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Do or Die Time for the Keystone XL? 



cc shannonpatrick17 After years of debate, a final decision on the Keystone XL pipeline may be close at hand.

The proposed expansion of the current Keystone pipeline is designed to increase the capacity of crude oil flowing from Alberta's bituminous sands (“oil sands”) to the United States. The plan was originally tabled in 2008 and quickly devolved into a nexus of competing political agendas regarding job creation, ecological conservation, energy independence, and climate change.

The current Keystone pipeline provides a relatively inexpensive and convenient way for Canada to access the American oil market, and accordingly, it provides the United States with guaranteed access to a strategically significant resource. The XL proposal consists of separate phases, one of which is already underway; this southern portion of the pipeline will extend down to the Gulf of Mexico, a major hub of US refining capacity. The northern portion, however, has remained a political sticking point. Crossing the international border from Alberta, it requires special presidential approval and as such has become an extremely high-profile issue in the US political arena.

The greater shipping capacity represented by the proposed northern segment would mean a wider market for Canadian crude oil and the opportunity to capitalize on these endowments while demand is robust. For the United States, greater access to Canadian oil means greater energy independence, thus reducing the need for Washington to rely on imports from unstable regimes or those with questionable human rights records.

It is also suggested that building the Keystone XL would create a number of jobs along the construction route, and that once built, it would also serve as a valuable infrastructural fixture for transporting US-sourced oil across the country.  

TransCanada, the company that owns Keystone, and the Canadian government have been eager to give voice to these potential boons, and both have pushed consistently for the United States to commit. Many in the US government have taken up the call as well, voicing their satisfaction with the present Keystone and their wish to reap the economic advantages that an expansion potentially offers.  

But there has also been an equally enthusiastic groundswell of resistance against the project.

Those who oppose the Keystone XL do so primarily for environmental and ecological reasons. Early concerns were raised about the extension's proposed route, which traversed environmentally-sensitive areas and major natural water supplies. Opponents argued that a leak or spill around these critical resources, such as the Ogallala aquifer in Nebraska, could produce severe consequences.

Though TransCanada subsequently agreed to change the proposed route in order to bypass the most sensitive of these areas, the environmental concern surrounding the issue has been large enough to prompt several rounds of impact assessments and supplemental reviews.

Today, the debate hinges less on the possibility of ecological harm in the event of a disaster, and more on the broader issue of clean energy.

Crude oil from the tar sands is considered a ‘dirty’ resource due to the carbon emissions produced during its extraction. Mining tar sands requires much more energy than mining conventional oil deposits. Moreover, some of this additional energy comes from natural gases extracted via the controversial process of hydraulic fracturing (“fracking”). As a result, the total greenhouse gas emissions produced per barrel of crude from the oil sands is comparatively high.

Opponents of the Keystone XL thus argue that the project would exacerbate climate change, and that building a long-term energy plan on crude oil represents a step away from the path to clean energy. This is a concern that has kept the Keystone XL's northern portion from proceeding, despite the apparent support of high-ranking members of the Obama administration over the years. Former Secretary of State Hilary Clinton said in 2010 that she was “inclined” to approve the project, and the State Department's environmental reviews have not contained any recommendations to block the plan.

Still, approval has not been forthcoming. Citing a need to conduct further studies and due diligence that would exceed a decision deadline set by Congress early last year, the first Keystone XL proposal was rejected by President Obama, albeit with a suggestion that TransCanada try again later.

But now we may be nearing a final decision. Obama's previous caution and deference to public criticism of the State Department's environmental surveys are thought to be motivated in large part by his bid for re-election. By heeding the calls for ever more study and investigation, he was able to postpone taking a firm stance until a second term was assured. And even when he rejected the original plan, he managed to cast himself in a neutral light, as the rejection was not the result of any principled view or new findings, but simply a refusal to be forced into making a hasty decision.

Now in his second term, President Obama will be much less timid, and though a myriad of strong views continue to surround the Keystone XL project, a final decision is likely approaching.

This attitude shift was apparent in June 2013, when President Obama distilled the issue down to a single point, declaring that he would not approve the project if it were proven to contribute negatively to climate change. Presumably, then, if the pipeline extension were shown not to have an impact on global warming, it would receive a presidential green light.

Some consider this to be a strong indication that Obama will ultimately reject the project. Mining the oil sands is a carbon-intensive process, and the Keystone XL effectively broadens the market and increases demand for it. By this logic the project would incentivize increased greenhouse gas emissions, and thus fail to meet the president's criteria.

However, some studies have shown that the Keystone XL would not increase carbon emissions. These reports claim that even without the extended pipeline, Canadian oil sands would continue to be mined at the same rate. Rail and traditional means of shipping would simply take the place of the proposed pipeline, and no fewer barrels of crude would be extracted, rendering carbon emissions unchanged.

