Energy
3:42 pm
Wed October 9, 2013

One Thing Obama Can Do: Decide The Fate Of The Keystone Pipeline

Originally published on Wed October 9, 2013 3:58 pm

Journalist Ryan Lizza says there's one far-reaching, controversial issue President Obama will soon get to decide all by himself, without having to ask Congress. He alone can approve or reject construction of the Keystone XL pipeline, designed to take heavy crude oil extracted from Alberta, Canada, through America's heartland to refineries on the Gulf Coast.

The oil here isn't conventional oil, Lizza tells Fresh Air's Dave Davies: "It's not really oil at all, it's oil sand — it's basically a mixture of oil, sand, water and some other clay deposits, and to extract that oil from this asphaltlike mixture, it requires a lot of energy."

Many environmentalists believe that blocking the Keystone pipeline is critical to addressing climate change. They worry that extracting, refining, selling and burning this oil will result in so much greenhouse gas in the atmosphere that it will dramatically change the climate to the point of no return.

Meanwhile, proponents say it will make an important contribution to energy independence. In a recent piece in the New Yorker Lizza explores the argument that the pipeline will have a major environmental impact and profiles a billionaire former hedge fund owner who has thrown himself in the battle to stop Keystone XL.


Interview Highlights

On how the "unconventional" oil is extracted — and why processing takes so much energy

They basically have two methods for getting [the oil]: In places where it's close to the surface, they can essentially strip mine it. ... About 20 percent of this massive area in Northern Alberta they can strip mine.

The other 80 percent — the oil sand — is deep below the ground. And it's covered by a capstone — basically rock. ... [Extracting that oil is] an even more energy-intensive process than the mining. You're emitting a lot of greenhouse gases in the process, and so the reason it's so controversial is that a lot of smart climate scientists have pointed out that if we start exploiting all of the world's unconventional oil, we're not going to be able to solve the climate change problem.

On how it got the name "tar sand" — and why it would be hard to clean up a spill

It's really that it's stickier [than conventional oil]. When it's at room temperature this stuff has the consistency of almost peanut butter, [and oil producers] have to heat it up to get it to flow. They have to mix it with another substance to get it to actually flow through the pipeline. This is why industry and government calls this stuff "oil sand" and a lot of activists call it "tar sand." The reason it got the name "tar sand" is it does look like a tarlike substance. It's not as viscous as conventional oil, unless you add chemicals to it or heat it up. So when it spills, it just sort of creates this tarry mess that is much more difficult to sop up than traditional oil.

On how the Keystone pipeline became a galvanizing issue for environmentalists

In the elections of 2010 the Republicans took over the House of Representatives, and the mood in Washington, especially with the still-struggling economy, became very, very hostile to doing anything that looked like putting a price on carbon. Obama himself stopped talking about it, so I think a lot of environmentalists were searching for a galvanizing issue that would both bring activists together but also seize the attention of the public, and I think that's really why Keystone became such a big deal at that moment.

There's a debate among environmentalists of whether it was the right move. There are plenty of environmentalists who think that the most important thing they should be doing is demanding very aggressive EPA regulations on power plants and that would have a far bigger effect on reducing greenhouse emissions than stopping this pipeline. But the pipeline sort of took on a life of its own when there wasn't much else going on about climate change.

On the Canadian energy industry

Calgary is a city built on this resource. Calgary is like a classic boom town; all of the skyscrapers in Calgary are named after the energy companies that are extracting the oil from the oil sands, or the banks that are funding them. There are construction cranes all over. And Canada ... is defining itself as an energy superpower. I think it surprises a lot of people to hear they have the third-largest oil reserve in the world, behind Venezuela and Saudi Arabia.

What you find in Calgary, in Canada, is a lot of industry officials scratching their heads and not really understanding why they have become the face of climate change for the environmental community. ... The big thing they're trying to do now after dealing with the campaign against Keystone and the campaign against extracting oil from the oil sands — they're spending a lot of time both for real and, frankly, for PR purposes, trying to reduce the amount of carbon that is emitted in extracting this oil from the ground. Now some people might look at that and say, "That's like trying to get someone to lose weight by going from Big Macs to Quarter Pounders with Cheese; the whole point is to stop taking it out of the ground." ... Environmentalists look at this and they think it's mostly PR.

