It is amazing the difference that four years can make in environmental policy. On January 24, 2017, at the outset of his presidency, Donald Trump issued an executive order that salvaged the Dakota Access Pipeline (DAPL) from the Obama administration’s planned obstructionism. Obama had sought to upset the string of administrative approvals that the project obtained at both the federal and state levels.
DAPL is now in service, even as litigation to shut it down continues. Environmental groups continue to allege attenuated theories of adverse effects under the National Environmental Policy Act (NEPA). Their efforts are consistent with the common practice among environmentalists of paying inordinate attention to highly remote contingencies while completely ignoring the large and immediate safety and efficiency advantages of getting crude oil to both domestic and the foreign markets via DAPL.
For the moment, however, the immediate threat is to the Keystone pipeline. On January 20, President Biden issued an executive order aimed at “Restoring Science to Tackle the Climate Crisis.” One component of his major order was to revoke the permit for the Keystone XL pipeline. The pipeline started some twelve years ago, but since that time it has been beset with legal challenges, including one in May 2020 in which a Montana judge yanked the pipeline’s permit on the grounds that the Army Corps of Engineers had not consulted sufficiently with the US Fish and Wildlife Service on the alleged risks that the pipeline posed to endangered species and their habitat. Such orders overlook the benefits from that pipeline, which include its ability to ship up to 830,000 barrels per day of crude oil from the Alberta sands to American refineries along the Gulf Coast.
Completing the pipeline would substitute the risky transport of oil by railroads and trucks for the safe transport by pipeline. Most environmental harm from the construction of the partially complete pipeline has already occurred, and the stranded costs from its incomplete construction will never be recovered if this cancellation sticks. The TC Energy Corporation, the pipeline’s Canadian owner, has proposed to use only renewable energy sources and union labor in a vain effort to stave off the revoking of the permit. But the Biden administration has paid this proposal no heed.
Pipeline supporters have rightly lauded the tax revenues it would have generated and the skilled labor it would have employed. While jobs and taxes are in themselves costs rather than benefits, here they are costs well worth bearing, as they generate a capital asset whose value far exceeds labor and capital input costs. Biden’s pipeline decision has clearly antagonized his strong labor base, and may well have prompted his dubious (and unprecedented) decision to fire Peter Robb, the general counsel of the National Labor Relations Board (NLRB), before the expiration of his term this coming November. It is a dangerous precedent to fire a key official at an independent agency for political gain within hours of assuming power. Notably, Donald Trump did not use that same questionable tactic against Richard Griffin Jr., Obama’s highly partisan NLRB general counsel.
The consequences of Biden’s decision to cancel the permit are far-reaching. The cancellation has already soured relationships with Canada, which will bear the short-term costs of the stranded pipeline and be left bringing Alberta crude oil to market through costlier and riskier pathways. In addition, the increased supplies of oil through Keystone XL would have reduced oil prices in the world markets and made it easier to find energy for the vulnerable New England states, which will have to continue to heavily rely on imported oil and gas to meet their energy needs. The ability to more effectively sell American and Canadian petroleum products worldwide would also have had powerful geopolitical implications, reducing the ability of Russia and the OPEC nations to control supply and to use that economic power to dictate the course of political events.
Biden constantly claims that his response to the climate “crisis” is driven exclusively by science, but he offers no evidence to support his view that we are in a global crisis, for which shutting down the Keystone Pipeline is part of the solution. That overwrought claim requires rigorous justification, for it is part of his effort to switch to unreliable wind and solar energy by making it ever more difficult to ship fossil fuels to refineries and consumers. Rather than make a serious analysis of the pros and cons of shutting the pipeline down, Biden simply asserts the necessity of doing so without pointing out any particular danger he seeks to avert. He offers no evidence to explain why “climate-related costs [are] increasing over the last four years.” It is not enough to point to increased levels of burning in California, as those forest fires are attributable to government policies that have abandoned sensible fire-protection protocols, such as allowing deadwood to accumulate as kindling and the construction of residential homes in high risk areas. Yet Biden makes the common mistake of thinking that all climate changes over the past four years are attributable to overall levels of carbon dioxide, without once looking at any of the evidence pointing to global stability in this area.
Consider a recent study published in a scientific journal affiliated with Nature whose abstract begins as follows: “The Antarctic continent has not warmed in the last seven decades, despite a monotonic increase in the atmospheric concentration of greenhouse gases.” That finding should quiet the environmentalists who lament whenever a large iceberg breaks off of the Antarctic. And given the rapidly improving efficiency levels in fracking and oil transmission, it is irresponsible to invoke crisis talk when impressive technological advances will do far more to make the earth safer from various kinds of environmental threats than Biden’s morose decision to cancel the Keystone XL pipeline. Why introduce major shifts in domestic policy when the US Energy Information Administration reports that between 2005 and 2019, “total US electricity generation increased by almost 2 percent while related CO2 emissions fell by 33 percent”?
The Biden administration is equally overconfident on the question of means. Recently, a White House spokesperson stated that Biden wants to build infrastructure with good-paying union jobs in order to boost the economy, concluding happily that “he knows how to do that. It’s with the plan he ran on.” The Biden plan appears to adopt, on a national level, the so-called innovations on energy and global warming that California has developed, which are aimed at removing all carbon-emitting energy sources by the year 2045.
Sadly, the California program has proved to be a disaster. The obvious objection to wind and solar energy is that there currently are not sufficient battery capabilities to support those energy modalities when the sun doesn’t shine and the wind doesn’t blow. But the difficulties go even deeper. Today, California’s electric grid is in “near collapse,” with rolling blackouts now a regular part of the current system. Unfortunately, policymakers there preferred finding ways to curtail energy consumption levels rather than increasing supply by adding back needed fossil fuels into the energy base. Governor Gavin Newsom’s solution is to tweet to his trapped citizens that they should turn off the lights, power down major appliances, and set thermostats to 78 degrees or higher.
The situation in California is not unique. Germany, which once had a reliable grid system, is also now teetering on the edge of energy dysfunction as a result of naive policies based on the belief that wind and solar sources could be implemented and managed at low cost. The result is, pardon the pun, a carbon copy of what has happened in California—the highest electricity prices in the world coupled with the risk of power blackouts.
Joe Biden miscasts himself as a man of science. He and his vaunted energy team refuse to address the manifold objections to his program. Progressives like Biden think prices are a bad way to allocate scarce resources. This foolishness promises to inaugurate a regime of massive energy instability and political conflict throughout the country. Any day of the week, I would take Trump’s inexcusable histrionics but sensible policies over Joe Biden’s pious demeanor and reckless energy initiatives.
Professor Richard A. Epstein, the Peter and Kirsten Bedford Senior Fellow at the Hoover Institution, is the Laurence A. Tisch Professor of Law, New York University Law School, and a senior lecturer at the University of Chicago. This article was first published by the Hoover Institute's Defining Ideas.