 day, that oil will still flow. Canada is already working on other options, mainly pipelines from the west out to the east to the maritime provinces, possibly pipelines to the west coast and then to Asia and other rail and pipeline options if the Keystone XL Pipeline is rejected.
CURWOOD: Now, some scientists like former NOAA scientist James Hansen say if the carbon in the Alberta tar sands gets into the atmosphere, it’s game over for the climate. What would it take for the Alberta tar sands to become the first major fossil fuel reserve in history to be left in the ground?
MCNALLY: I think in order to imagine a scenario in which the oil sands in Alberta was not produced in the coming years, I think the most likely scenario would be a global recession and a huge drop in the price of oil below the cost of what it would take to invest and produce in Canadian oil. So were we to have a worldwide recession, which would, of course, create other problems, then I could imagine a delay in investment in both the production and transport options for that oil. Second, it’s, I guess, possible that global concern about global warming will rise strongly enough in Canada and other countries to block the production of that resource. But I think that’s very unlikely. When I look around the world and look at Europe and look at Australia and look at Japan, I see areas that have been at the forefront of carbon policies and climate change policies pulling back and stepping back as they’ve encountered economic difficulties, not the least of which are high energy prices, particularly in Europe and Japan. So I don’t see any sign of the kind of resurgence and concern about global warming that would translate into public policies that would block the oil sands from being developed in the next few years.
CURWOOD: Now, by your estimates, you say that the world is going to consume a third more oil in the years ahead. What about concerns by those who talk about what’s happening with the climate that we really can’t afford to do that, and that’s the basis of their opposition to Keystone - that we really can’t amp up our burning of oil.
MCNALLY: Right. I think you’ve stated the opposition correctly. The problem is we have a tension here between concerns about the climate implications of burning that much oil, and then, of course, coal and gas would be burned on top of that, on the one hand, and on the other hand we have to realize that oil is the lifeblood of modern civilization. So far, a billion people on the Earth in the rich countries have dominated oil consumption, and we have forgotten how miraculous and wonderful motorization and getting into cars is. If you think about the ’50s and ’60s, every movie, cultural hero, and every other rock n’ roll song was about getting in a car or doing something in a car, and we’ve kind of forgotten that.
But right now, what we have to realize is there are two to three billion people who are just starting to appreciate the joys of mobility - of driving and flying and the other energy services and goods that come from oil. So it’s the strong desire to have what we have, mainly outside the United States, outside of Canada in the developing world, which can only be quenched by oil because, whereas in electricity production, there are alternative sources of generating electricity - natural gas, coal, renewables, nuclear. In transportation, we only really have oil. There is no large-scale substitute for oil in transportation.
CURWOOD: Now, you lay out a business and technical rationale for approving Keystone...what about the politics of this? There’s been tremendous public opposition - people handcuffing themselves to White House gates and that sort thing, going to jail to protest this - politically, what are the risks that President Obama takes if he goes ahead and approves this?
MCNALLY: Well, we have to remember that this is a Congressional election year and the Democrats stand to lose the Senate. Were he to approve the Keystone Pipeline, the environmental groups will be very angry. But the environmental groups want 