The Final Push for the Keystone XL Pipeline
The debate triggered by the proposed final stretch of the Keystone XL Pipeline is not unlike the 1,700-mile pipeline itself. Both have been snaking their way toward completion for the better half of a decade. It has been six years since construction began on Phase I of the pipeline, the same amount of time that the proposed 485-mile Phase IV XL extension has attracted fervent discourse both in favor of extending the pipeline to the Gulf of Texas — the privately funded project has sweeping public support in a number of opinion polls — and against it.
While legislation supporting the construction of the Keystone XL Pipeline was recently defeated by a single vote in the U.S. Senate, despite support from both parties, a reloaded legislature, with a bit more momentum, looks poised to square off with the Executive Branch this month. As we get ready for a frantic few months of final jockeying and spinning, it is important to look at the reasons why people are so passionate about the Keystone XL Pipeline. And to make sure that passion is grounded in facts.
My research has not only confirmed my belief that the Keystone XL Pipeline needs to be completed, but that it does not need to be nearly as contentious a project as it has shaped up to be. That may sound like wishful thinking, but I have a unique, first-hand experience into the politics of the Keystone XL Pipeline that has provided me with insight into how detractors view the project.
In March of 2012, I served as a late, fill-in participant representing the oil industry at a Tulane University debate focused on whether or not the Keystone XL Pipeline should be completed. While I had gathered up ample evidence demonstrating that the 36-in. pipeline was the safest way to transport oil — safer than any train, truck or ship —
I also shared the reality of how today’s spills were rare, small (three barrels or less), and both easily detected and cleaned up.
What I found most surprising was that the majority of self-described environmentalists and other opposition members were not overly concerned about the potential for spills, but were instead rallying around what they understood to be massive increases of greenhouse gas production that would accompany the project. For them, the Keystone XL Pipeline was part of the global warming narrative — a narrative or potential concern that exists in the processing of all fossil fuels.
It’s true. Canadian Oil Sands are heavier than lighter crude oil types. Therefore extracting from the Canadian Oil Sands requires more energy, and as a result, carbon dioxide emissions could increase. However, according to the U.S. State Department’s Final Environmental Impact Statement, it is estimated that the increase in greenhouse gases due to this project would be comparable to an increase totaling only .02 to .4 percent of the total U.S. annual greenhouse gas emissions. Relatively speaking, coal-fueled electrical plants produce 40 times more carbon dioxide.
Perhaps another way to look at the environmental impact is to appreciate all the hoops and hurdles that TransCanada, the company behind the pipeline, jumped through and over: three separate environmental impact studies, strict adherence to U.S. Department of Transportation Pipeline Hazardous Materials and Safety Administration (PHMSA) regulations, as well as compliance with 57 additional PHMSA conditions attached to the project. If anything were to go wrong, after all of these safety precautions were meticulously followed, TransCanada — and not U.S. tax dollars — would be there to clean up the mess.
The oil industry and pipeline supporters also need to be honest about the impact of the Keystone XL Pipeline. This is not “Manifest Destiny meets energy independence.” There are economic advantages, to be sure. For example, the Canadian Energy Council predicts that the pipeline will boost U.S. GDP $172 billion by 2035, in addition to the $25 billion that will be generated between private sector investment and tax revenue for municipalities along the pipeline route.
Moreover, the project would support more than 42,000 direct and indirect jobs nationwide, according to the U.S. State Department’s Final Supplemental Environmental Impact Statement. Many of these will be permanent, high-paying construction and manufacturing positions. But what knowledgeable supporters of the development are not promising is that consumers will see their price at the pump go down. Unfortunately, the relationship between fuel prices and domestic supply is incredibly more nebulous, with far too many forces at work to sort through here.
Likewise, those supporters in the know will readily admit that all the oil traveling from Alberta southward won’t be staying here. While it will definitely increase our domestic supply, oil will also be shipped to China and other nations because domestic providers can simply generate greater revenue through exportation. That said, there is certainly security knowing that, as the world’s second largest importer of oil at nearly 21 million barrels a day, the United States will be improving our domestic access and supply, as well as gaining access and supply to heavy crude oil from Canada, our friendly neighbor to the north. This relationship provides substantial relief to those concerned about our dependence on more volatile nations and regions, such as Venezuela and the Middle East.
In 2015 there will be another resolution on the Keystone XL Pipeline. And another vote, which will benefit from a swing in momentum favoring passage of the legislation needed to complete what was started six long years ago. The public has already weighed in. In a May 2014 CBS News poll, 56 percent of Americans support the pipeline expansion, while 28 percent oppose it. Now just imagine that breakdown if everyone had full, unfettered access to the whole story. It’s our responsibility to share it with them.
2015 January Issue, Keystone XL
Lara Pringle is a partner in Jones Walker LLP’s Houston office.