Currently Browsing: Royalty and Gas Disputes

The Keystone Pipeline and the Threat to Oil

Recently, there was an oil spill in South Dakota from the controversial Keystone Pipeline. Days later, Nebraska approved a new route to continue the pipeline over protests. These two facts show the longterm difficulties oil will have no with getting the legislation passed to explore and export oil, but with the perception of those practices in modern America.

To be clear, America still needs a lot of oil. Though renewables have made inroads, those are minuscule on the macro-scale. Oil remains one of the major sources of energy in the country.

That is likely to continue for the next few decades to come, even in the rosiest of environmental futures. What may continually change and make business increasingly difficult is the perception of what oil stands for.

For decades, oil stood for American economic development, it stood for innovation and upward momentum. It helped fuel America’s rise in the 20th century and people were grateful.

Now, though, oil is starting to get a bad name. This started with oil spills like the Exxon Valdez in 1989, but it has skyrocketed in recent years. For one thing, Americans, and others around the world are more aware of the environment than they once were. Though there remains controversy around global warming in America, it is no longer a topic simply dismissed. It is seriously argued over, and every policy that involves energy involves a debate over how it affects the climate.

Those along the Gulf Coast have also seen some of the effects of offshore after the explosions on Deepwater Horizon (which was so seared into the national consciousness that it was made into a movie).

These issues have combined to make the country far more aware of the negative as well as the positive effects of fossil fuels. It has led to things like the Keystone Pipeline being passionately contested by parts of the country.

With the virulent strain of storms that hit the country this year being partly blamed on global warming as well, oil will inevitably be drawn into this conversation as well.

The long-term trajectory for oil on this issue could pose some serious difficulties. Protests are likely to continue over pipelines. There may be more lawsuits over gas and oil land rights as activists buy up land or convince landowners to take a stand. Ultimately, what would be most concerning, would be if more people in America felt worse and worse about going to the pump every week to fill up their car.

That sense of guilt and the following sense of obligation to find other options could be a very serious problem for oil’s future.

To avoid this, the oil industry should do more to offset some of its negative environmental impacts. Buying up rainforest, for instance, or sponsoring investment in more efficient vehicles would do some good for the product’s image. Avoiding more spills would also, obviously, be very helpful.

Overall, more needs to be done to convince people oil can be a positive in their lives, and that they can feel guilt-free filling their tanks.