Sustainable Business Leaders Call on Obama to Approve the Keystone XL Pipeline

Jeff Immelt, CEO of GELast August, Andrew Winston wrote a piece in The Guardian about the strategies American companies need to adopt in order to tackle sustainability challenges. One of these strategies was lobbying. “…Problems as large as climate change require communal action, which means government…But in the U.S., there’s no government action without corporate support,” he wrote.

Last week, over 150 American companies followed Winston’s advice, but in a different direction than Winston probably had in mind. The companies signed a letter calling on President Obama to approve the construction of the Keystone XL pipeline.

In the heated debate over the future of the Keystone pipeline such letters are no surprise. However, what comes as a surprise is the identity of some of the signatories. In addition to the usual suspects (aka oil and gas companies), there are companies like GE, AT&T, PwC, Siemens, KPMG and Waste Management, which are among the leaders in the business community when it comes to sustainability, and frankly you would expect them to make a case against the pipeline, not lobby for its approval.

Nevertheless, these companies are part of the effort to convince President Obama to approve the project. The case they make is that “we are at an inflection point in our economic recovery. Whether economic growth will remain modest or pick up speed will depend on maintaining investor confidence and strengthening America’s competitiveness. The decision on Keystone XL will affect both.”

The letter explains that this project would not only boost the economy, but also that it would “enhance America’s competitiveness by helping to realize the long-standing goal of increased North American energy security, without spending a single dollar of U.S. government funds.”

In addition, the letter states that the environmental risks associated with the project are manageable – “Those risks, like those incumbent in many other significant projects, must – and can – be managed, through appropriate regulation and careful stewardship. Keystone XL will meet nearly 60 special conditions set by regulators to minimize risks, and ultimately the net environmental impact of the pipeline would be minimal – as was recognized in your Administration’s Draft Supplemental Environmental Impact Statement (SEIS).”

I won’t repeat the counter-arguments that people opposing the project like Bill McKibben or James Hansen make, but it’s still worthwhile to mention two important points: first, while the letter refers to the State Department’s draft report on the project’s impacts (SEIS) to show that even the State Department believes the environmental impacts of the project would be minimal, it ignores the fact that the same report concluded that the long-term effects of the project in terms of job creation would be minor.

The “tens of thousands of American jobs, across diversified sectors” the letter mentions are only for the short-term, but the letter fails to mention it. By the way, if the companies that signed the letter had the chance to read Ryan Lizza’s report on the Keystone pipeline they would know that the President doesn’t really buy the job creation argument (on the other hand, it seems that the President also doesn’t buy the environmental tragedy argument).

Second, the letter somehow fails to mention that the report’s findings on the minimal impacts on the environment were challenged by the EPA and that the State Department has reassessed its findings.

Now, the question is not only why companies like GE, AT&T, PwC, Siemens, KPMG and Waste Management support this flawed way of presenting the arguments in favor of the Keystone pipeline, but why they are in favor of it in the first place. Each of these companies has an impressive record of sustainability initiatives and positions, so why do they support a project that, as Bill McKibben noted, will provide the U.S. with a new and easy way to access the “dirtiest oil on earth”?

How can Waste Management, a company that calls itself “North America’s leading provider of integrated environmental solutions,” and that was hailed lately for its collaboration with Bill McDonough to help companies lower the packaging waste in their supply chains and repurpose the waste that does make, support the project?

How can PwC, which serves as a global advisor to CDP and report writer of its flagship reports, support the Keystone pipeline project? Isn’t it the same company that wrote in its Too late for two degrees report that “the only way to avoid the pessimistic scenarios will be radical transformations in the ways the global economy currently functions: rapid uptake of renewable energy, sharp falls in fossil fuel use or massive deployment of CCS, removal of industrial emissions and halting deforestation. This suggests a need for much more ambition and urgency on climate policy, at both the national and international level. Either way, business-as-usual is not an option”?

How can Jeffrey Immelt, the CEO of GE, whose Ecomagination program was one of the first programs that showed what sustainability in business meant and the man who said, “I’m a capitalist and a businessman. I believe I can drive earnings and make money by working to create clean energy, water and environmental solutions,” sign this letter of support?

It’s not clear if the answer to these questions is that this is just another example of the inconsistency of business when it comes to sustainability, or that these companies somehow truly believe that the Keystone pipeline and a sustainable future can go hand-in-hand. Maybe even both.

A hint might be found in PwC’s Sustainability and Climate Change Director, Jonathan Grant’s comment following the latest CDP Global 500 Climate Change report. “The early days of the journey down a low carbon pathway are likely to be littered with awkward compromises between growth, the environment and communities,” he said.

