Keystone XL: Who Benefits? Answer: China
Forty-one years ago, when I used to get up at 5 a.m. to get on gas station lines with my parents, I started hearing about "energy independence" - a secure source of supply for our energy needs. Today, energy independence soon will be a reality.
For China. Thanks to the Keystone XL pipeline.
Q. Cui bono? ("Who benefits?") A. China.
The Chinese economy consists of taking raw materials and energy, making that into stuff, and then selling that stuff - a/k/a "manufacturing." Chinese leaders understand that in order for that model to work, China needs steady supplies of raw materials and energy. By how do you get a steady supply of energy, in a world where those supplies are dominated by a cartel, and are concentrated in a part of the world prone to war? In America, we've been trying to puzzle that out for four decades, without success.
Well, the Chinese have figured it out. They're going to get their energy from Canada, a stable country, and pass it through the United States, another stable country. They will pay the Canadians the world price for oil. They will pay us nothing, or next to nothing. So Uncle Sam is Uncle Sucker.
And not for the first time. For the past decade, China has pursued an utterly unscrupulous and incredibly successful strategy in "trade" with the United States. China has been importing from the United States roughly $50 billion in goods each year, much of it food, raw materials and energy. China has been exporting to the United States roughly $350 billion in goods each year, mostly manufactured goods. And China has been buying roughly $300 billion in U.S. assets each year, mostly U.S. Treasuries. So we buy their stuff, putting their people to work. And they buy our assets, driving us deeper and deeper into debt. America loses - twice.
Now China has peeled off a tiny portion of that trade surplus, just $30 billion, and audaciously is trying to parlay that into permanent energy independence. China has put that money into Canadian tar sands.
Canadian tar sands are easily one of the dirtiest energy sources on Planet Earth. Does China care? No. As Deng Xiaoping used to say, "it doesn't matter whether a cat is black or white, as long as it catches mice." China's leaders are so indifferent to environmental concerns that they have no problem with 8-year-olds in Beijing contracting lung cancer from pollution - but they get upset when the U.S. Embassy in Beijing puts an air quality monitor on the roof, and posts the readings on the internet. Canadian tar sands are a very, very black cat, but China's leaders care only about catching mice.
Chinese leaders have seized key elements of the world industrial supply chain, like rare earths. According to our government, they engage in pervasive industrial espionage. They have threatened American companies like Apple, Google and Walmart. In short, they know how to play the game.
All of the oil that passes through the Trans-Alaska Pipeline has to be sold in the United States. Why not the same rule for the Keystone XL Pipeline? But instead, we allow a tax-free zone, to facilitate Chinese energy independence at the expense of our own. Why does Uncle Sam have to be Uncle Sucker?
There are plenty of reasons to be against the Keystone XL pipeline. Environmentalists recognize it as the ultimate "bonfire of the vanities" - planet-wide carbon bonfires. The pipeline passes through an active earthquake zone. One bad spill could permanently poison the Ogallala Aquifer, which provides drinking water to millions of people, and 30% of our irrigation.
Here is another reason, perhaps the best reason of all: It doesn't do us any good. China, yes. The Koch Brothers (who own the refining capacity that would be used), yes. Us, no.
When are we finally going to have a government with the courage to ask that simple question: Does it do us any good? Cui bono?