Pipeline issue has no simple answer

We lament for simpler times.

There was an era when we were oblivious to wars around the world, unseen dangers of new technologies, disease in other regions, or even the opportunity to cure disease. These are no longer simple times.

Our greater awareness came about for a number of reasons, from better education to mass communication that allows us to know just about anything from just about anywhere. This awareness distorts our reality because it gives the appearance airplane crashes or ferry sinkings are far more common than they really are. As a consequence, some of us fear to fly even though we are far more likely to be harmed while driving to the airport than on a domestic flight.

We also believe our children are now in harm’s way, so we now drive our kids to school. Gone are the carefree days many of us enjoyed when we were children and could walk a mile to school. We are safer now, but we feel less safe. Our kids are coddled and protected, deprived of skinned knees and those safer dangers we enjoyed when we were kids.

I don’t think we will ever return to a simpler world. There is just too much information, too much technology and too many interventions we can make to deny our fate for us to ever put that Genie back in the bottle.

Yet, we still maintain simplistic public dialogs. Decisions we make as an economy and society are now exceedingly complex, but the extent of the options are rarely presented that way.

The complexity quandary has come home to roost. Through our town run trains towing tanker cars filled with Dakota oil. The Port of Albany is proposing that they prepare their oil storage facilities to also handle Alberta heavy oil sands crude.

Many of us are appropriately concerned about the railcar transport of oil. While the probability of an accident is very low, the cost can be high. We saw the human carnage in nearby Lac Megantic, Quebec, when trains laden with crude oil derailed. And, on April 39, a number of tankers carrying crude oil derailed, caught fire, and fell into the James River in Lynchburg, Va. Were a similar derailment to occur on a train that hugs the rocky cliffs along Lake Champlain, the environmental damage would be extreme.

By far, the safest way to transport crude oil is by pipeline. Yet, environmentalists’ justifiable concern for global warming has, to date, prevented the Keystone XL Pipeline from being built because it would bring to U.S. markets oil that generates about 10 percent more greenhouse gases than conventional oil, primarily because of the energy needed to extract the oil from the Alberta sands.

Most all scientists agree that global warming is going to cause numerous global displacements, to cultures and economies. As a matter of prudent public policy, we should cut back significantly on our use of the dirtiest fossil fuels, as defined by the amount of greenhouse gases generated per unit of energy. Using that sensible measure, we should first stop burning coal, then heavy oil, then light oil, and, finally, natural gas.

We don’t even talk about coal anymore. Instead, our public dialog is focused in preventing oil from being extracted from Alberta. The problem is, though, that the Alberta oil will be extracted and will be sold — to China. There will be no net reduction in greenhouse gases as would be realized if the oil replaced American coal. Actually, greenhouse gas emissions will rise as the oil must be moved across the Pacific to China.

We miss the big picture if our approach becomes ideological rather than risk-based. Risk management requires us to assess the risk of all alternatives and then mitigate the risk of the worst alternative. Instead, we focus on Keystone XL even though Alberta oil sands extraction in 2010 produced about the same amount of greenhouse gases as the coal-fired power plants in Wisconsin alone.

Lines in the sand make for good activism, but we really need a more comprehensive discussion of risks if we are going to leave a good world for our children. Our insatiable demand for fossil fuels is the real culprit.

Colin Read chairs the finance and economics faculty at SUNY Plattsburgh and has published a dozen books on local and global finance and economics.