What’s up with the Keystone XL Pipeline?

It has been almost seven years since the TransCanada Corporation first applied for a permit to expand its existing Keystone oil pipeline — because of this, Canadian and US relations have been strained and the TransCanada Corporation is becoming impatient while waiting for a final decision.

What is the Keystone XL Pipeline?

This extension on the Keystone Pipeline is referred to as The Keystone XL Pipeline. The now in place 1,179 mile pipeline begins in Hardisty, Alberta, runs east to Manitoba then south to Steele City, Nebraska and finally splits into two reaching Patoka, Illinois and Cushing, Oklahoma. As well, a now operating 485 mile southern leg known as the Gulf Coast project between Steele City and Port Arthur, Texas. The XL extension is intended to move from Hardisty, Alberta directly to Steele City, Nebraska and according to the TransCanada Corporation this extension will allow more product to be moved more quickly. Nonetheless, the extension has not yet been approved.

Who favors Keystone XL, and who opposes it?

The TransCanada Corporation states “The State Department report estimates that Keystone XL and the Gulf Coast Project combined will support 42,000 direct and indirect jobs” as well as ease the flow of oil from Canada to the US. With this in mind, the Canadian government, oil companies and some unions seem to back the project.

On March 11, 2010, the National Energy Board approved the project stating that the project would connect a large, long-term and strategic market for Western Canadian crude with the US Gulf Coast. Supporters are mainly focused on the fact that the Keystone XL will create jobs and reduce dependency on the Middle East for oil.

In contrast, opposition is mostly coming from environmental activists as well as some land owners along the route that the Keystone XL is to be constructed. One of the largest environmentalist concerns was that the XL pipeline route crossed the Sandhills, and Ogallala permeable aquifer in Nebraska which has remained 85% not developed and supplies drinking water to millions of Nebraskan residents (as well as residents of seven other states). However, in 2011, TransCanada agreed to move the pipeline proposed route to avoid the Sandhills. Although it was a victory for Nebraskans, this did not put an end to the opposition.

Environmentalists continue to argue against the safety of the pipeline in regard to leakage, and the development of the oil sands and what it means for global warming. Landowners continue to be concerned for the damage that any leakage from the pipeline could cause to the ecosystem regardless of the fact that TransCanada claims that the new pipeline will have the newest possible technology to help prevent this. Moreover, the March 2010 tar sands disaster (which is now the most expensive onshore oil spill in US history) still lingers over the Kalamazoo River and has left people questioning the validity of TransCanada’s statement. In terms of global warming, the process of extracting bitumen from oil sands emits roughly 15 percent more greenhouse gas than the production of the average barrel of crude oil used in the US. James E. Hansen who is a climatologist with NASA warned that if all the oil was extracted from the oil sands it would be “game over” when it came to the effort to stabilize the climate.

Finally, although those who favour the extension have claimed that the XL Keystone could create hundreds of thousands of jobs, a State Department assessment found that it would create 1,950 jobs for a two year period, and 50 permanent jobs. Evidently, the opposition for this extension continues to be strong and is obviously a huge contribution to the current “stand-still”. The Natural Resource defence council claims that building this pipeline would be a “step into the past instead of a shift into a clean energy future”.

Who gets the final decision? What is stalling it?

The final approval decision of the Keystone XL Pipeline is up to US President Barak Obama since the pipeline will cross the border between Canada and the United States. Obama’s Republican opponents are suggesting that the eco-friendly president must choose between the environment and jobs. In 2012, Obama rejected the proposal mostly because the Republicans attempted to obtain a quick decision from him, but also because the proposed route was still running through the permeable Sandhills. TransCanada Corp. then changed the route and resubmitted the Keystone XL for approval. The State Department says that its review process is still taking place and that Obama is waiting for an official recommendation from Secretary of State, John Kerry before proceeding. However, advocates for the Keystone XL Pipeline have their doubts that the president will give the pipeline extension the go-ahead. Many people did not take Obama’s environmental concerns seriously when he won the 2008 election. Obama is a strong advocate for fighting climate change, as is Kerry.

Since it’s been almost a seven year gap from the original application for a permit to now, many advocates and even opposition are wondering what is taking so long for a decision to be made. Over the years, it has been blamed on the push from the Republicans for Obama to make a decision as well as the fact that Obama is an environmentalist himself. Sen. John Hoeven of North Dakota made the claim that the current stand-still is caused by Obama waiting for congress to be out of session in August 2015, that way he will have less pushback and less criticism of his decision. Others speculate that there is an entirely new solution for a different pipeline all together, which may be causing all the delays.

What now?

Advocates for the Keystone XL have started to focus on the year 2017, when Obama will no longer be in office. They believe that this will be a chance for them to start to renew their efforts and start building.

The TransCanada Corp. has already started to plan a response if the pipeline is rejected by President Obama. The rumours are that the company is consulting lawyers on the NAFTA challenge and weighing legal implications. David Gantz, who was a NAFTA panelist, says that he believes that it would be wise for TransCanada to save their money, hold off and hope that whoever takes office in 2017 is Keystone XL friendly.

Canadians suspect that their coming election could delay President Obama’s decision. Obviously, the Keystone XL delay has had a huge strain on Canada-US relations so one would have to wonder why a final decision would be made during a campaign for Canadian prime minister. At this point, the lingering question is how much longer TransCanada will wait for a decision before they take legal action themselves.