Forum Center, 1/31/12

W as the Keystone XL Pipeline an Election Year Casualty?

In late 2011 the President announced that he was delaying any decision on whether or not to approve the Keystone Pipeline XL project until 2013, after the next presidential election. In December 2011, Congress voted to give the Obama Administration a 60-day deadline to make a decision on TransCanada’s application for the construction of the Keystone XL Pipeline

Last week the Obama administration stopped the Keystone Pipeline XL project from moving forward. The President announced that his rejection was not on the merits of the project but rather on the short review period demanded by the Congress. If the U.S. decision rejecting the pipeline remains U.S. policy, Canada is considering rerouting the pipeline west to Vancouver to sell to the eager Asian markets.. While environmentalists cheered the decision, the President is facing harsh criticism from proponents of the project, including a number of unions whose members will lose the opportunity for employment.

Phase one of the Keystone project is already in operation and went online in June 2010.  That 30 inch pipeline is delivering 435,000 barrels of crude oil each day from Hartisty, Alberta to refineries in Illinois. The overall plan for the pipeline includes refineries in Illinois, a hub in Oklahoma, and proposed connections to refineries along the Gulf Coast of Texas.

The pipeline is owned by TransCanada, a company with a 50 year history of building pipelines in North America. TransCanada proposed the Keystone XL extension in 2008. The proposed extension would run through Montana, South Dakota, and Nebraska where it would join an already operational pipeline at Steel City, Nebraska. It is this extension which has become the subject of a huge battle between environmentalists and proponents of domestic energy.

In its March 2010 report, the Natural Resources Defense Council stated that “the Keystone XL Pipeline undermines the U.S. commitment to a clean energy economy,” instead delivering dirty fuel from oil sands at high costs. On June 23, 2010, 50 Democrats in Congress spoke out against the Keystone XL pipeline. In their letter to Secretary of State Hillary Clinton, they warned that “building this pipeline has the potential to undermine America’s clean energy future and international leadership on climate change.”

Some environmental groups, citizens, and politicians have raised concerns about the potential impacts of the Keystone XL extension. They argue that the pipeline could pollute air and water supplies and harm migratory birds and other wildlife. Its original route crosses the Sandhills in Nebraska, the large wetland ecosystem, and the Ogallala Aquifer, one of the largest reserves of fresh water in the world. The Ogallala Aquifer spans eight states, provides drinking water for two million people, and supports $20 billion in agriculture. A major leak could ruin drinking water and devastate the mid-western U.S. economy. After opposition for laying the pipeline in this area, TransCanada agreed to change the route and skip the Sand Hills. Portions of the pipeline will also cross an active seismic zone that had a 4.3 magnitude earthquake as recently as 2002.

TransCanada CEO Russ Girling has described the Keystone Pipeline as “routine,” noting that 200,000 miles of similar oil pipelines in the United States today. He also stated that the Keystone Pipeline will include 57 improvements above standard requirements demanded by U.S. regulators so far, making it “the safest pipeline ever built.” Proponents also point out that that opposition to the pipeline “makes no sense because emissions from the oil sands are a fraction of the emissions from coal and equivalent to California heavy crude oils or ethanol”.

Proponents for the pipeline argue that the project is environmentally safe and that it would be a financial boon to the states it passes through. They argue that the pipeline would put 20,000 US workers to work and spend $7 billion stimulating the US economy. Proponents allege that the President caved to environmentalists, and cite an election year as his reason.


Forum Question of the Week:

Was the Obama Administration’s decision to reject the Keystone XL Pipeline a sound policy decision or a casualty of the politics of an election year?

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