Last week the US State Department reported in an environmental impact statement that there would be no significant impact on water and other natural resources along the proposed route of the Keystone XL Pipeline, which will carry crude oil from Canada’s Alberta oil sands to refineries on the Texas Gulf Coast.
In 2010 TransCanada completed the first phase of its $13 billion Keystone pipeline system aimed at linking the growing supply of Canadian crude oil with the largest refining markets in the US. In June 2010 it began commercial operation of a converted natural gas pipeline and a newly built oil pipeline, bringing crude oil directly from Canada to market hubs in the US Midwest.
Keystone Cushing (Phase II) extended the Keystone Pipeline from Steele City, Nebraska to Cushing, Oklahoma, a major crude oil marketing/refining and pipeline hub. This section went into operation in February 2011.
The proposed Keystone Gulf Coast Expansion Project (Keystone XL) is a 1,661-mile, 36-inch crude oil pipeline that would go from Hardisty, Alberta southeast through Saskatchewan, Montana, South Dakota, and Nebraska. It would incorporate a portion of the Keystone Pipeline (Phase II) through Nebraska and Kansas to serve markets at Cushing, Oklahoma before continuing through Oklahoma and Texas to the Port Arthur and Houston markets.
The case for the pipeline is strong: Obtaining an extra 500,000 barrels of oil a day from close ally and neighbor, Canada, and weaning the US from dependency on imported oil from unstable and adversarial foreign producers. (In addition the recoverable oil reserves of the current major suppliers of crude to Gulf Coast refineries — Mexico and Venezuela — are in decline.) But the other selling point is jobs. According to pipeline supporters, building the pipeline will create 100,000 jobs and generate $600 million in new local and state tax revenue. The Oil Lobby is strongly supporting the proposed pipeline.
The case against, also strong: Heavy oil from tar sands is dirty oil. Tar sands production’s carbon dioxide emissions are three times higher than those of conventional oil. The extraction process also requires vast amounts of energy and water, and surface-mining tar sands scars the landscape. Environmentalists and green energy advocates see the move as a step backward, increasing US dependency on one of the dirtiest kinds of fossil fuels rather than investing in the clean energy future (solar, wind, conservation) advocated by the Obama Administration’s US energy policy. In addition, some landowners and politicians in states that the pipeline will run through fear that a pipeline spill will contaminate local aquifers.
Tough call or a done deal?
Tough call, no doubt. But given that the 2012 US presidential campaign will be shaped by the jobs issue, I’m also going with done deal.