A protest against the Keystone XL pipeline / credit: John Englart, Creative Commons
After more than a decade of grassroots organizing, agitation and tireless opposition by the international climate movement, the final nail was slammed into the Keystone XL’s coffin Wednesday afternoon when the company behind the transnational tar sands pipeline officially pulled the plug on its plans.
Following consultation with Canadian officials and regulators—including “its partner, the Government of Alberta”—TC Energy confirmed its “termination” of the project in a statement citing the revocation of a federal U.S. permit by President Joe Biden on his first day in office on January 20 as the leading reason.
Climate campaigners, however, were immediate in claiming a final victory after years of struggle against the company and its backers both in Washington, D.C., and Ottawa.
“TC Energy just confirmed what we already knew but it’s a thrilling reality all the same—the Keystone XL pipeline is no more and never will be,” said David Turnbull, strategic communications director with Oil Change International (OCI).
OMG! It’s official. We took on a multi-billion dollar corporation and we won!!
— Dallas Goldtooth (@dallasgoldtooth) June 9, 2021
“After more than 10 years of organizing we have finally defeated an oil giant, Keystone XL is dead!” declared the Indigenous Environmental Network (IEN) in reaction. “We are dancing in our hearts because of this victory! From Dene territories in Northern Alberta to Indigenous lands along the Gulf of Mexico, we stood hand-in-hand to protect the next seven generations of life, the water and our communities from this dirty tar sands pipeline. And that struggle is vindicated.”
IEN said that the win over TC Energy and its supporters was “not the end—but merely the beginning of further victories,” and also reminded the world that there are “still frontline Indigenous water protectors like Oscar High Elk who face charges for standing against the Keystone XL pipeline.”
Calling the news “yet another huge moment in an historic effort,” Turnbull at OCI said that while the Canadian company’s press statement failed to admit it, “this project is finally being abandoned thanks to more than a decade of resistance from Indigenous communities, landowners, farmers, ranchers, and climate activists along its route and around the world.”
Jared Margolis, a senior attorney at the Center for Biological Diversity, declared the victory in the drawn-out battle—which largely took place under the Democratic administration of former President Barack Obama—”a landmark moment in the fight against the climate crisis.”
“We need to keep moving away from dirty, dangerous pipelines that lock us into an unsustainable future,” added Margolis, who said he now hopes President Joe Biden will take this lesson and apply to other polluting fossil projects. “We’re hopeful that the Biden administration will continue to shift this country in the right direction by opposing fossil fuel projects that threaten our climate, our waters and imperiled wildlife,” he said. “Good riddance to Keystone XL!”
Jamie Henn and Bill McKibben, both co-founders of 350.org and key architects of the decision to make the Keystone XL pipeline a target and symbol of the global climate movement, also heralded the news.
“When this fight began, people thought Big Oil couldn’t be beat,” said McKibben, who was among those arrested outside the White House in 2011 protesting the pipeline.
“Keystone XL is now the most famous fossil fuel project killed by the climate movement, but it won’t be the last,” said Henn. “The same coalition that stopped this pipeline is now battling Line 3 and dozens of other fossil fuel projects across the country. Biden did the right thing on KXL, now it’s time to go a step further and say no to all new fossil fuel projects everywhere.”
Clayton Thomas Muller, another longtime KXL opponent and currently a senior campaigns specialist at 350.org in Canada, said: “This victory is thanks to Indigenous land defenders who fought the Keystone XL pipeline for over a decade. Indigenous-led resistance is critical in the fight against the climate crisis and we need to follow the lead of Indigenous peoples, particularly Indigenous women, who are leading this fight across the continent and around the world. With Keystone XL cancelled, it’s time to turn our attention to the Indigenous-led resistance to the Line 3 and the Trans Mountain tar sands pipelines.”
McKibben also made the direct connection to KXL and the decision now looming before Biden when it comes to Line 3 in northern Minnesota. “When enough people rise up we’re stronger even than the richest fossil fuel companies,” he said. “And by the way, the same climate test that ruled out Keystone should do the same for Line 3.”