Perhaps unsurprisingly, this is the view shared by Canadian oil producers. Despite recent delays in the Keystone XL approval process, and even with recent increases in domestic oil production in the United States, Alberta's oil fields continue to see productivity increases. Top Canadian producers and sector analysts remain confident that the potential of the oil sands will be harnessed and consumed one way or another. Given the emphasis placed on oil sands development by the Harper government, it is easy to believe that mining will continue with or without Keystone XL.

Still, the recent production boom in US oil has left onlookers wondering if the future of Keystone XL is threatened. With a plentiful, more refined domestic product, US demand for Canada's crude is far less urgent. If it were still 2011 and the incumbent Obama still had an election to worry about, this would have been precisely the type of development that would engender more caution and heel-dragging.

Yet this is a different President Obama, and he can finally afford to forge ahead even amidst lingering doubts. Though a boom of domestic oil might weaken the pro-Keystone XL camp, it does not eliminate the benefits of inexpensive crude oil, and the State Department seems to have accepted that increased access serves the US economy and national security in the short and long terms.

Now he seems poised to finally make a decision. And by pinning the Keystone XL’s fate on climate change while simultaneously holding up the State Department's conclusion that Alberta's oil sands will be mined regardless, President Obama seems to be hinting at what form the decision will ultimately take.  

The southern portion of Keystone XL is already being built and business as usual continues at Canada’s oil sands - for ecological better or worse. Once the president is able to demonstrate that there is no connection between increased carbon emissions and the northern extension, he will have no reason to block the final piece of the Keystone puzzle.


Zak Rose is a contributor to 

Tags:  Energy Security - Environment - Commodities - America - North - United States - Canada - Oil & Gas Exploration - Keystone XL


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Posted by John Tucker on December 24th, 2013 at 1:46 pm EST
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There is so much misinformation here, some of it dishonest and deceitful, in both the main article and most of the comments, that one hardly knows where to begin.

There are quite a few folks in the USA with a little bit of NIMBY syndrome ... I hear its treatable, especially out in Nebraska, where anybody who does not like gas or oil is cordially invited to cut off their house heat anytime ....

At least Freeman has the jist of it ... there was never any chance of reducing the amount of oil being extracted and upgraded out of Athabasca ... the environmentalists were acting as tools of Wall Street, knowingly or otherwise ... much of the oil has been shipped by rail, which has benefited Warren Buffett enormously (he made about $360 per second last year ....)but there have been a couple of unfortunate accidents which might not have happened if the pipeline had been built ...but many Canadians are tired of selling oil "on the cheap" to the USA when other countries pay more for it, so they are making other arrangements ...

So Ms Hoffman, you don't need the pipeline? I hope you have a horse, or a bicycle, and a fireplace, and your legs and arms are as strong as your mouth ...

Posted by Tuco on December 23rd, 2013 at 11:58 am EST
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Today's environmental extremists have a lot in common with the Luddites of 200 years ago. They protest an imaginary threat, and ironically, use and enjoy the technology they protest.

Posted by Steve on December 23rd, 2013 at 9:20 am EST
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It would appear as though this program moving forward could offer some much needed stability in the Oil and therefore retail gas market. A .20c per gallon rise in retail gas is a sign of instability. If the US wants this economy to get back on track, if it wants to be able to afford paying for all the new government programs and plans, we need to get energy prices down; way down. 15% sways in price in a 24 hour period does not a stable market make.

Posted by George Spaid on December 20th, 2013 at 3:10 pm EST
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Consider including a bicycle/hiking path to create a permanent
source of employment along the route ... hostels, restaurants,
picnic areas to create a park-like setting.

Posted by Fabian Xenofontous on December 18th, 2013 at 6:48 pm EST
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Put North American strategic oil reserves out of danger and give the Shiites and Sunnis a push to all out war in the Middle East. Islam is an anachronistic and redundant belief system and the world will never be stable while Arabs and Iranians vie for Islamic power. As an added benefit a smaller population will resolve many of the environmental issues.

Posted by Robert Arvanitis on December 17th, 2013 at 5:52 pm EST
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Obama's excesses will end soon enough, and XL will get built.
We can only hope Canada (and our other true allies) will forgive us our left-statist binge.

Posted by Michael Hick on December 17th, 2013 at 5:40 pm EST
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Gulf refineries are the only ones in the country which can process heavy oil. We have not built any new refineries in decades and until we find a different way to power the computers which have written these comments or driven the engines of the cars which take us to work for hopefully profitable businesses, then, until we all work for the government, I suggest we do the intelligent best we can with the resources the world provides.

Posted by Lorne on December 17th, 2013 at 12:19 pm EST
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Two points are worth noting:

1) With an election on the horizon, it is highly unlikely that the Keystone will be approved. Canada is already well advanced in building pipeline capacity to the west coast, since China is the best alternate market to Keystone oil. And please note, if the oil is polluting, the prevailing winds from China kiss the USA.

2) Roughly 50% of all US crude oil is moved by truck or train, and I believe that both spew hydrocarbons into the air, even more polluting if ethanol is present. For a few lousy votes, the politicians court the corn lobby, and oil and diesel are required to produce corn. For the effects of a oil railcar accident, google: Quebec oil train explosion. The bodies of those in the vicinity of the train wreck were never found due to the fact that they were vaporized.

