Keystone Pipeline: 5 Things You Need to Know

The Keystone XL Pipeline has pitched environmentalists against energy industry players for the past three years, and President Barack Obama on Wednesday sided with environmentalists in a conflict that has miles to go.

As the skirmishes rage and rhetoric soars, here are the five things you need to know about the controversial pipeline.

1. Tar Sands Oil and Energy Self-Sufficiency

The XL pipeline, if it ever gets built, will stretch from Alberta Canada all the way to the Gulf of Mexico, where U.S. refineries will be able to turn Canadian crude oil into gasoline and other fuels.

Canada is by far the largest supplier of crude oil to the U.S., providing the country with 1.9 million barrels per day, according to The Perryman Group, a Texas-based research firm that conducted a report on the economic impact Keystone will have on the six states through which it will travel.

The Keystone XL Pipeline System will have the capacity to deliver approximately 1.1 million barrels per day of Canadian crude oil to US markets each day. Proponents of the pipeline say the project will help insulate the U.S. from testy oil-exporting regimes and volatile regions of the world, thus helping the nation's energy self-sufficiency. TransCanada says the pipeline will supply the U.S. with roughly half the amount of oil it imports from the Middle East.

The National Resources Defense Council, however, argues that the crude oil from Canada's tar sands the pipeline will transport is corrosive and rather than insulate the U.S. from foreign oil markets, the pipeline will create the world's first international market for tar sands oil.

The NRDC asserts the pipeline extension will expand Canada's import capacity of tar sands into the U.S. to more than 3 million barrels per day, which Canada will not have the extracting capability to fill the pipelines to capacity until 2025.

2. Money and Jobs

The exact figures are contested, but TransCanada is promising the pipeline will create 15,000 construction and manufacturing jobs, generate $5.2 billion in property taxes from Montana, North Dakota, South Dakota, Kansas, Oklahoma and Texas and provide $20 billion in economic contributions.

The American Petroleum Institute, the largest U.S. trade group for oil and gas producers, said the pipeline will create 500,000 U.S. jobs by 2035, but opponents argue those are not permanent jobs.

The NRDC counters that tar sands will cause more pollution in areas already struggling to meet air quality standards imposed by the Environmental Protection Agency. Instead of allowing the Keystone pipeline, the United States should cut the use of oil and promote renewable energy instead, says the NRDC.

3. Most of it is Already Built

Most of the debate has focused on the Keystone XL Pipeline, but it is important to note, it is simply an extension of the Keystone Pipeline, which is already built and operational. It stretches from Hardsity, Alberta, and flows east to Manitoba then hooks due south to Steele City, Neb. From there it splits in two reaching Patoka, Ill., and Cushing, Okla.

A similar pipeline stretches from Wisconsin and Michigan all the way to Louisiana.

The Keystone XL Pipeline will relay Alberta to Steele City in one straight line of piping over much of Nebraska, then extend the current pipeline to Port Arthur, Texas, which is next to both Louisiana and the Gulf of Mexico.

4. Sandhills Nebraska, Environmental Concerns

The pipeline would flow over an environmentally sensitive area of Nebraska. Known as the Sandhills, the region is essentially a giant expanse of sandy hills under which lies the Ogallala Aquifer, the leading source of drinking and irrigation water for the nation's bread basket.The ground is permeable and the fear is an oil spill in the region will percolate down into the water shed contaminating the entire aquifer.

The Sandhills is considered an ecoregion by the World Wide Fund for Nature, due to its distinct soil composition, and is one of the most intact natural habitats of the Great Plains, according to the WWF. Roughly 85 percent has not been developed or altered by humans.

In November 2011, the Nebraskan legislature passed a bill that would reroute the pipeline away from the region, and TransCanada agreed.

A new route is expected within 10 days, reported Bloomberg on Thursday.

In the Department of State's final Impact Statement reviewing the project, the Keystone XL pipeline is expected to have between 1.18 to 2.51 oil spills of any size per year. By comparison, since the existing Keystone pipeline became operational in 2010 it has had 14 spills ranging from 10 gallons or less to 21,000 gallons.

On the other side of the debate are many of the nation's labor leaders. Union officials are normally shoulder-to-shoulder with environmentalists in the Democratic Party and in progressive coalitions, but the Keystone XL controversy has divided those two interest groups, with labor unions taking the same side as the oil industry.

5. Environmental Review and Rejection

The debate as to the project's environmental impact prompted the State Department to undertake a review of the project that started in 2008. Between 2009 and 2010, the department hosted 41 public meetings and published its draft environmental impact statement on April 16.

Responding to public comments, the department issued in April 2011 a supplemental draft impact statement, which received more than 280,000 comments. A decision was expected in December 2011, but last November President Barack Obama deferred a decision until after the presidential election. A final decision by the State Department was not expected until 2013, giving it enough time to review alternative routes as agreed between Nebraska and TransCanada.

The delay was met with frustration by Republicans in Washington and by Nov. 30, a bill was introduced that would force the president to approve the pipeline within 60 days of the bill's passing.

In mid-December Congressional Republican passed an amendment to the Payroll Tax Holiday bill that forced the president to make a final determination on the bill by Feb. 21.

With his hand forced, the president rejected the pipeline project, claiming his administration did not have enough time to review the project before the deadline.

TransCanada has vowed it will reapply for the project.