On September 10, sections of the second Nord Stream 2 pipeline laid from the German shore and Danish waters were connected in a so-called “above water tie-in.” The opposing pipe strings were lifted from the seabed by the lay barge, Fortuna. Then the pipe ends were cut and fitted together. The welding to connect the two lines took place on a platform located above the water on the side of the vessel. Then the connected pipeline was lowered to the seabed as one continuous string / credit: Nord Stream 2 / Axel Schmidt
Editor’s Note: The following represents the writer’s analysis and was produced in partnership by Newsclick and Globetrotter.
The current crisis of spiraling gas prices in Europe, coupled with a cold snap in the region, highlights the fact that the transition to green energy in any part of the world is not going to be easy. The high gas prices in Europe also bring to the forefront the complexity involved in transitioning to clean energy sources: that energy is not simply about choosing the right technology, and that transitioning to green energy has economic and geopolitical dimensions that need to be taken into consideration as well.
Gas wars in Europe are very much a part of the larger geostrategic battle being waged by the United States using the North Atlantic Treaty Organization (NATO) and Ukraine. The problem the United States and the EU have is that shifting the EU’s energy dependence on Russia will have huge costs for the EU, which is being missed in the current standoff between Russia and NATO. A break with Russia at this point over Ukraine will have huge consequences for the EU’s attempt to transition to cleaner energy sources.
The European Union has made its problem of a green transition worse by choosing a completely market-based approach toward gas pricing. The blackouts witnessed by people in Texas in February 2021 as a result of freezing temperatures made it apparent that such market-driven policies fail during vagaries of weather, pushing gas prices to levels where the poor may have to simply turn off their heating. In winter, gas prices tend to skyrocket in the European Union, as they did in 2020 and again in 2021.
For India and its electricity grid, one lesson from this European experience is clear. Markets do not solve the problem of energy pricing, as they require planning, long-term investments and stability in pricing. The electricity sector will face disastrous consequences if it is handed over to private electricity companies, as is being proposed in India. This is what the move to separate wires from the electricity they carry aims to achieve through Indian Prime Minister Narendra Modi’s government’s proposed amendment to the existing Electricity Act of 2003.
In order to understand the issues related to transitioning toward green energy, it is important to take a closer look at the current gas supply-related issues being faced by the European Union. The EU has chosen gas as its choice of fuel for electricity production, as it goes off coal and nuclear while also investing heavily in wind and solar. The argument advanced in favor of this choice is that gas would provide the EU with a transitional fuel for its low carbon emission path, as gas tends to produce less emissions than coal. It is another matter that gas is at best a short-term solution, as it still emits half as much greenhouse gas as coal.
As I have written earlier, the problem with green energy is that it requires a much larger capacity addition to handle seasonal and daily fluctuations that planners have not accounted for while advocating for switching over to clean energy sources. During winter, days are shorter in higher latitudes, and the world therefore gets fewer hours of sunlight. This seasonal problem with solar energy has been compounded in Europe with low winds in 2021 reducing the electricity output of windmills.
The European Union has banked heavily on gas to meet its short- and medium-term goals of cutting down greenhouse emissions. Gas can be stored to meet short-term and seasonal needs, and gas production can even be increased easily from gas fields with requisite pumping capacity. All this, however, requires advance planning and investment in surplus capacity building to meet the requirements of daily or seasonal fluctuations.
Unfortunately, the EU is a strong believer that markets magically solve all problems. It has moved away from long-term price contracts for gas and toward spot and short-term contracts—unlike China, India and Japan, which all have long-term contracts indexed to their oil prices.
Why does the gas price affect the price of electricity in the EU? After all, natural gas accounts only for about 20 percent of the EU’s electricity generation. Unfortunately for the people in the EU region, not only the gas market but also the electricity market has been “liberalized” under the market reforms in the EU. The energy mix in the grid is determined by energy market auctions, in which private electricity producers bid their prices and the quantity they will supply to the electricity grid. These bids are accepted, in order from lowest to highest, until the next day’s predicted demand is fully met. The last bidder’s price then becomes the price for all producers. In the language of Milton Friedman’s followers—who were known as the Chicago Boys—this price offered by the last bidder is its “marginal price” discovered through the market auction of electricity and, therefore, is the “natural” price of electricity. For readers who might have followed the recently concluded elections in Chile, Augusto Pinochet—who was a military dictator in Chile from 1973 to 1990—introduced the Constitution of 1980 in Chile and had incorporated the above principle in a constitutional guarantee to the neoliberal reforms in the electricity sector in the country. Hopefully, the victory of the left in the presidential elections in Chile and the earlier referendum on rewriting the Chilean constitution will also address this issue. Interestingly, it was not the former UK Prime Minister Margaret Thatcher—as is commonly thought—who started the electricity “reforms” but Pinochet’s bloody regime in Chile.
