend more money to buy their basic necessities?
- Again on transportation, if oil prices in the U.S. are higher due to less supply from Canada and a harder time getting supply from elsewhere (or maybe Canada sells to Asia, and then Asia turns around and sells back to the U.S., which certainly adds to the cost), then leisure for the U.S. populace became more expensive. You wanted to fly to Tahoe to ski? That'll be $100 more dollars per airplane ticket, thank you very much. If that's people-friendly, then I'm scared to know what's people-unfriendly.
Finally, the climate:
- Let's think about this. Canada is a developed nation with a sound rule of law, and respect for the environment, even in the corporate world. Do people really think that the Canadian government would let oil sands development occur without funds set aside to restore the land after the reserves are extracted? Maybe environmentalists do, but in that case, they are guilty of ignorance: according to Jeff Sundquist, CAD$1 billion in bonds have been posted to ensure environmental reclamation.
- Oil extraction in other countries we rely on, such as Nigeria, is a lot less friendly. If we do not get oil from Canada, our demand is likely not going to go down, so we'll need to get it elsewhere. Maybe we'll demand more then from other nations with laxer environmental standards, and inadvertently contribute to environmental destruction there? Wouldn't that be climate unfriendly? File that under the law of unintended consequences.
In my opinion, incremental Canadian oil will find its way to market, one way or another. Maybe it'll go to Asia. Maybe to the U.S. through a circuitous route. But it would be a damn shame to let environmentalists dictate our energy policy, as it seems they can not answer the question, "And then what?"