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Essay/photos by By Allen Best

Big Pivots

The age of oil is not over, nor will it be soon. The energy density of oil is fabulous, the resource remains relatively abundant, and it can be transported easily. For these reasons and more, it has been called liquid gold. But I see a chapter ending with last week’s announcement by TC Energy Corp. The Canadian company said it has ended the quest to build the Keystone XL pipeline from Alberta across the midsection of the United States. The golden era for oil has ended.

Because history isn’t as tidy as we would like, maybe the next chapter actually starts with something that had happened the prior week in June. Three new directors were elected to the board of Exxon Mobil. A hedge fund that owned a mere 0.02% of the shares of the oil giant had gained the support of three other funds that collectively own 20%. These new directors want to accelerate the oil giant’s effort to decarbonize.

The New York Times reported that analysts said the impact of Exxon’s defeat on other corporations around the country was hard to overstate. There was also this curious fact: Exxon’s stock price actually rose after the insurgency.

Bitumen on the move in 400-ton trucks near Fort McMurray, October 2011. Photo/Allen Best

In Big Pivots during coming weeks I hope to publish an essay by a contributor with far greater expertise than my own in the matter of using corporate investments to steer climate policy. However, I suspect we’ll also be talking for more years about the relative role of Exxon and other oil companies vs. the suppliers of China, India, and other countries.

About the Keystone XL, I have some knowledge. In 2010 I visited the Athabascan oil sands near Fort McMurray, the largest deposits in the world of the substance called bitumen. Development began in 1978 by a company called Suncor. You may recognize the name. It operates the refinery north of downtown Denver.

Near Fort McMurray, we saw the humongous trucks rumbling with their payloads of the hydrocarbon-soaked rock. We also visited a location of in situ extraction, in which the hydrocarbons are drawn from the subterranean as is the case in 80% of the Athabascan deposits, much like contemporary oil and natural gas extraction.

We were also taken to an idyllic rumple of land where buffalo grazed in the distance on reclaimed land.

This is from Big Pivots 40, published on June 18, 2021.

We saw little of Fort McMurray itself, but even then it was swelling to a population of 80,000. Presumably that figure did not include the men whom I saw at the airport. They were from Nova Scotia, along the Atlantic Coast of Canada, where work was scarce. They were returning to their families after a two-week stint at Fort McMurray.

Jobs, good-paying jobs, were plentiful. It was a sector that had made Alberta wealthy. Downtown Calgary, part of that same trip sponsored by the Canadian government, was full of gleaming new towers.

In Canada, the bitumen and heavy crude oil of the Athabascan and other deposits were always described as “oil sands.” Back home in Colorado, when I went to programs sponsored by environmental groups, it was always “tar sands.”

It was also “tar sands” in Nebraska the following spring of 2011, where I spent most of a week in what was perhaps the most plum reporting assignment I have ever received. I was commissioned by a magazine called Planning, which gave me enough money to dawdle, as necessary, which you need for good reporting. The editor—nearing retirement—wanted to reward me and understood how big this story was going to be. I was ahead of the folks from NPR and others.

Nebraska rancher Karl Connell in May 2012. Photo/Allen Best

I followed the route of the existing shoulder-high Keystone pipeline in east-central Kansas to Steele City, Neb., the destination of the proposed Keystone XL. Then I drove diagonally toward the Sand Hills. One evening I sat in a library of one of these small farming towns to hear a pitch from an organizer of opposition. The men stood in the back, most with their billed hats still firmly on their heads.

Two days later, I walked with one of those ranchers on his cow pasture overlooking the Niobrara River. He talked about his efforts to avoid over-grazing, about past failures—and about his worries about a potential pipeline spill wrecking his efforts to be a good steward of his land.

Under this anti-Keystone tent were seemingly incongruous allies: conservative Nebraska ranchers, climate activists, and Native Americans of the northern Great Plains. Their grievances varied, but what struck me as interesting then was that the first Keystone pipeline had not provoked such opposition.

The backstory was the enormous spill from a ruptured pipeline in Michigan. Then, it seemed that everywhere I looked were spills, mostly small. Along with this came the swelling evidence that the climate science was fundamentally sound—and we had to figure out how to reduce emissions.

You can’t talk about Keystone XL without mentioning Bill McKibben. He made opposition to the Keystone XL pipeline a central part of his climate activism. I went to Boulder when he spoke at the Glenn Miller Ballroom in 2012, and it was standing room only.

It was part of his “Do the Math” tour, which came after his essay in Rolling Stone magazine: “Global Warming’s Terrifying New Math.” His take-home was that there was no way that all of the fossil fuels “owned” and theoretically available for development could in fact be developed if we hope to avoid a temperature increase of more than 2 degrees C. That essay, almost a decade later, is required reading for understanding what’s happening now.