At present in the EU, natural gas is the marginal producer, and that is why the price of gas also determines the price of electricity in Europe. This explains the almost 200 percent rise in electricity price in Europe in 2020. In 2021, according to an October 2021 report by the European Commission, “Gas prices are increasing globally, but more significantly in net importer regional markets like Asia and the EU. So far in 2021, prices tripled in [the] EU and more than doubled in Asia while only doubling in the U.S.” [emphasis added].
The coupling of the gas and the electricity markets by using the marginal price as the price of all producers means that if gas spot prices triple as has been seen recently, so will the electricity prices. No prizes for guessing who gets hit the hardest with such increases. Though there has been criticism from various quarters regarding the use of marginal price as the price of electricity for all suppliers irrespective of their respective costs, the neoliberal belief in the gods of the market has ruled supreme in Europe.
Russia has long-term contracts as well as short-term contracts to supply gas to EU countries. Putin has mocked the EU’s fascination with spot prices and gas prices and said that Russia is willing to supply more gas via long-term contracts to the region. Meanwhile, in October 2021, European Commission President Ursula von der Leyen said that Russia was not doing its part in helping Europe tide over the gas crisis, according to an article in the Economist. The article stated, however, that according to analysts, Russia’s “big continental customers have recently confirmed that it is meeting its contractual obligations,” adding that “[t]here is little hard evidence that Russia is a big factor in Europe’s current gas crisis.”
The question here is that the EU either believes in the efficiency of the markets or it doesn’t. The EU cannot argue markets are best when spot prices are low in summer, and lose that belief in winter, asking Russia to supply more in order to “control” the market price. And if markets indeed are best, why not help the market by expediting the regulatory clearances for the Nord Stream 2 pipeline, which will ship Russian gas to Germany?
This brings us to the knotty question of the EU and Russia. The current Ukraine crisis that is roiling the relationship between the EU and Russia is closely linked to gas as well. Pipelines from Russia through Ukraine and Poland, along with the undersea Nord Stream 1, currently supply the bulk of Russian gas to the EU. Russia also has additional capacity via the newly commissioned Nord Stream 2 to supply more gas to Europe if it receives the financial regulatory clearance.
There is little doubt that Nord Stream 2 is caught not simply in regulatory issues but also in the geopolitics of gas in Europe. The United States pressured Germany not to allow Nord Stream 2 to be commissioned, and also threatened to impose sanctions on companies involved with the pipeline project. Before stepping down as the chancellor of Germany in September 2021, Angela Merkel, however, resisted pressure from Washington to halt the work on the pipeline and forced the United States to concede to a “compromise deal.” The Ukraine crisis has created further pressure on Germany to postpone Nord Stream 2 even if it means worsening its twin crises of gas and electricity prices.
The net gainer in all of this is the United States, which will get the EU as a buyer for its more expensive fracking gas. Russia currently supplies about 40 percent of the EU’s gas. If this stalls, the United States, which supplies about 5 percent of the EU’s gas demand (according to 2020 figures), could be a big gainer. The United States’ interest in sanctioning Russian gas supply and not allowing the commissioning of Nord Stream 2 has as much to do with its support to Ukraine as seeing that Russia does not become too important to the EU.
Nord Stream 2 could help form a common pan-European market and a larger Eurasian consolidation. Just as it did in East and Southeast Asia, the United States has a vested interest in stopping trade following geography instead of politics. Interestingly, gas pipelines from the Soviet Union to Western Europe were built during the Cold War as geography and trade got priority over Cold War politics.
