Keystone pipeline mysteries: Column
- The Keystone system has already been transporting oil sands for three years.
- The new pipeline will disturb less land than the pipeline that has already been built.
- Keystone XL could actually lower the U.S. trade deficit.
The biggest mystery about the Keystone XL pipeline is why its final stage hasn't already been approved by the Obama administration.
There are six things most people don't know that make the mystery deeper:
- From following the contentious Keystone pipeline debate, you can be forgiven if you think that the fight is over whether to build it. That's not quite right. The Keystone system has already been transporting oil sands from Canada to U.S. refineries in the Midwest for three years — with no major leaks. The Keystone XL project that has received so much attention is the last phase of a larger project. Phase 1 has been operating since 2010, carrying oil from Alberta across three Canadian provinces and six states to refineries in Illinois. Phase 2 expanded the system from Steele City, Neb., to Cushing, Okla., a major U.S. oil refining and storing hub. It went operational two years ago, again with no major problems. Phase 3, under construction, extends the pipeline from Oklahoma to the Gulf Coast refineries in Texas. President Obama even gave a speech in Cushing in March 2012 — during his re-election bid — praising the pipeline extension as good for the economy. Phase 4, the Keystone XL, would build another extension to the pipeline system from Alberta, crossing only three states (Montana, South Dakota then Nebraska).
- The new pipeline will disturb less land than the pipeline that has already been built. While the Keystone XL will have the capacity to deliver more oil — 830,000 barrels a day vs. 590,000 for Phase 1 — its U.S. footprint is more than 200 miles shorter than Phase 1.
- Pipeline builders have already addressed the major environmental objection. Environmentalists argued that Phase 4 would transport oil across environmentally sensitive areas of Nebraska. Gov. Dave Heineman expressed similar concerns. So the builder, TransCanada Corp., rerouted the pipeline, which satisfied the governor and the Nebraska Legislature.
- The expanded pipeline doesn't move just Canadian oil; TransCanada routed the expansion to transport up to 100,000 barrels a day of U.S. crude oil from the Bakken reserves in North Dakota and Montana.
- Keystone XL isn't just another way to import oil to the USA, it could actually lower the U.S. trade deficit. The U.S. trade deficit has been at a four-year low, primarily due to declining oil imports. Approving the Keystone XL will improve that trend, allowing the U.S. to export more refined petroleum products that build jobs at U.S. refineries while lowering the trade deficit.
- Many say that by not building the Keystone XL, the U.S. would be taking a stand against importing the Canadian tar sands oil that environmentalists claim is particularly damaging. Such a stand would only be symbolic. According to The Wall Street Journal, the number of train cars carrying Canadian oil is up 20%, and U.S. refineries are expanding their ability to take delivery by rail. Rival pipelines are expanding their existing capacity because they don't require new approvals. The oil is coming, the only question is how much new investment there will be in U.S. energy infrastructure.
The fact is that the Keystone XL pipeline is simply an extension of an already existing program that is working well, creating jobs and expanding U.S. manufacturing. It should be an easy decision for anyone concerned about the economy.
Merrill Matthews is a scholar at the Institute for Policy Innovation.
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