In 1969, the Cuyahoga River in Ohio was so polluted that it spontaneously burst into flame. However, how much should economists factor in these issues when deciding policy? In the case of the pipeline, how do we know how much damage it would cause when we do not know how to put a value on the environment? Would the pipeline's benefits outweigh the opportunity cost? The issue of how to balance economic progress with unintended effects on our planet is the subject of this chapter. In 2021, President Biden, on his first day in office, canceled the cross-border permit, effectively ending (for now) the Keystone XL pipeline.Įnvironmental concerns matter when discussing issues related to economic growth. In 2017, the Trump administration sought to grant the necessary cross-border permit, and legal challenges emerged. Environmentalist groups fought government approval of the proposed pipeline construction, and in November 2015, the Obama administration refused to grant the cross-border permit necessary to build the Keystone XL pipeline. They argued that leaks could taint valuable water sources and pipeline construction could disrupt and even harm indigenous species. The Keystone XL would be constructed over an enormous aquifer (one of the largest in the world) in the Midwest, and through an environmentally fragile area in Nebraska, causing great concern among environmentalists about possible destruction to the natural surroundings. Supporters argued that the pipeline would be one of the safest pipelines built yet, and would reduce America’s dependence on politically vulnerable Middle Eastern oil imports. Sounds like a great idea, right? A pipeline that would move much needed crude oil to the Gulf refineries would increase oil production for manufacturing needs, reduce price pressure at the gas pump, and increase overall economic growth. There were four phases in plans to build the pipeline, and the first two of these had been in operation. government approval was required because of its size and location. While a private company, TransCanada, planned to build and own the pipeline, U.S. It was a pipeline system designed to bring oil from Canada to the refineries near the Gulf of Mexico, as well as to boost crude oil production in the United States. You might have heard about Keystone XL in the news.
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