Keystone XL Pipeline

The Keystone XL pipeline is an energy policy issue that has proven to be highly polarizing.

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Proponents of the pipeline point to a U.S. Department of Energy report which indicates that Keystone XL will allow the US to substantially reduce its imports of Middle Eastern oil. Furthermore, it is claimed that the pipeline will “create 20,000 high-paying jobs for American families and inject $20 billion in to the U.S. economy.”[2] In addition to the influx of oil from the Athabasca oil sands in Canada, the pipeline provides an avenue for transporting up to 250,000 barrels of oil per day from U.S. sources in Montana, Texas, and North Dakota. The economic and energy implications of the pipeline have garnered a significant number of supporters who are urging the President to approve TransCanada’s application to continue with the project.

While the proponents of Keystone XL focus on economics, the opponents focus on the local and global environmental impacts. The “global impacts stem primarily from concern regarding the lifecycle of greenhouse gas (GHG) emissions associated with the development of Canadian oil sands.” [1] Critics point to the “fact that the extraction of petroleum from the tar sands creates far more greenhouse emissions than conventional production does.”[3] However, this concern should not impact our government’s decision to allow construction of the pipeline as Canada is committed to exploiting their tar sands and the GHG emissions will continue regardless of US involvement. Thus, preventing Keystone XL in no way diminishes the total emissions and only serves to prevent America from utilizing the oil derived from the project. Furthermore, abstention from the Canadian oil market provides an opening for other countries and the oil will “just get bought by China and other countries looking for cheap and plentiful energy. And TransCanada, the company behind the pipeline, is already working on contingency plans to do just that.”[4]

Even if one rejects the global environmental criticisms, the local environmental effects must still be considered. The primary local complaints center on potential side effects of the pipeline on Nebraska’s Sand Hills and the Olgallala aquifer. “Potential impacts to the Ogallala Aquifer and the Sand Hills identified in the final EIS for TransCanada’s original permit application included groundwater contamination after an accidental spill or leak of crude oil during the construction or operation of the proposed pipeline.”[1] In response to these concerns, TransCanada has proposed several alternative routes that will entirely skip the Sand Hills region, although the new routes still cross a portion of the Olgallala aquifer. While the possibility of aquifer contamination remains frightening, the probability is remote as the government’s own Environmental Impact Study claims that there will be “’no significant impacts to most resources along its proposed corridor if the company follows through on environmental protection measures.”[5]

While the most common objections to Keystone XL center on environmental concerns, there is a steadily growing opposition to the pipeline due to property rights considerations. In a chilling outgrowth of the broad eminent domain powers established in Kelo v. City of New London, TransCanada has leveraged the power of the courts to force landowners to grant easements. TransCanada has engaged in 56 eminent domain cases in Texas and South Dakota and has begun the process in Nebraska. [6] Furthermore, there is no way of determining how many property owners sold land or easements to TransCanada due to the simple threat of eminent domain seizure. As Keystone XL is not a public works project, but rather a profit driven venture of a foreign corporation, it seems to stretch even the logic of the Supreme Court’s controversial decision in Kelo v. City of New London. [7]

Clearly, many political, economic, environmental, and ethical issues must be weighed when considering the course of action for this project.

[1] http://www.fas.org/sgp/crs/misc/R41668.pdf

[2] http://www.marketwire.com/press-release/Media-Advisory-US-Department-Energy-Report-Supports-Keystone-XL-Study-Shows-Pipeline-TSX-TRP-1389251.htm

[3] http://www.nytimes.com/2011/08/22/opinion/tar-sands-and-the-carbon-numbers.html?_r=0

[4] http://reason.com/blog/2013/02/17/3-reasons-to-build-the-keystone-xl-pipel

[5] http://downstreamtoday.com/news/article.aspx?a_id=27703

[6] http://www.nytimes.com/2011/10/18/us/transcanada-in-eminent-domain-fight-over-pipeline.html?pagewanted=all

[7] http://www.law.cornell.edu/supct/html/04-108.ZO.html

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2 Comments

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2 responses to “Keystone XL Pipeline

  1. mwaterman1

    The Keystone XL pipeline is certainly a contentious and complex issue that will intertwine environmentalists and oilers, executives and legislators, all surrounding the buzzwords of energy independence, climate change, and jobs. Read through President Obama’s latest State of the Union speech and count how many times those issues were referenced.

    It is interesting that TransCanada has already finished almost half of the southern leg of the pipeline that stretches from Cushing, Ok, the self-proclaimed “Pipeline Crossroads of the World,” to the gulf coast and its refineries [1]. If the whole project is not approved, we will need to thank TransCanada for helping to reduce the crude glut at Cushing that exists as a result of all of the increased domestic production from the western states. The pipeline capabilities have not been able to keep up with the increased production.

    While it’s already been a winning situation for the big energy companies and refiners, you can bet that they will still be lobbying the Obama administration hard to approve the pipeline. Over the past several years, refiners have invested heavily in their assets in order to process more of the heavy crude that is being produced. While they already are using heavy crudes from South American countries like Brazil and Venezuela, refiners would definitely prefer a “domestic” source over the somewhat volatile sources in other parts of the world (i.e. OPEC).

    While there is much debate on both sides about climate change, there is no debate that Canada will seek to sell its resources. If the pipeline is built, there will definitely be some environmental implications for the US. The question is how will both sides (energy industry and environmentalists) be somewhat satisfied?

    There is some speculation that legislators may try to cut a deal. Basically, the EPA will get to impose restrictions on dirty coal power plants, and the Keystone XL will be approved. While these talks are in infant stages, this would appease many sides, and also help to begin a spirit of working together to solve national problems within our government. This is something that has not been done very well lately, and it might just be a good step in the right direction [2].

    [1] http://fuelfix.com/blog/2013/02/24/southern-segment-of-keystone-xl-is-halfway-finished/
    [2] http://fuelfix.com/blog/2013/02/15/keystone-for-climate-could-obama-craft-a-horse-trade/

  2. I think this post does a great job of covering the major bases of the issues of the Keystone XL. True, the proponents say tens of thousands of jobs will be established. However, the study those figures came from actually doesn’t include TransCanada as a reference anywhere, not even for statistics or data. Furthermore, since the pipeline is not a public utility in Texas or anywhere else, there is no guarantee domestic oil will be transported in it.

    Despite the small chance that the US will be greatly affected by it, in a way it’s not that different than any other pipeline. Like mentioned above, Canada will exploit the tar sands despite what Obama decides. Also, since the new proposed routes completely bypass the Ogallala aquifer and environmentally sensitive Sandhills region, environmentalists are losing a substantial piece of their domestic argument. The most pipeline-dense area of the country is between Cushing, Oklahoma, and Houston, Texas. Adding one more pipeline isn’t going to make much of a difference.

    In reference to eminent domain, TransCanada is indeed using it to the most extreme measures possible. Cases have even been documented of TransCanada employees using violence to remove “trespassers,” or people who own the land that TransCanada believes is theirs through eminent domain, or protestors they believe are obstructing construction (well, of course they are). They have also refused to provide tariff rates (mandatory to be considered a public pipeline) in response to eminent domain cases.

    Clearly TransCanada is not looking out for the interests of Texans. Then again, they are a major oil company working on a multimillion dollar project. Homeowners and environmentalists are small potatoes compared to the global oil market. Keystone XL has many contradicting aspects. Since its construction is almost certain, the best plan of action would be to mitigate the current and potential effects it has on everyone involved.

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