Keystone XL Pipeline: Five Little-Known Facts About A Pipeline Designed To Move Crude Oil From Alberta, Canada, To The Texas Gulf Coast

on August 30 2013 10:50 AM
Keystone protest
The vocal minority: Protesters rally about the Keystone XL oil pipeline along U.S. President Barack Obama's motorcade as he arrives at the Jefferson Hotel in Washington on July 11, 2013. REUTERS/Yuri Gripas

The Keystone XL pipeline, an ambitious venture for shipping massive amounts of crude oil from Canada and the northern United States south to refineries on the Texas Gulf Coast, was proposed in 2005 by TransCanada Corporation (TSE:TRP). Since then it has been mired in controversy, with environmentalists and progressives lined up against labor unions and businesses.

1.      Specifications of the Keystone XL pipeline

The Keystone Pipeline would span 1,179 miles and transport two types of crude oil from Alberta, Canada, and from North Dakota and Montana, to refineries on the U.S. Gulf Coast, passing through the country’s pipeline hub in Cushing, Okla., along the way. The $7 billion pipeline project would be able to move about 800,000 barrels of crude oil per day.

2.      What are the pros of Keystone?

Proponents say that the benefits of building the pipeline outweigh the environmental risks by reducing dependence on foreign oil from countries that do not have U.S. interests in mind. The project will also create 20,000 jobs, according to TransCanada, which expects to spend $7 billion in the U.S. to build it. There is a lack of pipeline infrastructure in North Dakota and Alberta. The pipeline will help bring the glut of oil stuck in those areas to refineries in the U.S. Gulf Coast, where it can be put onto the market.

3.      What are the cons of Keystone?

Opponents of the pipeline worry about the environmental impact associated with the extraction of oil from Alberta known as oil sands. Oil sands, also referred to as tar sands, are permeated with bitumen, a form of petroleum in solid or semi-solid form that is blended in clay, sand and water. Environmental groups say the extraction method is more carbon-intensive than the method for conventional crude. If the pipeline is approved, it could add 1.2 billion metric tons of carbon pollution to the atmosphere during its 50-year lifespan.

4.      Where does Obama stand on the Keystone?

President Barack Obama has the ultimate power to approve the pipeline. Obama has delegated to the State Department to determine whether or not the pipeline is in “U.S. national interest,” but he has expressed doubts about the project. In June he laid out his Climate Change Action Plan and said his decision on the pipeline will be based on whether it would contribute to producing more carbon emissions. “The net effects of the pipeline’s impact on our climate will be absolutely critical to determining whether this project is allowed to go forward. It’s relevant,” said Obama, whose administration has been evaluating the project for more than 1,800 days.

5.      Where does the State Department stand on the Keystone?

The State Department was required to use an independent third party to review the environmental impact of the project. However, the consultant group hired for the review did not disclose that it had conflicts of interest with TransCanada, the company contracted to build the proposed pipeline. The Inspector General of the State Department is currently investigating the failure of the disclosure process, delaying any decision on the pipeline until January 2014.

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