On the Keystone report that the State Department delivered to the president

The central finding in the draft environmental impact statement ... was, if you don't build Keystone, the Canadians will sell this stuff anyway, they'll build pipelines to their east coast, to their west coast, and they'll send it to the Gulf of Mexico via rail — and by the way, sending oil by rail releases a whole lot more greenhouse gas emissions than putting it in a pipeline. So that became really the most controversial finding of the State Department's report. ...

The process requires that other government agencies weigh in on whether the State Department got this right or not. The EPA quickly challenged that market analysis and said, "You know what? We're not convinced that the State Department got this right. We don't think they're looking at the latest information and the latest data and we're not so sure that it's true that this oil will get to market absent the Keystone pipeline." And that was a big moment for the EPA, a very gutsy moment.

On what Keystone could mean for Obama

Barack Obama gave a very important speech on his second-term climate change priorities, and at the very last moment he inserted some language into that speech about how he would settle this issue of the Keystone pipeline. And he said for him, he doesn't want to see that pipeline approved if it would significantly contribute to an increase in greenhouse gas emissions. So how the State Department settles that question is what everyone has their eye on. ...

I think there's an important moment here for Barack Obama if he chooses to take it — even if he thinks that denying the permit to build Keystone won't have a huge impact on greenhouse gas emissions — he could use it as a symbolic turning point in the kind of energy future he wants America to have. That is, he might say, "At some point we have to move away from fossil fuels and I'm using this moment to lead a crusade in America to move away from fossil fuels."

On how this is something Obama can do without congressional support

As we sit here in October of 2013, immigration reform seems dead, gun control legislation is dead, and the government is shut down with no grand bargain in sight. So a lot of environmentalists say, "Why not concentrate on the things you can do unilaterally?" And one of those things you can do unilaterally is address climate change, both on the regulatory side with the EPA but also by killing this Keystone project. So in this complicated calculation about whether to approve this pipeline or not, you have to think that perhaps that will enter into Obama's thinking and that he realizes as his domestic agenda that requires congressional approval withers, maybe it makes some sense to concentrate and act on the things he can do on his own.

Copyright 2014 NPR. To see more, visit http://www.npr.org/.

Transcript

TERRY GROSS, HOST:

This is FRESH AIR. I'm Terry Gross. Our guest, journalist Ryan Lizza, says there's one far-reaching, controversial issue President Obama will soon get to decide all by himself without having to ask Congress. He alone can approve or reject construction of the Keystone XL pipeline, designed to take heavy crude oil extracted from Alberta, Canada through America's heartland to refineries on the Gulf Coast.

Many environmentalists believe that blocking the Keystone pipeline is critical to stopping and reversing global warming, while proponents say it will make an important contribution to energy independence. In a recent piece in the New Yorker, Lizza explores the argument that the pipeline will have a major impact on climate change, and he profiles a billionaire former hedge fund owners who's thrown himself into the battle to stop Keystone XL.

Ryan Lizza is the Washington correspondent for The New Yorker. He spoke to FRESH AIR contributor Dave Davies.

DAVE DAVIES, HOST:

Well Ryan Lizza, welcome back to FRESH AIR. You write in this piece that the Canadian oil deposit, which would be extracted for the Keystone XL pipeline, is the most controversial oil deposit in the world. Why?

RYAN LIZZA: So as the world's conventional deposits of oil dry up, the oil companies go searching for unconventional oil, and it turns out that the biggest unconventional oil deposit in the world is in Northern Alberta, Canada. And it's something called oil sand. It's not really oil at all, it's oil sand, and it's basically a mixture of oil, sand, water and some other clay deposits.

And to extract that oil from this asphalt-like mixture, it requires a lot of energy, and they basically have two methods for getting it. One is they just - if it's in the places where it's close to the surface, they can essentially strip mine it. It's a really unusual thing to watch. I went up there, and they're literally strip mining oil. They're not sucking it out of the ground.

And then they put it through - they mix with certain things, and they spin it around in centrifuges, and they eventually get all the sand and other - and clay and the stuff they don't want separated from the oil, which they do want, and they can of course sell that.

And about 20 percent of this massive area in Northern Alberta, they can strip mine. The other 80 percent, the oil sand is deep below the ground, and it's covered by a capstone of basically rock. And what they do in that case is they drill a couple of wells, and they inject steam down into the oil sand and heat it up to extremely high temperature, to the point where the sand and the oil separate, and the oil sort of falls to the bottom of the cavity that it's contained in.