The United States wants to focus on NATO and the Indo-Pacific region, as its focus is on the oceans. In geographical terms, the oceans are not separate but a continuous body covering more than 70 percent of the world’s surface with three major islands: Eurasia, Africa and the Americas. (Although in the formulation of British geographer Halford Mackinder, the originator of the world island idea, Africa was seen as a part of Eurasia.) Eurasia alone is by far the bigger island, with 70 percent of the world’s population. That is why the United States does not want such a consolidation.
The world is passing through perhaps the greatest transition that human civilization has known in meeting the current challenges posed by climate change. To address these challenges, an energy transition is required that cannot be achieved through markets that prioritize immediate profits over long-term societal gains. If gas is indeed the transitional fuel, at least for Europe, it needs long-term policies of integrating its gas grid with gas fields, which have adequate storage. And Europe needs to stop playing games with its energy and the world’s climate future for the benefit of the United States.
For India, the lessons are clear. Markets do not work for infrastructure. Long-term planning with state leadership is what India needs to ensure supply of electricity to all Indians and ensure the country’s green transition—instead of dependence on electricity markets created artificially by a few regulators framing rules to favor the private monopoly of electricity companies.
Prabir Purkayastha is the founding editor of Newsclick.in, a digital media platform. He is an activist for science and the free software movement.
Book cover of Striking from the Margins (Saqi Books, 2021)
Editor’s Note: Toward Freedom uses “West Asia” to describe what is referred to as the “Middle East,” a term with colonial roots.
Striking from the Margins edited by Aziz Al-Azmeh, Nadia Al-Bagdadi, Harout Akdedian and Harith Hasan (London, United Kingdom: Saqi Books, 2021)
The tumultuous state of West Asia has been a contentious topic within many academic and social circles for centuries. Over the past half-century many academics, politicians and strategists have put forth initiatives, programs and policies focused on reconstructing the region.
For far too long, Western countries have seen West Asia as an underdeveloped expanse of land and resources controlled and governed through antiquated religious and social policies. What separates Striking from the Margins from other discourses on the region is its commitment to addressing the misconceptions that often keep people from understanding the relationship between West Asian countries and the Western ones that occupy and use their territory mostly for economic benefits.
Book cover of Striking from the Margins (Saqi Books, 2021)
The Disconnect Between East and West
One of the reasons such a disconnect exists between those living in West Asia and the Western countries, whose tax dollars finance the implementation of interventionist policies, is due to a lack of understanding regarding West Asian governance. While the United States’ two-party system is imperfect, it offers an often-predictable outcome that effectively reinforces the country’s status quo as a leading economic power across the globe. On the other hand, many countries in West Asia face a more challenging set of circumstances to develop their economies. For example, in the early 2000s Iraqi President Saddam Hussein’s government was not only dealing with warring Shi’i and Sunni factions seeking power within Iraq, but also Islamists and U.S. troops fighting to control the region. Research done by Greek political scientist Stathis Kalyvas shows a combination of sectarian conflict along with “a short war between U.S. troops and Shi’i militias” led to Iraq experiencing “a collapse of state capacity.” (pg. 37) Such a collapse has continued to make it difficult for the country to rebuild and develop. This book effectively outlines the circumstances that have kept certain West Asian countries from modernizing.
Striking from the Margins is not a dissertation that seeks to “fix” the region. Instead, the authors push for a reconceptualization along with reasonable policy changes that would be more economically beneficial to those regions. Understanding the type of social, religious and economic pressures West Asian countries face is pivotal to building stronger and more equitable partnerships between those countries and Western ones. In the book, two of the authors, Aziz Al-Azmeh and Nadia Al-Bagdadi, effectively highlight the hypocrisy of interventionism, along with its role in destabilizing West Asia. They offer a diligent overview of state formation in the region.
