The U.S. Senate rejected passage of the Keystone Pipeline by one vote this week. The controversial energy plan will be back on the agenda, however, in January. For most of us, separating fact from fiction as both sides alter the facts is difficult at best, but here are some things we do know.
First, we can describe the project. The proposed Keystone XL project consists of an 875-mile stretch of pipeline and related facilities that will transport 830,000 barrels per day (bpd) of crude oil from Alberta, Canada through Montana, South Dakota and Nebraska. It will then connect to existing pipeline facilities that flow through Nebraska, Oklahoma and ultimately down to the Texas Gulf Coast region.
About 40% of the total project has been completed. A 298-mile line that runs from Steele City, Neb to Cushing, Okla. already exists as does another 485-mile piece between Cushing and Nederland, Tex. Oil is already flowing within these segments of the pipeline from various oil wells within the U.S.. The remaining segment has been held up for years thanks to the political wrangling among various American politicians and lobbyists.
There has been a cost to this controversy. Thanks to the delays, the price tag to complete the project has already doubled to something like $8-9 billion. Once approved, it will take two years to build out the pipeline and get things connected.
Depending on who you listen to, the project would mean as few as 20,000 high-paying construction jobs to as many as 42,000 (if you count indirect jobs). Energy spokesmen will tout as many as 200,000, but don’t believe that. What no one disputes is that those jobs are only temporary. The actual head count of permanent jobs, once the project is complete, comes in at 50 or less.
Alberta has the third largest proven oil reserves in the world after Saudi Arabia and Venezuela, but much of it is buried within what is called “tar sands.” Tar sands are a mixture of sand, water, clay and bitumen. The oil-rich bitumen can be processed into heavy, viscous oil. Producing the stuff will emit an estimated 17% more greenhouse gases than traditional oil drilling in the U.S. That is why the likes of Al Gore and Robert Redford are against it.
So if it is environmentally evil and good for just a few long-term jobs why in the world would this country want to approve it?
Over the long-term it makes sense strategically for us and our trading partner to the north.
Let’s take Canada first. Our neighbor to the north is our largest source of oil imports, providing almost 2 million of a total of 9 million barrels of imports per day. Strategically, we know that two other major suppliers are problematic. Mexico’s oil output is declining and Venezuela is unreliable at best.
Transporting oil via the pipeline from Canada would replace that short-fall for America. In addition, what we don’t use, we can export. By law, America is only allowed to export third party oil. Right now that only amounts to 30,000/bpd. Next year that number is estimated to rise to 230,000/bpd. The Keystone pipeline would dramatically increase that number while reducing the amount we import from unreliable sources.
The fact is that with or without us, Canada will extract oil from their tar sands. So the argument becomes will we make it easier and safer for them to do so? Our environmentalists want Canada to just abandon the extraction program entirely.
Personally, I would rather our environmentalists focus more on our own issues and let Canada handle the environmental fallout from their tar sands extraction. In typical “America knows best” fashion we see nothing wrong with dictating what another country should do with its natural resources. But does Canada demand that we reduce our coal-fired generation industry, which has a carbon footprint 60 times larger than Alberta oil sands? Does anyone recognize that Canada produces less than two percent of the world’s greenhouse gas emissions and tar sands make up just 5% of that total?
For once, let’s do something that is good for Canada, a country that has stood by us through thick and thin for decades. Sure they can find other means of transportation—namely truck and rail–but why should they have to? The pipeline makes sense for us and for Canada.