And then the second well sucks up that oil. That's an even more energy-intensive process than the mining. You're emitting a lot to greenhouse gases in the process, and so the reason it's so controversial is that a lot of smart climate scientists have pointed out that if we start exploiting all of the world's unconventional oil, we're not going to be able to solve the climate change problem.

DAVIES: Now so if this is done, if this steam is injected deep down to the wells, the sand is separated from the oil, you end up with a heavy crude. That's what would be moving through the Keystone XL pipeline if it's built, right?

LIZZA: Exactly, exactly. The oil folks call it bitumen, it's got a special name, this oil sands oil, bitumen, and that's what - now the Canadians have a problem. They can get this bitumen out of the ground, and they're - all of the world's big oil companies are there mining it and extracting it, and their major problem is it's all landlocked.

So Canada has the world's third-largest oil reserves, but they can't sell it, or at least they have a much harder time selling it than, say, Venezuela or Mexico or the Saudi Arabians. They can't ship it because they don't have a port nearby. So they have to get it out by pipe or train. And they've been having a really tough time connecting their oil supplies with the refiners around the world.

And so the biggest refining capacity in the world is in the Gulf of Mexico, and the network of Keystone pipelines is designed to connect Canadian oil producers with the refineries in Texas and Louisiana. And that's the number one goal for the oil industry of Canada, and now a lot of smart environmentalists have looked at this problem that the Canadians have and say huh, well, we don't want these guys exploiting these unconventional oil sources because we think that's going to prevent us from dealing with climate change, so maybe the best way to slow down the exploitation of the oil sands is to prevent the Canadian oil companies from getting the stuff to market.

And that's why environmentalists seized on the campaign against the Keystone pipeline.

DAVIES: Now I want to be sure we understand why some environmentalists regard this as such a critical issue, this pipeline. You say that it takes a lot of energy to extract this crude oil from the sand that it's embedded in under Alberta in Canada. Is the concern that the expense of so much energy in the extraction process releases carbon, and that adds to the atmosphere?

Or is it that if we in the industrial world tap this huge reserve that it's simply going to feed our dependence on fossil fuels and make our dependence on them irreversible and lead us towards, you know, catastrophic climate change? Or is it both?

LIZZA: Yeah, it's both, but you're right to emphasize the latter. It's basically that the point of view of environmentalists is we've got to move off fossil fuels, and if you start - you know, as soon as the conventional oil starts drying up, if you start figuring out all kinds of sophisticated ways to get the unconventional oil out of the ground, we're never going to move off of fossil fuels.

It's - you know, when climate scientists like James Hansen or activists like Bill McKibben look at the math behind how much carbon we have in the ground and how much carbon the atmosphere can absorb, they will argue quite persuasively that at some point you have to start leaving stuff in the ground. And that's why they argue that you can't - you can't just simply move into exploiting every last drop of conventional and unconventional oil. The whole game has to be to move away from fossil fuels in general.

DAVIES: And to what extent are the risk of spills on the pipeline and damage to wildlife, habitat issues...

LIZZA: I mean, those issues were very, very important early on in the campaign against Keystone, and the first proposed route of the Keystone XL pipeline went over a very important aquifer. Trans-Canada, the company that's building this pipeline, listened to those concerns, and some - and there was a great campaign against it, and they changed the route so the aquifer issue has been dealt with.

There's still some concern that Canadian crude is more corrosive to pipelines and that there's a higher danger of accidents with this kind of oil. Now the State Department has been looking at that very, very closely and so far has not been convinced that there is an increased risk with Canadian crude versus other sources of crude.

But when the State Department, which is looking at all the issues surrounding Keystone, releases its final report on this matter, they will have a sort of final word on that issue, which isn't totally settled yet. There have been at least two pretty bad spills of Canadian crude that are no doubt more difficult to clean up. Whether the Canadian crude is more corrosive to pipelines is still debated.

But everyone agrees that when this stuff does spill, it causes a bigger mess, and it's much more difficult for the EPA and other agencies to actually clean up.

DAVIES: And that's because it's just dirtier?

LIZZA: It's not that it's - it's really that it's stickier. It has the - when it's at room temperature, this stuff has the consistency of almost peanut butter. They have to heat it up to get it to flow, or they either have to heat it up or - they have to mix it with another substance to get it to actually flow through the pipeline.