In writing that “the modern state in the Mashreq arose from the needs of internal reform arising in response to global, arguably colonial pressures from outside and from internal processes of modernization, starting with the Ottoman reforms of the 19th century” (pg. 8), the authors offer a concise historical context regarding state formation in the region. But when they go on to state that “the most artificial state” and yet the strongest in West Asia is Israel (pg. 8), the blatant contradiction between regional support and global impact becomes evident. On one hand, powerful states in the region historically gained their legitimacy through a combination of regional support, resource management and tribal warfare. However, the most powerful country in the region, Israel, is not supported by neighboring countries like Egypt, Syria and Lebanon. It instead maintains legitimacy through a “client state” relationship with the United States. Thus, Israel possesses an imbalanced stronghold over the region when it comes to warfare. When discussing West Asia and the constant demands for reform in the region, it is important to explore the role Israel and the United States have played in maintaining the economic status quo.
Religious Fundamentalism and Global Capitalism
In lieu of adequate research most people tend to assume that religious fundamentalism is the leading factor stifling the development of West Asian countries. However, research suggests economic inequalities are the leading cause of instability in the region. Kalyvas writes “$1,000 less in per capita income is associated with 41 percent greater annual odds of civil war onset, on average.” (pg. 30) The Gulf Cooperation Council consists of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. Together, they represent a regional, intergovernmental, political and economic union designed to integrate multiple economies and bolster infrastructure across member countries. The issue is such integration comes at a significant cost for the “migrant workers [who] have been fundamental to patterns of urban growth and capital accumulation in the Gulf.” (pg. 57) Hanieh explains “a large number of temporary migrant workers… from South Asia and, to a lesser degree, the Arab world… make up more than half of the Gulf’s total population of 56 million.” (pg. 57) Even though these workers account for more than 59 percent of the labor force within the Gulf, they have been denied labor, political and civil rights. Much of the political and economic capital used to support growth across the region is not helping the people who need it the most.
In closing, several competing entities influence the economic, social and political infrastructure of West Asia. The most important are the countries in the region, specifically those that make up the Gulf Cooperation Council, as well as non-member countries like the United States, who have a vested interest in the maintenance and development of certain programs and countries in the region. The value of Striking from the Margins is its subtle refusal to put forth a heavy-handed, neoliberal proposal on how to “reform” West Asia. Instead, it offers proper context for readers to take a step back, thoughtfully assess the situation and envision new ways to embark on such a difficult development process.
Timothy Harun is a writer and actor based in Los Angeles. He holds a B.A. in journalism from Hampton University.
The Asian Peoples’ Movement on Debt and Development joined climate campaigners in June in The Philippines’ financial district to sound the alarm on several Asian companies for their continued financing of fossil fuels amid the climate emergency / Twitter/AsianPeoplesMovement
The Asian Clean Energy Forum (ACEF) 2021, a meeting of hundreds of civil society organizations and others interested in clean energy policy, was underway on June 15 in Manila, The Philippines, when one session came to a halt.
An Asian-led network of over 250 civil society organizations from around the world called NGO Forum on ADB decided to disengage from a session it was co-hosting alongside the Asian Development Bank (ADB). The session in question was about ADB’s draft energy policy. ADB is a multilateral bank that finances development projects, specifically involving fossil fuel energy across Asia.
“The focus of the ACEF discussions were topics like energy transition and of course these are important,” said Lidy Nacpil, coordinator of the Asian Peoples’ Movement on Debt and Development (APMDD), a member organization of the NGO Forum on ADB. “But we believe their approach to transition is not fast enough and not ambitious enough considering what we need to prevent climate catastrophe.”
In May 2020, the ADB released a draft of its energy policy. Titled “Energy Policy: Supporting Low Carbon Transition in Asia and the Pacific,” the document is a revision of the bank’s 2009 energy policy. The draft signals a shift away from coal financing, but it allows for financing of natural gas projects. And so, given a nod for continued financing of fossil fuel projects in an era of climate change, ADB’s energy policy has been criticized. Whether the bank will actually engage with such criticism though is another question.
“ADB has opened up consultations with civil society groups, but the meetings for these consultations are very brief,” Nacpil said. “There isn’t enough space for dialogue and debate about important passages in the energy draft, like the usage of false solutions like carbon capture and storage.”
Scientists have criticized technologies like carbon capture and storage for being “expensive, energy intensive, risky and unproven.”
