The Truth About The Keystone XL Pipeline
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The Truth About The Keystone XL Pipeline

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It seems as though the polarization of the United States is increasing. As issues continue to emerge, the spin is spun and citizens of this once united nation find themselves at odds with neighbors, friends, coworkers and even family. One recent issue involves the passage of the Keystone XL pipeline. In this article, I will dispel the myths and rumors and discuss only the facts. Although I do have an opinion on the matter, which I will share later, facts are facts which cannot be changed. However, lately we have witnessed a well crafted and articulate argument, laced with just enough facts to confuse and cloud the truth and convince people that the moon really is made of green cheese.

On November 19, 2014, the U.S. Senate voted against the passage of the bill which would allow the Keystone XL Pipeline to proceed. The vote was one shy of passage at 59-41. Is this good for America? What are the arguments for and against the project? I will give you the facts and you can decide. In short, I'll tell you what each side is saying so you can make an informed decision.

What is the Keystone Pipeline?

Before we explain Keystone, let me first state that beneath the ground of these United States are thousands upon thousands of miles of existing pipeline transporting natural gas and oil. Here's point number one: The Keystone XL Pipeline is nothing new. This type of project has been completed numerous times before. Now for the issue that has polarized America.

This story begins in Hardisty, Alberta, Canada with a company called TransCanada . TransCanada is a Canadian company that builds and operates energy infrastructure across the North American continent. In 2005, the company announced its intentions to build a pipeline to transport crude oil from the oil sands region of Alberta, Canada to the existing Keystone Pipeline in Steele City, Nebraska. The pipeline would also accept U.S. crude from the Bakken oil fields in Montana and North Dakota. The petition was made to the U.S. Department of State because it would cross the U.S. border. The State Department is one of 15 departments under the executive branch of the federal government.

The original petition for permit was denied on January 18, 2012 due to environmental concerns. Specifically, the original pipeline route would have passed through an environmentally sensitive area of Nebraska known as the Sand Hills region. This area has highly porous soil and shallow groundwater. The Ogallala aquifer is also in this region and the pipeline would have posed a potential threat to the drinking water. A revised permit was resubmitted in May 2012 which contained an alternate route. It was denied.

Oil Sands

Oil sands, also called tar sands, are a mixture of clay, sand, water, and heavy black viscous oil known as bitumen. Oil sands require more processing than conventional crude. It can be processed to remove the bitumen which can be sent to refineries in two different forms. First, it can be upgraded into "syncrude" which is a light crude. Second, the bitumen can be blended with lighter hydrocarbons to create a heavy crude. Both of these forms can be transported by pipeline. Oil sands production is increasing in the U.S. with the majority of it in the form of heavy crude.

Why the pipeline? Why now? Although the extraction of oil sands is increasing in the U.S., transportation options from the Midwest to the Gulf Coast are limited. In short, the U.S. needs to approve this pipeline to accommodate the increase in production.

Fast Facts on the Pipeline

The Keystone Pipeline already exists. In fact, the Keystone Mainline is 1,353 miles of 30" pipe which extends from Hardisty, Alberta to refineries in Wood River and Peoria, Illinois. This segment has been in service since June 2010. The Cushing Extension is 298 miles of 36" pipe which runs from Steele City, Nebraska to crude oil terminals and tank farms in Cushing, Oklahoma. This portion has been flowing since February 2011. Since these are already in service, what's the problem with this project? We'll get to that in a moment.

The Keystone XL Pipeline consists of two parts. The first is the Gulf Coast Project. This portion would transport oil over 435 miles through 36" pipe running from Cushing, Oklahoma to Port Arthur, Texas. The second segment, called the Keystone XL, would run 1,179 miles from Hardisty, Alberta to Steele City, Nebraska.

The capacity of existing pipelines is about 591,000 barrels per day (bpd) and the two pending pipelines are expected to transport about 700,000 bpd initially with a potential of 830,000 bpd. The total capacity of both is expected to be about 1.3 million bpd. Let's look at the argument for and against the project.