This is why industry and government calls this stuff oil sand. A lot of activists call it tar sand. And the reason it got the name tar sand is it does look like a tar-like substance. So it's not as viscous as conventional oil unless you add chemicals to it or heat it up.

So when it spills, it just sort of creates this tarry mess that is much more difficult to sop up than traditional oil.

DAVIES: And the federal government gets to make the decision here because it crosses an international border. Is that why the State Department gets involved?

LIZZA: Yeah, under our law, if you want to build a pipeline across the United States-Canadian border or any border of the United States, the State Department makes that determination. And then there's a process which can kick that decision up to the president. Most pipeline decisions never reach the president's desk because they're not controversial, and the State Department either just approves them or disapproves them.

This one will certainly reach Obama's desk. So everyone sort of agrees that whatever the State Department says, the president at the end of the day will make the final determination.

DAVIES: Now you write that it was more or less a foregone conclusion until the spring of 2011 that the Keystone XL pipeline would be approved. What changed?

LIZZA: Really the campaign against it strengthened, and a lot of credit goes to Bill McKibben, the environmental writer and activist, who really sort of helped organize the major environmental groups in America and really throughout the world against Keystone. And the other thing that happened was this became a political football with Republicans vehemently supporting the construction of the Keystone - to be precise the Keystone XL pipeline, and many Democrats, although certainly not all of them, opposing it.

And the Republicans inserted some language, in Congress the Republicans inserted some language that demanded that the Obama administration quickly approve the pipeline. The State Department looked at that order and said you know what, we actually don't have enough time to make a fair decision on this, so even though Congress has instructed us to approve it, we are saying we can't approve it, and, you know, Trans-Canada, you guys have to go back to the drawing board.

So the Republicans probably made a tactical mistake there in that while their intent was to get a quick approval, it actually sort of backfired, and the administration denied the permit altogether. But that denial just slowed the entire process down. I think most people believe that the Obama administration was really not paying attention to the activist campaign against the pipeline and that, as John Podesta, one of Obama's advisor who opposes this pipeline, as he told me, this thing was rolling towards approval.

But the Republicans' attempt to get a quick decision delayed the whole thing, and it really allowed the sort of McKibben-led campaign against the pipeline to - and that movement to build and to gain some energy and some attention and push a lot more people and a lot more mainstream folks and politicians into the movement.

DAVIES: We're speaking with Ryan Lizza. He is the Washington correspondent for the New Yorker. We'll talk more after a short break. This is FRESH AIR.

(SOUNDBITE OF MUSIC)

DAVIES: This is FRESH AIR, and if you're just joining us, our guest is Ryan Lizza. He's the Washington correspondent for The New Yorker magazine. He's recently written about the debate over the Keystone XL pipeline.

Now you write that there were some folks, environmental scientists like James Hanson who wrote pieces suggesting that we were approaching a tipping point on global warming and that putting the brakes on oil extraction was critical, that the Keystone XL pipeline was therefore critical.

The movement builds. There were some big demonstrations, some civil disobedience in Washington, and then this all gets the attention of a very rich guy named Tom Steyer, who becomes a critical piece of the story. Tell us about him.

LIZZA: Yes, so Steyer is very interesting, and he grew up in New York and went to Yale and then worked for Goldman Sachs for a couple years and very quickly became a sort of future leader of Goldman Sachs and abruptly left to move to California because he wanted to start his own hedge fund.

And the hedge fund, you know, he started with managing about $10 million, and when he left that hedge fund last year, he was managing about $20 billion. And he himself is - Forbes estimates he's worth about $1.4 billion.

And he was always involved in politics. He was a philanthropist. But he's now left the world of high finance and has left his hedge fund, and he's promised to devote himself and his billion dollars to politics and specifically to climate change.

So he's promising to be one of the major political forces in this country, and specifically his intent is to make climate change an issue for voters.

DAVIES: And he's now targeted the Keystone pipeline.

LIZZA: That's right. He was very influenced by Bill McKibben and some of McKibben's writings, and he has decided that the climate change issue of the moment is the Keystone pipeline, and he's doing everything he can to convince the Obama administration not to approve that pipeline.

