Keystone history data-rich, wrought with conflict

Sep 2, 2013

During an interview with the New York Times, published July 27, U.S. President Barack Obama questioned the number of jobs that would be created by the construction of TransCanada Corp’s proposed $7 billion Keystone XL pipeline, giving it a lowball estimate.

The massive project is designed to pump 830,000 barrels of crude oil daily from Canadian tar sands in northern Alberta and Bakken shale in North Dakota and Montana south to refineries on the U.S. Gulf Coast. It would be 1,700 miles in length.

The project was first proposed in 2008, but it has been stalled for more than 1,800 days by the U.S. State Department, which must approve the pipeline’s northern section from Hardisty, Alberta to Steele City, NE, because it crosses the U.S./Canadian border. The Obama administration denied its first application in January 2012.

The State Department has been reviewing whether the pipeline “would serve the national interest.” The initial application was submitted to the State Department on Sept. 19, 2008. The U.S. House has voted seven times to advance the pipeline’s construction. Last March, the U.S. Senate also endorsed the project in a bipartisan vote.

In May, the House voted to approve the Northern Route Approval Act, which addresses all needed federal permits to build the project, but the Senate has yet to take up the legislation.

The pipeline’s southern leg running from Cushing, OK, to the Texas coast does not require Washington to sign off because it does not cross an international border. TransCanada started work on it in June 2012.

Environmentalists oppose the pipeline because they say it would increase carbon emissions and worsen global warming. In his NYT interview, Obama took issue with Republicans, business organizations and labor unions who say it would create tens of thousands of direct and indirect jobs.

“There is no evidence that that’s true. The most realistic estimates are this might create maybe 2,000 jobs during the construction of the pipeline, which might take a year or two, and then after that we’re talking about somewhere between 50 and 100 jobs in an economy of 150 million working people,” he said, also disputing arguments the pipeline would reduce domestic gasoline prices.

According to the latest Supplemental Environmental Impact Statement, the State Department found “the proposed project would potentially support approximately 42,100 average annual jobs across the United States over a one-to-two-year construction period,” which could translate to about $2.05 billion in earnings.

A Department of Energy analysis projects this increased North American energy supply and gains in energy efficiency could “essentially eliminate” U.S. dependence on Middle Eastern oil.

Canada is America’s largest source of imported oil, providing nearly 2.4 million barrels per day. With the help of the Keystone XL pipeline, estimates suggest Canadian imports could reach up to four million barrels a day by 2020.

TransCanada needs rights of way on about 2,150 properties in five Midwest states.

Some ranchers from the Dakotas to Texas oppose it because of the damage a 110-foot-wide trench would do to their property.

Eminent domain—taking private property for public use—would allow TransCanada to lay the pipeline on its route through the Great Plains. Livestock operators worry the land may never recover if they grant easements and fear crude oil leakage could ruin their water supplies.

Last February, Nebraska ranchers joined the Sierra Club and tribal members in a demonstration outside the White House to protest the Keystone XL pipeline, asserting they were being forced to subsidize the private enterprise of a foreign corporation with land that their families worked for generations to secure.

Pipeline proponents counter that the Keystone XL will be one of the nation’s safest pipelines built to date, incorporating state-of-the-art technologies and 57 additional safety standards proposed by the Pipeline and Hazardous Materials Safety Administration.

According to the State Department’s August 2011 Final Environmental Impact Statement, these conditions would give the Keystone XL pipeline “a degree of safety greater than any typically constructed domestic oil pipeline system under current regulations.” The pipeline also will adhere to new pipeline safety standards required as part of the Pipeline Safety, Regulatory Certainty and Jobs Creation Act of 2011.

An Aug. 8 report by IHS Cambridge Energy Research Associates, a Massachusettsbased consulting company, concluded construction of the Keystone XL pipeline would “not have any impact” on greenhouse gas emissions. If the project does not advance, Canadian oil sands will continue to be produced and marketed regardless, it said. Those tar sands are more carbon-rich than conventional oil.

“Industry would turn to alternative pipeline projects and rail for oil sands transportation,” the report said.

Obama said in June that he would oppose the controversial Canada-to-Texas pipeline if it “significantly exacerbates” carbon pollution.

Meanwhile, an endless row of stacked pipe worth $200 million sits idle since 2011 in the small town of Gascoyne, ND, as project officials await Obama’s green light to proceed with the Keystone XL project. — Mark Mendiola, WLJ Correspondent