Keystone XL Pipeline

TransCanada Corp. — now TC Energy — proposed in 2005 a pipeline to transport crude oil from its Hardisty, Alberta, production facilities to U.S. facilities in the Midwest and Gulf Coast. The proposal was envisioned as two projects: Keystone and Keystone XL.

The Keystone project is complete and operational. The Keystone Mainline, a 1,353-mile-long, 30-inch pipeline from Hardisty to refineries in Wood River and Patoka, Ill., went into service in June 2010. The Cushing Extension is a 36-inch pipeline running 298 miles from Steele City, Neb., to facilities in Cushing, Okla. It went into operation in February 2011.

In 2008, TransCanada proposed that the Keystone XL project be completed in two phases as well: the Gulf Coast Project, a 435-mile-long, 36-inch pipeline to connect the Cushing facilities to refineries in Houston and Port Arthur, Texas; and Keystone XL, a 36-inch pipeline running 1,179 miles from Hardisty to Steele City. The Keystone XL project would include the Bakken Marketlink Project, providing facilities in Baker, Mont., to transport crude oil from the Williston Basin.

The Gulf Coast Project is complete and operational. The cross-border Keystone XL segment requires the approval of the U.S. State Department and has faced political, regulatory and legal obstacles.

According to TransCanada, the Keystone project pipeline segments can deliver 591,000 barrels per day. The company says the Keystone XL projects would have an initial capacity of 700,000 bpd and a potential capacity of 830,000 bpd.

Critics of the Keystone XL Pipeline cite their concerns about oil spills, but the driver of opposition is the concern about the proposal’s impact on climate. Environmentalists say petroleum produced from tar sands results in greater carbon emissions than conventionally extracted crude oil. The U.S. State Department’s environmental impact statement considered that issue, but concluded that the pipeline would not change substantially production levels at TransCanada’s Alberta facilities.

The Keystone XL Pipeline would significantly increase the pipeline capacity for oil shipped from Alberta, Canada, to the Gulf Coast of the United States — providing facilities there with an additional supply of petroleum for refining and, arguably, export. In addition, the proposal would provide a pipeline link for oil shale production at the Bakken Formation underlying North Dakota, Montana, Saskatchewan and Manitoba.

Proponents also point to jobs that would be created during construction of the pipeline as well as local property taxes that would be paid during operations.

Proponents also argue that pipeline transport is safer than the alternatives — a hotly debated topic.

Regarding economic impact, the State Department’s Final EIS for the project concludes: “During construction, proposed Project spending would support approximately 42,100 jobs (direct, indirect, and induced), and approximately $2 billion in earnings throughout the United States…. Construction of the proposed Project would contribute approximately $3.4 billion (or 0.02 percent) to the U.S. gross domestic product (GDP). The proposed Project would generate approximately 50 jobs during operations. Property tax revenue during operations would be substantial for many counties, with an increase of 10 percent or more in 17 of the 27 counties with proposed Project facilities.”

The State Department’s conclusion that Keystone would have little impact on climate change has not convinced advocates of more aggressive policies to combat greenhouse gas emissions. Those critics challenge State’s assumption that tar sands production would be largely unaffected by the failure to build the pipeline.

More broadly, critics of the proposal object to a commitment of significant resources to construction additional infrastructure for carbon-based fuels.

President Obama, while rejecting the proposal, took a more restrained view of the project: “Now, for years, the Keystone Pipeline has occupied what I, frankly, consider an overinflated role in our political discourse. It became a symbol too often used as a campaign cudgel by both parties rather than a serious policy matter. And all of this obscured the fact that this pipeline would neither be a silver bullet for the economy, as was promised by some, nor the express lane to climate disaster proclaimed by others.”

TK

TK

Oil, or tar, sands are a mixture of sand, clay and a heavy, viscous oil, bitumen, that requires unconventional recovery methods. Those methods include open-pit mining — the oil is then extracted from the sands — or underground heating, typically through steam injection, and extraction.

The world’s largest deposits of tar sands are found in Alberta, Canada, and Venezuela. In the United States, the largest deposits are located in Utah. Only Canada produces oil from tar sands on a large-scale, commercial basis. Most of what Canada produces is exported to the United States.

Approximately two tons of tar sands are required to produce one barrel of oil, according to the Department of the Interior.