DAVIES: Let's talk about this debate over the Keystone XL pipeline, which as you say got new life in 2011 when there was a delay and a chance for environmentalists to build a movement. Give us some sense of the arc of President Obama's activity on climate change and the environment since he was, you know, since he was inaugurated, yeah.

LIZZA: That's a great question because that's really where - that's really where Keystone comes out of, comes out of environmentalists' frustration with the Obama presidency and what they believe is his inaction on climate change.

So in 2008, Obama campaigned on climate change. It was one of his core - if you look at his big policy initiatives in the 2008 campaign, dealing with climate change was no doubt at the top of the list. As president he pushed a bill known as cap and trade that would have put a price on carbon. It was a major, extremely complicated piece of legislation and was competing with other Obama agenda items in 2009 and 2010 like health care and the stimulus and financial regulation.

It passed the House, but it died in the Senate, and it died in the Senate for a number of reasons. There were some Democrats from coal states who opposed it, and it just couldn't - the White House just couldn't find the 60 votes that all legislation in the Senate needs these days to overcome a filibuster.

And so the entire environmental community was unusually united around passing that cap and trade legislation in 2009 and '10. I think there was quite a bit of optimism, especially after it passed the House of Representatives, that it could be done. When it failed in the Senate, the whole climate change community and the environmental organizations sort of fractured.

There was no unifying issue anymore. And of course in - the elections of 2010, the Republicans took over the House of Representatives, and the mood in Washington, especially with the sort of still-struggling economy, became very, very hostile to doing anything that looked like putting a price on carbon.

And Obama himself stopped talking about it, so I think a lot of environmentalists were searching for a galvanizing issue that would both bring activists together but also seize the attention of the public, and I think that's really why Keystone became such a big deal at that moment.

You know, there's a debate among environmentalists of whether it was the right move. There are plenty of environmentalists who think that the most important thing they should be doing is demanding very aggressive EPA regulations on power plants and that would have a far bigger effect on reducing greenhouse emissions than stopping this pipeline. But the pipeline sort of took on a life of its own when there wasn't much else going on about climate change.

DAVIES: You know, and you describe that, you know, there are conversations in which folks press Obama on the urgency of climate change and environmental issues. And he kind of tells them, look, folks are thinking about jobs now.

LIZZA: Yeah, there's - you know, Tom Steyer, this billionaire who's really become quite active on climate change issues, he had a - earlier this year he had a fundraiser for Obama, and he invited a small group of people into his living room to basically lobby Obama on the Keystone XL pipeline.

And most accounts of these conversations where Obama is pressed on Keystone, almost every account that I could uncover suggests that Obama himself is not persuaded that killing the Keystone pipeline is the most important thing he could do to reduce greenhouse gas emissions.

And so at this meeting at Tom Steyer's house in San Francisco, in his living room, these 15 people sort of go around one by one, just pressing Obama on the pipeline. After the meeting is over, Obama addresses a larger group, and he basically says look - he doesn't mention Keystone at all, but he does mention climate change, and he basically says look, you have to understand with the economy struggling, with people who haven't had a raise in years, these environmental issues and specifically greenhouse gas emissions and climate change just are not at the top of Americans' list of priorities right now and that if you want to put them at the top of the list, you have to go out there and make the case.

And Steyer really came out of that meeting thinking that the president was challenging him, you know, that he was basically saying go out and build political support for this because it's not going to happen without that.

DAVIES: As Roosevelt once said, that's a great idea, now go out and make me do it.

(LAUGHTER)

LIZZA: Exactly, that is exactly right. And Obama himself tells that story. You know, when I was fact-checking that, there's some dispute over whether Roosevelt really said that or not, but whether he said it or not, Obama himself has recited that Roosevelt story very often, especially to liberals who are pushing him on some issue that there's not actually majority support for in the country.

And very frequently that was his message to Tom Steyer and the environmental activists in San Francisco that night, and that in general has been his message to people who want bolder action on climate change: make me do it.

GROSS: Ryan Lizza will continue his interview with FRESH AIR contributor Dave Davies in the second half of the show. Lizza's article about the pipeline was in a recent edition of the New Yorker. I'm Terry Gross, and this is FRESH AIR.

(SOUNDBITE OF MUSIC)

GROSS: This is FRESH AIR. I'm Terry Gross. Let's get back to the interview with Ryan Lizza about his recent article in The New Yorker about the controversy over the proposed Keystone XL pipeline, which would take heavy crude oil, extracted from Alberta, Canada, through America's heartland to refineries on the Gulf Coast. Many environmentalists are trying to block the pipeline because they think it would intensify climate change. Supporters of the pipeline say it would make us less dependent on oil from the Middle East.