Pipeline Criteria

The Department of State, in consideration of the permit, must examine the potential impact of the pipeline on the environment, the economy, U.S. energy security, and foreign policy plus a few additional items. The project must also be in the national interest of the United States. The greatest, and perhaps the only argument against the pipeline, is occurring on the environmental front. Opponents suggest it will harm the environment.

Environment

The environmental argument is studied by five groups. The first is the U.S. Army Corp of Engineers. This group is responsible to issue permits for sections of the project that require placement of dredge and fill materials in waters of the U.S. including wetlands or for pipeline that crosses navigable waters. The Environmental Protection Agency is the second group. This group must review and issue National Pollutant Discharge Eliminations Systems permits for discharge of pollutants in state waters. The third group is the Bureau of Land Management which grants temporary permits for portions of the project that would encroach on federal lands. Fourth is the U.S. Fish & Wildlife Service. This group will consider the impact to endangered species in accordance with the Endangered Species Act. Finally, there are multiple state and county agencies which will consider permits for projects that cross navigable waters (including state streams), state highways or work affecting cultural or natural resources.

Let's skip to the main arguments for and against and you can decide for yourself if this project is warranted or if it should be denied. First, the arguments against the project.

Arguments Opposed

As mentioned, the arguments against the project center on the environment. These typically exist in community groups and environmental organizations. These groups argue that the lifecycle greenhouse gas emissions associated with the development of Canadian oil sands is harmful to the environment compared to conventional oil or renewable fuels. Most objections center on the extraction of the oil, but some suggest the project will only make the U.S. more dependent on fossil fuels. There is also an argument on the impact it may have on the long-term use of land and the harm it may cause to agriculture and cattle grazing. A leak in the pipeline is a primary concern along with the ability to respond quickly to a disaster of this nature. I've also heard opponents say that the project will not create very many high-quality or long-lasting jobs.

Arguments In Favor

Those in favor of the pipeline have several diverse points which bolster their opinion. For example, the pipeline will increase the diversity of the U.S. petroleum supply. It will also create up to 43,000 jobs, the majority of which will be permanent. Proponents also argue that the pipeline will enhance U.S. energy security and help maintain adequate crude oil supplies for U.S. refineries. The pipeline will allow the U.S. to substitute Canadian oil for other foreign oil. Keystone XL will provide the U.S. with direct pipeline access to the secure and growing Canadian crude output and decrease our dependence on foreign oil from Mexico and Venezuela (the two largest oil exporters into the Gulf Coast). Finally, the pipeline would expand the transportation of oil sands from the Midwest to the Gulf Coast.

Economic Benefits

As mentioned, the pipeline will connect to existing Keystone Mainline and increase the transport of oil sands from Canada and the Midwest to the Gulf Coast. In addition, it will boost U.S. energy production, thereby providing a boost to our economy. How? Canada is our largest trading partner and is important to U.S. job creation. An estimate from the Canadian Energy Research Institute in 2011 estimated that new oil sands development in Canada would create about 444,000 new U.S. jobs and generate about $521 billion in U.S. government revenue over the next two decades. Recent estimates are that the project itself will create about 43,000 permanent jobs. When the U.S. expands its energy transportation system, additional workers are required to maintain and oversee it.

Conclusion

Although the argument against the pipeline centers on environmental concerns, the real reason may have to do with the disdain for fossil fuels felt by environmental groups and others. Keystone XL is a relatively small issue compared to the entirety of the existing U.S. pipeline system. Hence, opponents of this project have taken a well anticipated route, claiming that it will harm the environment. The question is, If the thousands of miles of existing pipeline has been in use and the environment seems to be unaffected, why should Keystone XL suddenly be the project that ruins the planet? I believe we should let the project continue, which is exactly what I expect will happen in early 2015. Although the new Congress will likely pass a bill to allow the pipeline to proceed, I expect the President will veto it. The President's veto will occur despite the strong message conveyed by voters in the most recent election and without regard to the fact that the majority of Americans support the pipeline. In summary, Keystone is good for the economy, good for U.S. energy independence, and good for the American consumer. And, we also have the technology to assure that the environment will be protected. Some ask why should it proceed? I ask, why not?