The reasons for disengaging from the clean-energy forum included the lack of transparency, inclusivity and meaningful consultation with civil society in the ADB energy-policy review process. For many civil society organizations from across central, southern and southeast Asia, they did not experience anything but a one-sided push aimed at informing rather than engaging with participants.
NGO Forum on ADB added the ADB Sustainable Development and Climate Change Department (SDCC) has not provided any information about the timeline for consultations or the process by which inputs provided by groups like NGO forum on ADB will be taken into account before the draft is finalized.
This reporter sent questions to Bruno Carrasco, director general and chief compliance officer of the ADB SDCC regarding the lack of transparency and a need for Engagement, but received no comment.
Grassroots Voices Left Out
“The name ‘Asian Clean Energy Forum’ is a misnomer. ACEF is neither Asian nor clean,” said Vidya Dinker, national president of the Indian Social Action Forum (INSAF) and coordinator of Growthwatch, a research and advocacy group in India. INSAF is another member of NGO Forum on ADB. “It’s a networking event for ADB to reach out to people who they think will broaden their reach and business.”
In a press briefing held on June 18, Hasan Mehedi from the Coastal Livelihood and Environmental Action Network (CLEAN) Bangladesh, said, “ADB is continuing to finance fossil fuels including Liquified Fossil Gas and Waste to Energy while global scientific communities warn about any further investment for fossil fuels.” But Mehedi said ADB has yet to reach out to the project-affected communities on the ground. “Without consulting the affected communities and local civil society, how can ADB finalize such an important policy which has a direct impact on local communities and on the environment?”
Nacpil noted a need to “overhaul” ADB as an institution. The reasons, she explained, includes “neoliberal paradigm and strategies,” “undemocratic governance system” and the “use of loans as leverage to reshape Asian economies, according to its private sector and market driven growth framework.”
In a statement submitted as part of the Fossil Free ADB campaign, APMDD said “financing of fossil fuel projects has largely been in the form of loans. In addition to the grave impacts and implications of its fossil fuel financing on people, communities and on the climate, we are also deeply concerned that ADB’s fossil fuel financing has also exacerbated the debt burdens of its member countries. It is only fitting that the ADB Energy Policy Review also address the loans involved in its fossil fuel financing.”
The Fossil Free ADB campaign is aimed at ensuring a “no fossil fuels” ADB energy policy. It is organized by a group of civil society organizations, researchers and activists, including NGO Forum on ADB, Asian Peoples’ Movement on Debt and Development (APMDD), 350.org and the Consortium for Energy, Environment and Demilitarization.
The Therma Visayas Energy Project is a 340-megawatt (MW) coal-fired power plant operating since 2019 in Cebu Province, Philippines.
APMDD called on ADB to adopt a policy and take action that will address accountability for impacts of ADB-financed coal projects and ways to ease the debt burden created by ADB lending, especially lending to harmful projects.
“In their draft energy policy, they acknowledge coal projects have been problematic and that’s why we need to shift to clean energy now,” Nacpil explained. “But they are not taking into consideration the economic impacts of the projects they have funded, the kind of financial burden these projects have brought to countries.”
Rayyan Hassan, executive director of NGO Forum on ADB, said that with ADB’s coal ban having yet to be implemented, it is logical to consider calls for decommissioning old plants and the loans associated with them. Examples of such plants include the Masinloc and Visayas thermal power plants in The Philippines, the Tata Mundra coal plant in India, and Jamshoro coal plant in Pakistan.
In response to questions about debt relief, Dr. Yongping Zhai, chief of the energy sector group at ADB said that for ADB, “offering any form of debt relief to any of its borrowing member countries will compromise its preferred creditor status, which underpins ADB’s strong credit ratings. Our strong credit rating is critical for ADB to offer low-cost funding to all borrowing member countries, in support of their development efforts.”
“Yongping Zhai is speaking as a banker, not a development banker who is concerned about member countries’ debt burdens,” Dinker said.
As of now, the draft energy policy does not specify if any debt relief will be provided in relation to fossil fuel projects. It remains to be seen if this undergoes a change as deliberations with civil society groups and activists move ahead. The draft is up for submission to ADB’s board of directors later this year.
Rishika Pardikar is a freelance journalist in Bangalore, India.