President Obama has the power to approve or reject construction of the pipeline. Ryan Lizza spoke with FRESH AIR contributor Dave Davies. When we left off, they were talking about Tom Steyer, the billionaire former hedge fund owner who's trying to stop the pipeline.

DAVIES: You wanted to get the other side of this so you went to Alberta, Canada and visited the folks who extract this oil and want to ship it through the Keystone XL. What did you hear?

LIZZA: You know, it was a fascinating trip. I went up to, you know, after spending some time in San Francisco with Steyer, I went to both Calgary, where, which is a city basically just built on this resource. I mean Calgary is like a classic boomtown. All of the skyscrapers in Calgary are named after the energy companies. They're extracting the oil from the oil sands or the banks that are funding them. There are construction cranes all over. I mean the city, the city is booming because of this resource.

And Canada itself, I think people still don't realize this - I certainly didn't before I started looking more closely at this - Canada has basically become, or is defining itself, as an energy superpower. I think it surprises a lot of people to hear that they have the third-largest oil reserve in the world behind Venezuela and Saudi Arabia. And you know, what you find in Calgary in Canada is a lot of industry officials scratching their heads and not really understanding why they have become the face of climate change for the environmental community.

You meet a - I mean not to engage in stereotyping, but you meet a lot of extremely pleasant, nice Canadians who really don't believe they're doing anything wrong. And they go to these international climate conferences and they're targeted and yelled at, and they think, why can't we - we've got oil just like everyone else does, why can't we sell it? And look, the big thing they're trying to do now after dealing with the campaign against Keystone and the campaign against extracting the oil from the oil sands, they're spending a lot of time, both for real and frankly for PR purposes, trying to reduce the amounts of carbon that is emitted in extracting this oil from the ground.

Now, some people might look at that and say, you know, that's like trying to get someone to lose weight by going from, you know, Big Macs to Quarter Pounders with cheese.

(LAUGHTER)

LIZZA: The whole point is to stop taking it out of the ground. So I spent a lot of time with industry people who were taking me through all of the environmentally sound things they're trying to do to make exploiting the oil sands oil more environmentally sound. Environmentalists look at this and they just they think it's mostly PR.

DAVIES: So they tell you we're reducing the amount of energy it takes to extract it. Our environmental policies are in many ways more progressive than yours. We tax carbon.

But I guess in terms of the big question of whether the planet turns away from fossil fuels, none of that really matters, right?

LIZZA: Exactly. And look, there's also a sense that we can't believe that we - Canada - are being lectured about the environment by the United States of America. In Alberta they have a carbon tax. Now, a lot of people will tell you the carbon tax is a little too low to do a whole lot, but they do have a carbon tax. And the government right now is in very serious - that carbon tax is not going to be lowered. It's most likely going to be raised. And the campaign against Keystone has pushed both the government in Alberta and the federal government in Canada to think very seriously about an even more aggressive plan to address climate change. And that could be one of the outcomes of this debate over whether to build a pipeline or not.

You know, so I had this - in Washington I had this meeting with the Canadian ambassador and his main job down here right now is to convince the administration to approve this pipeline, which is incredibly important to the Canadian economy. And you know, we're sitting in his office in downtown Washington, and he points out the window up at the Capitol, and I don't know if you know this but there's a giant coal-fired power plant next to the U.S. Capitol. Now, in Canada, they basically are on their way to getting rid of all of their power plants that run on coal, which is a very big environmental achievement. And he sort of incredulously points towards the Capitol at our coal power plant and, you know, sort of goes on about who are the Americans to be lecturing us about climate change and fossil fuels? And so that's really the sense of both government industry officials, they feel like they're under siege, they feel like they're being unfairly targeted, and they will point out that right now the greenhouse gas emissions that emanate from the oil sands are, you know, an extremely low percentage - both of Canada's overall greenhouse gas emissions and certainly worldwide greenhouse gas emissions.

