Keystone XL Pipeline Delayed

In an epic case of stakeholder engagement fail, the Canadian company TransCanada has just seen its signature Keystone XL Pipeline project go down in flames. Yesterday, the State Department announced that it would delay approval of the project pending further review. While this development did not kill  the Keystone pipeline outright, you might as well stick a fork in it: it's done.

What does this have to do with stakeholder engagement? The Keystone XL pipeline would have cut across the midsection of the U.S. to ferry crude oil from Canada's notoriously dirty Alberta tar sands down to Gulf Coast refineries in the U.S. It involved enormous disruption to local communities with no payback in terms of beneficial side effects such as lower fuel prices or permanent local job creation. That is precisely the kind of project that has trouble attracting stakeholders on a micro level, so TransCanada had an enormous handicap to begin with.  More importantly, the Keystone XL Pipeline represents an old-school approach to energy policy that severely hampered TransCanada's ability to recruit stakeholders on a macro level, even among its natural constituencies such as union leadership and government policymakers.

The Keystone XL Pipeline and Micro-Engagement

TransCanada's best shot at enlisting the support of local communities would have been to demonstrate that at least some local sectors would stand to benefit from the project. However, it failed on all counts. Local landowners were outraged that the company could exercise eminent domain rights to obtain easements for the pipeline on private property, and farmers were concerned about risks to local water aquifers. TransCanada also failed to show any meaningful, permanent job creation in local communities that would help to offset any potential negative impacts. The company could not even promise that the project would help lower fuel prices for local farmers (it appears that the Keystone pipeline would have actually resulted in higher local prices, by drawing down an ongoing regional oversupply).

The planned route also would have cut through Nebraska's sensitive Sand Hills region, which is not only an area of protective interest to many Nebraska residents, but is also a productive cattle range and therefore of great interest to the local cattle industry, owners and workers alike.

Engaging Labor Stakeholders on a Macro Level

Without any clear micro-benefits, TransCanada was left to pitch its case on a macro level while fending off stiff opposition from national environmental groups as well as local conservation organizations. While support from organized labor for big infrastructure projects would seem like a no-brainer, the Keystone project's potential for harm enabled unions to make the connection between climate change, environmental impacts and community sustainability. The National Domestic Workers Alliance, for example, opposed the pipeline partly on the grounds that many of its members were native to countries already experiencing climate change impacts.

Clean Energy, Infrastructure and Job Creation

Even if the job creation argument in support of the Keystone project had any merit to it, TransCanada would still be vulnerable to a powerful counterargument.  There are many (many, many) other needed infrastructure projects that could create thousands of jobs in the U.S., both in conventional bridge-and-tunnel construction and in the clean energy field, without the risk of harm. For example, the Amalgamated Transit Union and the Transport Workers Union issued a joint statement in August in support of new transportation and clean energy projects over the pipeline, and Nevada Senator Harry Reid's opposition to the pipeline was also based on the clean jobs argument.

The Keystone XL Buck Stops Here

Since the Keystone XL pipeline would cross from Canada into the U.S., it requires final approval by the State Department and by President Obama. However, as noted previously by Triple Pundit, the project is squarely at odds with President Obama's national energy policy, which has a strong focus on creating economically sustainable communities in rural areas by creating new green jobs in local biofuel production. The Keystone project would pose a serious potential risk to agricultural communities without offering any sustainable job creation in return. So, although the State Department was careful to phrase its announcement in terms of reviewing alternate routes for the pipeline, exactly what they mean by "alternate routes" most likely refers to the ones that exist only in the dreams of TransCanada executives.

Image credit: Farmer protesting Keystone XL Pipeline courtesy of tarsandsaction on flickr.com.

Twitter: @TinaMCasey.