KEYSTONE PIPELINE: WHAT IS THE REAL ISSUE?

The U.S. State Department today decided today not to approve, for now, the Keystone XL pipeline project from Canada to Texas. Keystone XL would carry crude oil from the Canadian oil sands in Alberta to coastal Texas. Keystone XL is an extension of an existing network of pipelines (see map).

Source: indiancountrytodaymedianetwork.com

The proposed Keystone XL pipeline has generated a tremendous amount of controversy, with a host of groups choosing sides: environmentalists, tribes, states, private companies, politicians, and national governments. President Obama has been under a lot of pressure to deny or approve the project, and he tried to put a decision off until after the 2012 elections; however, Congress placed a 60-day ticker on the decision as a rider on a recent must-pass bill.

Speaker of the House John Boehner had this to say about the State Department decision: “President Obama is destroying tens of thousands of American jobs and shipping American energy security to the Chinese. There’s really no other way to put it. The President is selling out American jobs for politics." Ah yes....politics.

Source

Source: Energy Information Administration

So what is really going on here? What's the big deal, anyway?  It's not as if Keystone XL is the only oil pipeline in the USA. The map on the left shows the major existing oil/fuel pipelines in the U.S. The next map shows the regional pipelines. According to the Association of Oil Pipelines there are 168,000 miles of liquid pipelines in the USA, and these are the "safest, economical and environmentally favorable way" to transport oil and petroleum products, other liquid fuels and chemicals. Pipelines, most of them underground, are a fact of life, and we rely on them for the fuels we consume every day. 


Do pipelines have spills? Yes, all the time. So do trucks, trains, ships, barges and etc. Fact of life in the modern world.


Am I supporting the Keystone XL pipeline in this post? Not necessarily; I don't know enough about it to make that kind of decision. It's one of those knowing what I don't know moments! 


My main question is this: how should our government make this kind of decision? (The astute reader now knows that I'm not in the "keep government out of the way of free enterprise" camp; government absolutely needs to regulate this stuff.) The environmental and cultural issues are a matter of risk assessment; how much risk are we willing to take on in order to get the benefits of the proposed project? We assume risks every day in everything we do. 


Other environmental aspects include the negative impacts of recovering oil from oil sands, and the relatively large greenhouse gas emission factor of this type of oil recovery and refining.  


What about economics, including jobs? A project of this size will create thousands of construction jobs, and a smaller number of long-term jobs. And US companies could make money supplying materials and equipment for the project. (An interesting sideline: Evraz Steel, a major employer in Portland, Oregon is counting on a major order of steel pipe for the Keystone XL pipeline. An interesting twist - Evraz is a Russian company that bought Oregon Steel a few years ago.) 


There is also a geopolitical issue: should the US allow a Canadian company to build a major pipeline through the United States? What if the main use of this pipeline is to get Canadian oil to a seaport so it can be shipped overseas (this is one claim by project opponents who cite recent data showing that the US is now a net exporter of petroleum products)? 


And energy security. Does this project make the United States more secure in terms of energy resources and supplies, and reduce our dependence on oil from less-friendly or stable countries than Canada (we get a lot of our oil from Nigeria and Venezuela, although Canada is our largest supplier)?


Complicated, eh what? I think part of the answer lies in the energy policy of the United States. Unfortunately, I don't know that we have a comprehensive energy policy, although I am confident that President Obama will try to push one through in his second term. (Remember the Bush Energy Policy crafted by Cheney and his oil industry cronies behind closed doors?) 


In conclusion, the decision to allow or not allow the Keystone XL pipeline will most likely be a political decision, and this is unfortunate. We have now, and will always have many of these kinds of decisions to make. Local examples where I live: several proposals to build export facilities on the Columbia River to ship Montana coal to China, and other proposals to ship liquefied Canadian and US natural gas to Asia. It seems that the Canadians and Americans have large reserves of coal, oil and gas and prices are high in other parts of the world. And by the way, the companies wanting to build these export facilities are not all American companies. 


We need to think and act more globally, and our government needs to have a solid set of policies that will guide these kinds of decisions. Can we ever wrest these decisions out of the political arena? Sometimes. Maybe. 





  are the safest, most reliable, economical and environmentally favorable way to transport oil and petroleum products and other energy liquids and chemicals throughout the U.S.