They also argue that, look, if the administration, if the administration, if the Obama administration does not approve of this pipeline - one, it will damage U.S.-Canadian relations. You know, the extent to which it will damage them is a little unclear. But two, they will find a way to get this stuff to market anyway, and that's really one of the most important pieces of this puzzle here. The Canadians are already trying to build pipelines to their east and west coasts and they're already increasing the use of rail to get this oil down to the Gulf of Mexico. You don't need any special approval from Barack Obama to ship the oil by train to the Gulf of Mexico. And so they'll argue that, look, yes, we need the Keystone pipeline, it's the best way to get the oil to Gulf, but if you don't approve of it, we'll figure out a way to sell the stuff anyway, it's just too valuable for us to give up.

DAVIES: We're speaking with Ryan Lizza. He is the Washington correspondent for The New Yorker magazine. And we'll talk more after a short break.

This is FRESH AIR

(SOUNDBITE OF MUSIC)

DAVIES: This is FRESH AIR. And if you're just joining us, our guest is Ryan Lizza. He is the Washington correspondent for The New Yorker magazine. He has a recent piece about the debate over the Keystone XL pipeline and how it fits into the Obama administration's agenda.

Now, this comes down to President Obama and his administration making a big decision here.

LIZZA: Yeah.

DAVIES: And there are agencies that have a role to play. The State Department - you note - did a draft environmental impact statement which did not make environmentalists happy. What did they find?

LIZZA: They didn't. So the central finding, the most important finding in the draft environmental impact statement - which is the document that is going to tee this issue up for the president, the central finding was that if you don't build Keystone, the Canadians will sell this stuff anyway. They'll build pipelines to the East Coast, to their West Coast and they'll send it to the Gulf of Mexico via rail. And oh, by the way, sending oil by rail releases a whole lot more greenhouse gas emissions than putting it in a pipeline. And so that became really the most, the sort of most controversial finding of the State Department's report. And the EP - so the process here - so there's a very elaborate and specific process for how this all gets decided, and the process requires that other government agencies weigh in on whether the State Department got this right or not.

And the EPA quickly challenged that market analysis and said you know what, we're not convinced that the State Department got this right. We don't think they are looking at the latest information and the latest data. And we're not so sure that it's true that this oil will get to market absent the Keystone pipeline. And that was a big moment for the EPA, a very sort of gutsy moment because agencies don't always challenge each other like that. And so now the State Department goes back and looks at all of the comments and criticism of their draft environmental report and they have to come up with a final report.

And so in the meantime, Barack Obama gave a very important speech and said - a very important speech on his second term climate change priorities - and at the very last moment he inserted some language into that speech about how he would settle this issue of the Keystone pipeline. And he said for him, he doesn't want to see that pipeline approved if it would significantly contribute to an increase in greenhouse gas emissions. And so how the State Department settles that question is what everyone has their eye on. If they stick with their original conclusion, the pipeline will be approved. If they decide that the EPA and other critics of that conclusion were right, then Obama has a tougher decision to make.

DAVIES: Now, while all of this is happening, Tom Steyer, you know, the billionaire former hedge fund manager who's devoted himself to politics and climate change, has started making a series of commercials - which he's airing 90 seconds spots - that's long for a political ad - airing I think with the Sunday morning talk shows. Tell us about those ads and who their target is.

LIZZA: Yes. I actually went out with him on one of these shoots. We went down to the Gulf of Mexico and rode around in a little boat with his film crew searching for an oil tanker that he wanted to use as a backdrop for his first ad. And it was right outside the Valero refinery, and Valero is one of the big refineries that would buy a lot of the Canadian crude oil if Keystone is built. And so the first ad was really about where Canadian crude oil would end up. And he argued in this ad that the oil would come through the Keystone pipeline to the refineries in the Gulf of Mexico, where he was standing in the ad. And then it would get refined into, you know, gasoline and diesel fuel and jet fuel and all the other products we make with crude oil. But then it would be sold off into the international market and out of America. And sort of his main point was that building Keystone wouldn't do much for energy independence in the U.S.

DAVIES: It would go to China.

LIZZA: It would go to China.