One can only wonder if with such awkward compromises as the Keystone pipeline, we will ever get to the promised land of a low-carbon economy.

[Image credit:Ed Schipul, Flickr Creative Commons]

Raz Godelnik is the co-founder of Eco-Libris and an adjunct faculty at the University of Delaware’s Business School, CUNY SPS and Parsons The New School for Design, teaching courses in green business, sustainable design and new product development. You can follow Raz on Twitter.

Raz Godelnik

Raz Godelnik is an Assistant Professor and the Co-Director of the MS in Strategic Design & Management program at Parsons School of Design in New York. Currently, his research projects focus on the impact of the sharing economy on traditional business, the sharing economy and cities’ resilience, the future of design thinking, and the integration of sustainability into Millennials’ lifestyles. Raz is the co-founder of two green startups – Hemper Jeans and Eco-Libris and holds an MBA from Tel Aviv University.

12 responses

  1. Great article. This is definitely one of those ‘reality checks’ articles we need once in a while. Lets be honest, I agree that we’re always going to have to make compromises in our path to building a sustainable economy. Still, Keystone seems like a terrible compromise to make, one where the short term profits are definitely outweighing long term thinking.

    There are next to no jobs standing to be created with keystone and a high amount of risk. Sad.

  2. Great article. This is definitely one of those ‘reality checks’ articles we need once in a while. Lets be honest, I agree that we’re always going to have to make compromises in our path to building a sustainable economy. Still, Keystone seems like a terrible compromise to make, one where the short term profits are definitely outweighing long term thinking.

    There are next to no jobs standing to be created with keystone and a high amount of risk. Sad.

  3. The statement that few long term jobs are created would fall into the half truth category, and only then if one was being generous. While it is true the long term employees getting paid directly by Trans Canada would be in the few dozen range, other benefits will create jobs along the line and elsewhere. I made a good paying career contracting a certain aspect of maintenance to pipelines and related companies and so did many more people, in my field and others.
    Property taxes will be substantial and will create jobs. In Montana the governor figured $80 million per year. Of which $17 million went to state wide education and $63 million to local counties. The $17 million could hire 400 teachers. That $63 million could create 1800 jobs at the average family income in Montana. The county of McCone has had a declining population and tax base. It will get over $10 thousand per current resident. These taxes could mean jobs and/or a reduction of the current taxes of residents.
    The product in the line will secure jobs on the Gulf Coast at refineries. Over half of the expected shipments will be heavy bitumen which those refineries are designed to handle and currently they get that quality oil from Mexico which has declining production and Venezuela which is expected to direct its oil to China in coming years for political reasons. To keep these refineries full of the product they make the most money on secures jobs and investments.
    The bitumen in the line will come from expanded production in Alberta. Each of the over 400 kbpd of bitumen requires an investment of between $40 and $100 thousand, depending on whether it’s drilled or mined. So and investment of between $16 and $40 billion which provide work for suppliers of goods and services in the US. Canada is one of the few exporters which allows foreign companies to develop and own its domestic oil and US producers reap benefits which accrue to the US. Judging by the number of US citizens who can vote in US elections at the US consulate in Calgary, the direct employment in Alberta would be 60,000. Most of which would be in oil or in service directly to oil companies. Canada extends its Helmets to Hardhats program to US veterans so they can obtain employment in the oil sands. I wonder how many vets the Sierra Club hires in a year?

  4. I may be in a minority opinon here; but I fail to see who is or will be responsible for the inevitable spills and leaks from our aging oil pipiline infrastructure placed under excess load from high volume higher viscosity tar sand oil; transport from our Northern Border to our Southern Border. True; clean up jobs may be created; but is the environmental impact price we will pay worth the financial gain? I for one have mixed feelings regarding the Keystone XL pipeline project. I just do not believe the Canadians opted out of piping the tar sands oil to a geologically advantageous port facility like Vancouver Harbor for no good reason. I would be very scruitinous of the right of way clauses pertinent to the existing pipeline the additional section of interconnect and the legal responsibility for clean up of leakage or pipeline faiure. The BP Gulf Spill was bad. A keystone XL catastrophic failure could be far worse in a major river system like the Ohio or Mississippi rivers. Profit over Prudence is never a Good Idea.

    1. The pipeline operator is responsible for the cleanup of spills. What would give you the idea the Canadians have opted out of shipping to Vancouver or other west coast ports? Keystone was applied for first and is the farthest along but application has been made for a Kitimat line. And will be made for twinning of an existing Vancouver line. I disagree a pipeline spill would be as bad as the BP gulf spill. BP ran at I believe 60 kbpd for about 100 days. The biggest pipeline spill of late has been in the 20 kbpd range. And as far as damage to the Ohio or Mississippi Rivers go, the Keystone line goes no where near them.

