A Progressive Divide: Unions Vs. Environmentalists on Keystone XL

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Since it was proposed in 2008, the TransCanada ( TRP )-owned Keystone Pipeline project has faced fierce opposition from environmentalists, who say that in addition to creating a whole host of environmental worries, the pipeline's greenhouse gas emissions will push climate change past the point of no return.

"If Canada proceeds [with Keystone], and we do nothing, it will be game over for the climate," wrote NASA scientist James Hansen in a New York Times op-ed last year.

Typically a solid voting bloc for the Democratic Party, environmentalists are hoping that they carry enough political clout to influence President Obama to reject the pipeline project, which would ferry over 700,000 barrels of crude oil from Canadian tar sands to refineries on the Gulf of Mexico.

The proposed Keystone route map. Source: TransCanada [Click to enlarge]

But green activists face stiff opposition from oil and gas interests. The fact that energy giants like ExxonMobil ( XOM ), Chevron ( CVX ), BP ( BP ), Royal Dutch Shell (NYSE:RDS.A), and Valero ( VLO ) are in support of Keystone XL is not surprising, of course. But what environmentalists might not have expected is the pro-pipeline stance of their traditional allies on the Left, labor unions.

Citing the abundance of jobs the pipeline would create -- a 2010 TransCanada Study said Keystone would create over 100,000 jobs, while a State Department report from March said 42,100 jobs would be created -- the AFL-CIO, the country's largest federation of unions, came out in support of Keystone in February.

"Pipelines are a low carbon emissions method of transporting oil and gas... [They] lower the cost of fuel they carry compared with other forms of transportation," said the AFL-CIO in a statement, with federation president Richard Trumka adding that "there's nothing environmentally unsound about the pipeline."

"The AFL-CIO supports the expansion of our pipeline infrastructure and a much more aggressive approach to the repair of our more than 2.5 million miles of existing pipelines. Repair and buildout of the natural gas pipeline system alone has been estimated by the INGAA Foundation as likely to create, on average, 125,000 jobs a year between now and 2035," affirmed the AFL-CIO to Mint Press News in March.

The decision of many labor unions to back the Keystone project is understandable, given the nation's sluggish job growth numbers, but it is the wrong one, says Shel Horowitz, a green marketing expert "who is also a proud member of the UAW [United Auto Workers] and National Writers Union."

"Common ground with labor can be found on supporting jobs that are both safe for the workers and safe for the environment. Keystone is neither," Horowitz tells Minyanville.

Like many environmentalists, Horowitz believes that the labor and environmental movements can work together to lobby for the government to create an infrastructure-rebuilding jobs program.

Some of the ideas Horowitz proposes include "constructing deeply green new buildings, conducting deep-energy retrofits and putting green roofs on millions of existing buildings wherever it is feasible, manufacturing solar panels, wind turbines, [and] in-line hydro machines, [and] digging geothermal wells."

"If you're a laborer or pipe fitter in the Midwest, you want to build [the Keystone] pipeline because it's good work. But you would be just as happy rebuilding the water infrastructure [of the US]," Joe Uehlein, executive director of the Labor Network for Sustainability, told The American Prospect .

But some critics argue that environmentalists are fighting a losing battle with Keystone. Combine the lobbying efforts of the oil and gas industry and the support of the unions, which is a key Democratic donor base, it's more than likely that President Obama will put his stamp of approval on the project.

Environmentalists should accept that and focus on establishing stringent safety standards for the pipeline instead.

"If environmentalists had made safety, not emissions, the centerpiece of their political charge against KXL they might have prodded the White House into promoting meaningful new regulations for all oil and gas pipeline operators [in the US]," wrote Elana Schor at The Atlantic .

Pablo Solomon, a designer and green activist, concurred, telling Minyanville, "Environmentalists should be spending money on research in cooperation with the oil, gas, and coal industries to make extraction safer and to make transportation of fuels safer."

Twitter: @sterlingwong




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

Referenced Stocks: BP , CVX , TRP , VLO , XOM

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