(LAUGHTER)

LIZZA: And look, I mean, you know, that's - I don't really, I'm not convinced that that's a particularly good argument for not building the Keystone pipeline. The international oil market is what it is. The stuff gets imported to the U.S., where we have a huge amount of refining capacity. Some of it gets sold in America, some of it gets sold on the world market, depending on market forces. To me that's not the most important question. To me the most important question on Keystone is the climate change question - will it increase greenhouse gases or not. And even beyond that, I think there's an important moment here for Barack Obama if he chooses to take it. Even if he thinks that denying the permit to, denying Keystone, won't have a huge impact on greenhouse gas emissions, he could use it as a sort of symbolic turning point in the kind of energy future that he wants America to have. That is, he might say at some point we have to move away from fossil fuels and I'm using this moment to lead a crusade in America to move away from fossil fuels. I don't think that's likely to happen, to be totally honest, but I think that's one argument that the folks who are against Keystone have made that is not just about greenhouse gases but about political symbolism that to me, at least, is persuasive.

DAVIES: You know, whenever I come across a complicated issue, I love to find an independent, empirically oriented, solid journalist to help me sort through it. And you know, you report in the story that privately the president's statements seem to suggest he's somewhat skeptical of the environmental claims.

LIZZA: Yeah.

DAVIES: Some, as you said, some smart climate scientists say this is a turning point - whether we're going to move in the direction of further dependence on fossil fuels or begin to wean ourselves. Help us out here. Who is making the stronger argument?

LIZZA: You know, this is a tough decision. I do think - one of the things that Obama has said privately, that has been repeated to me, he's basically said that he is skeptical of the pro-Keystone argument about jobs. So some of the people who want to build Keystone argue it will create a lot of new jobs, you know, it's a massive infrastructure project, a pipeline going hundreds of miles. That argument, the State Department suggests, is not very sound. Long-term, permanent jobs, I think the State Department would say would be a couple, a few dozen. You know, it doesn't take that many people to keep the pipeline up and running once it's built. So Obama has said privately he doesn't buy the jobs argument. But he's also said that he doesn't really buy the greenhouse gas argument and that he takes the side of the draft State Department report when it says that Canada will find a way to get this stuff out of the ground and ship it to market with or without the Keystone pipeline and that Obama thinks that this is a side issue that environmentalists seized on for various reasons but is, from a policy perspective, the best thing that he could do is move forward with aggressive EPA regulations that move us off of coal, right.

I thought that the argument from environmentalists that Obama could use this as more of a symbolic moment, a symbolic moment to tell the world what kind of a country America wants to be when it comes to energy. Do we want to be a country that continues down the path of relying too much on fossil fuels, or by killing this pipeline does he make a statement to the world that we're turning a corner here and we're no longer going to be a fossil fuel dependent nation.

And does that give him some moral authority then, as he finishes his presidency, to negotiate an international treaty to limit greenhouse gas emissions? Which is really the sort of - the whole game here is to get a binding international agreement to do something about what is obviously a global problem. And that by killing Keystone he could build some momentum towards that important goal and that that would be a defining part of his legacy on this issue.

DAVIES: You know, so much of what the president seeks to do in Washington these days is thwarted by, you know, the House of Representatives and Republicans. Does he get a clear shot here? Is this his decision, the Keystone XL?

LIZZA: That's a great point. It is. And I think that's what a lot of environmentalists are arguing, is, you know, maybe - you'll hear this a lot from folks like Steyer - maybe it made sense in early 2013 for Obama to set aside Keystone as some fringe issue that was just going to complicate his political life.

Because back in early 2013 he believed he had a good chance of getting immigration reform. He even believed he had a good chance of getting some gun control legislation. And he thought maybe with the election behind him that he would get the elusive grand bargain to deal with all of the structural budget issues.

As we sit here in October of 2013, immigration reform seems dead. The gun control legislation is dead. And the government is shut down with no grand bargain in sight. And so a lot of environmentalists say why not concentrate on the things that you can do unilaterally. And one of those things you can do unilaterally is address climate change, both on the regulatory side with the EPA but also by killing this Keystone project.

And so that, you know, in this complicated calculation about whether to approve this pipeline or not, you have to think that perhaps that will enter into Obama's thinking and that he realizes as his domestic agenda that requires congressional approval withers, maybe it makes some sense for him to concentrate and act on the things that he can do on his own.

DAVIES: Ryan Lizza, thanks so much for spending some time with us again.

LIZZA: Hey, thank you very much for having me.

GROSS: Ryan Lizza spoke with FRESH AIR contributor Dave Davies. Lizza's article about the Keystone XL pipeline was published in a recent edition of the New Yorker. You'll find a link to it on our website, freshair.npr.org. Transcript provided by NPR, Copyright NPR.

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