Included in that essay is this paragraph:

“The paths we have tried to tackle global warming have so far produced only gradual, halting shifts. A rapid, transformative change would require building a movement, and movements require enemies. As John F. Kennedy put it, ‘The civil rights movement should thank God for Bull Connor. He’s helped it as much as Abraham Lincoln.’ And enemies are what climate change has lacked.”

And with that, McKibben went on to define the “enemy:”

“Given this hard math, we need to view the fossil-fuel industry in a new light. It has become a rogue industry, reckless like no other force on Earth. It is Public Enemy Number One to the survival of our planetary civilization. … According to the Carbon Tracker report, if Exxon burns its current reserves, it would use up more than seven percent of the available atmospheric space between us and the risk of two degrees. BP is just behind, followed by the Russian firm Gazprom, then Chevron, ConocoPhillips and Shell, each of which would fill between three and four percent. Taken together, just these six firms, of the 200 listed in the Carbon Tracker report, would use up more than a quarter of the remaining two-degree budget.”

Bill McKibben in Denver, April 2019. Photo/Allen Best

McKibben didn’t mention Keystone XL in that essay. That essay, however, was the spark for creation of Less than a decade later, it’s an organization able to make some noise in Colorado, where it is now branded as 350 Colorado, and other states. (The 350 refers to the parts per million of carbon dioxide that scientists say we could safely have topped out at. At the time McKibben wrote that essay, the accumulations were at 396; this year they’re at 420. We’re barreling toward 500 ppm where all bets go off the table).

In 2015, President Barack Obama vetoed a permit for the pipeline, saying it would undercut American leadership on climate change. Donald Trump, reversed that veto, Joe Biden in January reaffirmed it.

This veto doesn’t mean the oil won’t make it to market. A State Department report even before Obama’s veto had pointed out that the oil would find its way to markets in other ways.

The Toronto Globe and Mail last week emphasized that point. Two major pipelines are under construction from the oil/tar sands deposits. The $12.7 billion Trans Mountain expansion underway seeks to deliver hydrocarbons to a Pacific Ocean port in northern British Columbia. From there, it can be delivered to refineries in Southern California, to Asia and beyond. Oil – even relatively expensive oil, as is the case with this produce from bitumen —is easily shipped around the globe. To the east, the Enbridge Line 3 replacement would deliver the bitumen and heavy crude oil to refineries in the American Midwest.

Writing in the New York Times on Saturday, McKibben pictured the Keystone XL defeat as only a tentative victory. “The question now is whether it will be a one-off victory or a template for action going forward—as it must, if we’re serious about either climate change or human rights,” he wrote.

Perhaps McKibben is right to reserve judgment. My gut is that this is a chapter ending, the ending of the golden age of oil. Oil transformed life in America – and that across much the world. It gave us vast freedom, creating a literary art form of the road trip from the typewriters of Jack Kerouac or Hunter Thompson, and will soon be the largest source of emissions in Colorado and many other places.

Cheap oil plays to our self-indulgence. The late Randy Udall, in one of his standard lectures, used to paint this picture of luxury enabled by oil by talking about Cleopatra. I forget how many Egyptian slaves he said it took to power her boats as she glided up and down the Nile. His punch line that now every woman with an SUV could live like Cleopatra, because of cheap, easy oil.

Oil made many fortunes. Even today, you scratch very far below the surfaces of places like Aspen and Vail and there’s likely to be an oil fortune in somebody’s familial closet. It’s part of my more modest resources. My aunt worked at Conoco in downtown Denver and part of my inheritance came from her stocks in that oil company. Even today I own a sliver of mineral rights in Colorado’s Weld County and in the Marcellus shale of Pennsylvania.

Denver’s Suncor Refinery. Photo/Allen Best

In Colorado, oil is still a big player. Somewhere I read that the average wages from the oil sector in Colorado are $180,000. Driving in the Wattenberg field I see mini-castles with four-car garages. Dollars to donuts, there’s oil money there.

But new and better technology has started arriving. Electric cars are becoming affordable and the charging infrastructure is getting put in place. Colorado is at 35,000 EVs now but hopes to be near 1 million within a decade. We may end up some real problems in our need for lithium. But even the wealthy emirates of the Middle East recognize that the golden age of oil is ending.

Again, I’m reminded of Wyoming, of my visit to Gillette in 2011, when there was still much scoffing about renewables. Now where are we?

Oil will take longer. It’s an extraordinary resource. It’s not so extraordinary that the Keystone XL will get built to Steele City. The golden age of oil is over.

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