3) I am looking forward to the sequel to the tragicomedy Dumb and Dumber.

Posted by Ry C on December 17th, 2013 at 9:45 am EST
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Don Deno -

This is an example of media sensationalism to you? BEcause there's no numbers? This story describes the different standpoints of those who support/oppose keystone and talks about how and why Obama has avoided a decision. it has nothing to do with picking a side or "shouting ideology."

Posted by MediaBaron on December 17th, 2013 at 5:04 am EST
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@Don Deno

How does one quantify environmental protection exactly? Also, it's not like charts and numbers are impartial harbingers of truth. Look at the job numbers that CETA (canada-EU free trade) is supposed to bring in. Then look into how they came up with those numbers.

Fact is that numbers are just as much BS as words are these days. Only difference is they're more dangerous because people have the tendency to robotically believe them.

Posted by Logic 1 on December 16th, 2013 at 7:11 pm EST
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This issue is beyond requiring flip chart, graphs or other supporting information. When giving an opinion on a subject such as this, one would assume that the public can read english and is versed enough on the issue to understand the background. The article gave a well worded outdate and overview. So now with out any more Sub-Committees, Task Force Teams or whatever. Lets get it done!

Posted by deanbob on December 16th, 2013 at 6:24 pm EST
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If Canada is going to mine the tar sands NO MATTER whether the pipeline go through the US or to the west coast of Canada, why not put Americans to work and give the US a reserve source of energy?

Posted by Don Deno on December 13th, 2013 at 8:24 pm EST
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The XL pipeline discussion has degenerated to an ideological shouting match. Note that relevant quantitative data supporting an argument is not present in the "Situation Report". The only numbers are a few dates. As a result intelligent discussion about significance and validity of data and statements is difficult to take place. Our news media leads this trend. Reporters have English major backgrounds and write stories biased to sell. Numbers are omitted, because the reporters do not understand them and numbers do not sell. That leads to stirring up controversy, sell more of wordy reports and make more money for the news media.

Posted by Peter A. Carminati on December 12th, 2013 at 6:04 pm EST
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I lived in Texas back when oil was expanding at a rapid rate and there were jobs and more jobs in what was a huge experiment that did, in the end, work out well overall in spite of a few bad refinery fires. There is always a risk element in anything developing from man's Big Seed of life: the Grand Idea.

Now is the time to take action. Go for it.

Posted by Freeman on December 12th, 2013 at 4:13 am EST
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Canada doesn't need to sell it's oil to the USA at discounted prices. Obama dithered so long that Keystone XL is now irrelevant. China has investing heavily in the Alberta oil sands play. Canada will be shipping oil to China and India via the west coast. To eastern Canada to end importing foreign oil for that region. Line 9 will also enable Western Canadian oil to be shipped from Canada's Atlantic ports. The McKenzie Valley pipeline is being revived with talk of ship oil south from the NWT. It could also be reversed and used to ship via the Arctic Ocean to China via the Bearing Straights. The US of course has a lot of "clean" coal fired electrical generation. Enjoy.

Posted by Ivan Nezitic on December 11th, 2013 at 1:02 pm EST
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As the U.S. is freezing under an Arctic blast a bit of global warming is welcomed. U.S. unemployment remains historically high and the Keystone Pipeline means good paying jobs for blue collar workers. Additionally, much of the oil making its way to the Gulf Coast will be refined and exported as petroleum products which helps the U.S. trade balance. Impacts that Obama and the Democrats need to seriously consider.

Posted by James on December 10th, 2013 at 6:11 am EST
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Barrel for barrel, tar sands oil is even worse for the climate than conventional oil.

Posted by Jeff Green on December 9th, 2013 at 6:27 pm EST
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This is just the beginning of paying the price for being on oil.

Lori Theresa Waller: You write, "When it comes to oil, there are only masters, traders and slaves." Which category would you put Canada in?

Andrew Nikiforuk: We're all three, right now. Canada has almost become a plantation economy where all conversations are about the production and export of oil. If you're opposed to that agenda, you're a radical and unpatriotic. That's the kind of low-level conversation you have in petrostates. But we're also a slave to oil in the sense that half the country is dependent on foreign oil from the Middle East and the North Sea. We are not an energy independent country at all.

Posted by James Potter on December 9th, 2013 at 4:11 pm EST
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There are those in the US political ditch's (stupidly referred to as "arena") that have nothing in mind that is good for either country, what is in their minds? "Well I haven't received my bribe as yet!"

Posted by Kathy Hoffman on December 9th, 2013 at 2:38 pm EST
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Do not allow the Keystone pipeline to run through the US. This is not just about saving our environment, but it puts Billions of dollars in the pockets of the Koch brothers who are pushing this agenda for pure profit.

Corporate greed has to STOP! They could care less about creating jobs in this country. They are already killing people with all the chemical run offs from Georgia Pacific. WE DON'T NEED THE PIPELINE.

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