June 2013, Vol. 240, No. 6


Keystone XL Pipeline: Dreaming Of A Do-Over

Jeff Hahn

You call your own fouls in pickup basketball. And if a big disagreement flares up over a call, the issue gets settled by declaring a ‘do-over’ — you pretend the play never happened and reset the ball and score. I couldn’t help but think that in the wake of TransCanada’s recently announced delay of its Keystone XL pipeline project, the company might be wishing it could call a ‘do-over.’

The Motley Fool reported the delay could raise the price of the pipeline from its current “staggering $5.3 billion price tag” and that TransCanada had already spent about $1.8 billion on the project as of the end of March.

The size of those numbers started my gears turning. First, fair disclosure: we have oil refineries as clients and they are first-rate companies which operate with great integrity. Second, fair warning: as much as anyone outside the project can, based on the information available, I agree with TransCanada’s positions regarding the benefits of the pipeline:

1) It will support the significant growth of crude oil production in the United States from producers in the Bakken region of Montana and North Dakota. Agreed. I visited the region in August 2012 and saw first-hand the economic upside these plays are bringing to the states.

2) It will allow Canadian and American oil producers more access to the large refining markets found in the American Midwest and along the U.S. Gulf Coast.

3) It will have the capacity to reduce American dependence on oil from Venezuela and the Middle East by up to 40%. Absolutely. I believe the vast majority of Americans would rather see the dollars they spend on oil and natural gas stay close to home.

The question at the moment, then, is simple. With all these benefits, along with the 10,000-15,000 jobs that get created through the project, why wouldn’t the concept be an easier sell to the public?

The environmental complexities of the project create a challenge both in South Dakota and among Canadian native tribes. The industry’s overall record for operating pipelines without spills doesn’t help. Several weeks ago, ExxonMobil’s Pegasus pipeline spilled heavy crude into an Arkansas neighborhood despite the fact that ExxonMobil installed new leak detection technology in the Pegasus line in 2009. Upsets certainly don’t help the cause.

The energy value has also been challenged. In a March 31, 2013 New York Times editorial Thomas Homer-Dixon argued the viscous low-grade petroleum called bitumen coming out of the tar sands is junk energy. He calculates that, “a joule, or unit of energy, invested in extracting and processing bitumen returns only four to six joules in the form of crude oil. In contrast, conventional oil production in North America returns about 15 joules.” He’s got a good point that I have yet to see effectively rebutted.

Finally, the EPA piled on more grief with its recent summary following the closure of the public comment process, saying it didn’t like the State Department’s environmental assumptions and found State’s energy-economic modeling shaky, rejecting the idea that “oil sands crude will find a way to market with or without the Project.”

These are legitimate challenges but unfortunately, TransCanada, it’s impossible to declare a do-over for Keystone XL. At the same time, we shouldn’t look past the lessons Keystone XL is teaching us because I believe TransCanada could have earned greater support and diffused public resistance had it invested much more heavily in a two-pronged narrative strategy:

1. Overcoming the Monster. This is one of seven story archetypes that go back past Beowulf to David & Goliath and further. It’s the classic underdog story – and you can see it replayed in recent advertising. For example, last fall, American Express took on Black Friday with Small Business Saturday. Pretty smart. Keystone XL lacks an emotional attachment to this narrative concept. It’s there – “American dependence on oil from Venezuela and the Middle East” – but not enough. In do-over mode, we would spend a year or two showcasing that monster to public. This would have defined an answer to the key question: “What problem are we solving?” Companies do well when they allow the public to share a dilemma before offering a solution – and unfortunately for TransCanada, the pipeline has been turned into a problem-causing Goliath.

2) The American Dream. Ever since Horatio Alger’s “Street Life in New York with the Boot Blacks” came out in 1868, Americans have embraced tenants that have come to be associated with the American Dream. Latch onto one of these, and an issue can ride a long way. Many academics, including Luke Winslow, Kristen Hoerl and Tracy Marafiote, have studied the American Dream myth and attached descriptions like: “good, moral people,” “rural origins,” and “selflessness” to the idea. But statements like, “with the right amount of merit, anyone can rise from his/her meager beginnings” and “individual triumph over humble beginnings” are what Americans most love to believe. In his work, “Love as Redemption, The American Dream Myth and the Celebrity Biopic,” Dr. Glenn Smith asserts the American dream is a “mythology that promotes the ideals of individuality and brotherhood (equality and compassion for all)” as keys to successful upward social mobility and goes on to say “the American Dream is the gold standard by which we measure individual success and failure.”

Again, threads of this narrative concept are inside the Keystone XL story, but they have gotten lost in the fight. If we could do-over, we would work to bind the success of the project to the success of the country. Imagine if TransCanada would have tethered the pipeline to a triumphant platform by saying something like: “Keystone XL will set a new standard for environmental stewardship and become a national platform for reducing the country’s overall carbon footprint…” then put that idea into action by sponsoring an X Prize designed to reduce overall dependence on oil. That’s a very different kind of pipeline for a very different kind of (higher) purpose. Granted, it’s a counter-intuitive idea, but it’s the kind of storytelling that can turn a controversy into a cause.

A native of Iowa where he grew up on a farm, Jeff Hahn is owner and principal of Hahn, Texas – a 40-year old public relations firm with offices in Austin and San Antonio. Prior to joining the firm, he was communications director at Freescale Semiconductor and public affairs director at Motorola Semiconductor. For those companies, as well as with Motorola’s corporate office in Schaumburg, IL and Lockheed Space Operations in Titusville, FL, he served in roles including, government relations, media relations, crisis communication, analyst relations, business operations, employee communications, financial communications and executive communications.


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