      1. You’re probably right that a keystone spill wouldn’t be as big as BP, but it’s right in the ogawalla aquifier. Also, it crosses the missouri river, among many other major tributaries to the mississippi, like the platte, the red, etc….

  5. from transcanada.
    The $5.3-billion Keystone XL Pipeline Project is the largest infrastructure project currently proposed in the United States. Construction of the 1,179-mile pipeline will require 9,000 skilled American workers. The project will provide jobs for welders, mechanics, electricians, pipefitters, laborers, safety coordinators, heavy equipment operators and other workers who rely on large construction projects for their livelihoods
    In addition to construction jobs, an estimated 7,000 U.S. jobs are being supported in manufacturing the steel pipe and the thousands of fittings, valves, pumps and control devices required for a major oil pipeline.
    TransCanada has contracts with more than 50 suppliers across the U.S., including companies in Texas, Missouri, Pennsylvania, Michigan, Oklahoma, South Carolina, Indiana, Georgia, Maryland, New York, Louisiana, Oklahoma, Minnesota, Ohio, Arkansas, Kansas, California and Pennsylvani
    TransCanada is currently employing 4,000 Americans in Oklahoma and Texas on construction of the $2.3-billion Gulf Coast Pipeline Project, which is expected to be complete by the end of this year.
    Construction and development of the Keystone XL and Gulf Coast Pipeline Projects is anticipated to generate $20 billion in economic impact in the United States, including $99 million in local government revenues and $486 million in state government revenues during construction
    The pipelines will also generate an estimated $5 billion in additional property taxes during their operational life.
    The Canadian Energy Research Institute predicts that Keystone XL will add $172 billion to America’s gross domestic product by 2035 and will create an additional 1.8 million person-years of employment in the United States over the next 22 years

  6. Is it possible all of these companies — many of whom have been pushing for a climate bill — just want Keystone out of the discussion? It’s gotten so that even a bipartisan energy efficiency bill like Shaheen-Portman can’t get put up for a vote without members pushing Keystone riders onto it. Perhaps they’re thinking it’s better to end this particular fight so that other energy policy can move forward?

  7. Great thought provoking article. At Trust Across America – Trust Around the World, we believe that environmental sustainability programs alone do not make companies “trustworthy leaders” in the business community. It just means they have sustainability programs in place.

    Is this any different than the food manufacturers who were recently big donors to the anti-GMO food labeling campaign?

    At the end of the day, and according to the research we have been conducting for the past 5 years, there are very few companies who could be considered holistically trustworthy. This article provides further evidence to support our research.

    Barbara Kimmel, Executive Director,
    Trust Across America – Trust Around the World

  8. great article roz! perhaps the crux here isn’t that this is a sea change from these corporations in support of the pipeline, but that these corporations never had very strong environmental records to begin with. we laud corps for their environmental efforts, for perfect is the enemy of good, and something is better than nothing, i guess, if this were still 1980 and we could feign ignorance of the perilous impact of big business on big humanity. i remember in 1997 when BP rebranded to ‘beyond petroleum’ and did a massive global ad campaign to announce their greener and more progressive shift. at the time, alternative fuels comprised between 1.5 and 3 % of their total business activity and revenues. it’s been 15 years since then, and what have we gotten from BP? in a word, oy!

  9. Appreciate this article, because it allow us to pause and think again before we step further. Such checks and balances are vital for the sustainability. In addition, this also allow people to know and recognize the so called “Green” people, who are the opinion builders.

  10. Critical but typically omitted aspects of this discussion are as follows. Keystone would be a 2-way pipeline, with the southward bound leg carrying oil and diluent. The diluent is essentially a refinery byproduct solvent – originating from US gulf coast refineries – that no one uses much of anymore because it is photochemically reactive,etc. Once blended with the oil, diluent makes ineffective traditional skimmers or floating ‘pigs’ or booms, should a spill occur. It is like selling the oil with a built-in dispersant. Think about that for a minute.

    The northbound leg would carry diluent that has been re-refined from the pump-able mixture, as above.

    If one omits from a full life cycle evaluation, the future impacts on Canadian land and water and air and biota, as well as the global climate impacts of increasingly plentiful oil slowing a transition to less carbon intensive transportation, worldwide, then, yes, the incremental impacts of this pipeline are probably relatively small.

    Additionally, the petcoke waste stream produced (gummy charcoal like residues taken from tank bottoms and stills of refineries working with the tar sands oil) has an added, unique nastiness and may even produced in higher ratio per unit of oil refined. That crap is already piling up on the landscape and being sold for uncontrolled burning in China.

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