We are reposting this explainer from April 2013, to give folks a sense of why a single pipeline project has become such a hot political issue.
With the controversy over the Keystone XL pipeline extension surfacing yet again -- opponents will hold a rally Wednesday night in San Francisco's Pacific Heights neighborhood, outside a fundraiser President Obama is headlining--we thought we'd clarify a few points about the contentious project. (For more details, read Steven Mufson's new e-book, "Keystone XL: Down the Line.")
What is the Keystone XL pipeline?
The Keystone XL pipeline extension is the original name for a 1,664-mile project that would transport 830,000 barrels of crude oil a day, most of it from Canada’s oil sands to refineries in Port Arthur, Tex. It is the extension of TransCanada’s existing Keystone pipeline, which was completed last year. At this point the project has two segments: the 1,179-mile northern leg between Hardisty, Alberta and Steele City, Neb., which still requires a presidential permit, and the 485-mile southern leg known as the Gulf Coast Project between Steele City and Port Arthur, Tex., which is now operating.
Who favors Keystone XL, and who opposes it?
The Canadian government, oil companies and some unions back the project on the grounds that it will generate construction jobs and ease the flow of oil from a friendly neighbor to the United States. Gulf Coast refineries are particularly interested in getting heavy crude from Canada, because they’ve already upgraded their facilities to process the oil. Many politicians and residents in North Dakota and Montana also support the pipeline, because it will allow them to ship shale oil being extracted from the Bakken Formation in their states to Texas refineries.
Environmentalists, as well as some ranchers and other landowners along the proposed route oppose the project. They argue it will make it harder for the U.S. to shift away from fossil fuels, and will expand production in Canada’s oil sands.
Americans, on the whole, support the pipeline. A Pew Research Center poll released last spring found 66 percent of Americans back the project, as opposed to 23 percent who oppose it.
A Washington Post poll in June found similar results, with 59 percent in favor and 18 percent against. Just 34 percent said the pipeline would do significant harm to the environment, while 83 percent believed it would create a significant amount of jobs
How many jobs will it create?
Proponents say it would create anywhere from 20,000 to 100,000 jobs, while critics say it would only create a couple dozen. Both numbers are inaccurate: a new State Department assessment found it would create 1,950 jobs for a two-year period, after which it would generate 50 permanent jobs. the U.S. economy, according to State Department estimates. It would contribute $3.4 billion to the U.S. economy, which would account for 0.02 percent of the nation's gross domestic product.
Why is it so politically controversial?
There are two reasons Keystone has become a political lightning rod. The most important factor is what development of the oil sands—or tar sands—as they’re called by opponents—means for global warming. Extracting bitumen—a low-grade type of petroleum -- from the region is more akin to mining than conventional oil drilling, and the process of extracting crude or bitumen from oil sands emits roughly 15 percent more greenhouse gas emissions than the production of the average barrel of crude oil used in the United States. NASA climate scientist James E. Hansen, who just retired from his federal job so he could become a full-time climate activist, said if all the oil was extracted from the oil sands it would be “game over” when it came to the effort to stabilize the climate.
The pipeline also crosses a half dozen states, and people living along the route are concerned that spills from the pipeline could damage ecologically-sensitive habitat. While the project’s sponsor TransCanada says this new pipeline will boast the newest technology—the current Keystone pipeline has 16,000 data points that are refreshed every five seconds—recent spills like last year's breach of the Exxon pipeline in Mayflower, Ark. has many people worried.
Who makes the decision about whether Keystone gets built, and why is it taking so long?
The State Department has jurisdiction over project because it crosses an international border, and it must conduct a lengthy review—which consists of both a detailed environmental analysis and a national interest assessment—before it signs off on a permit. TransCanada first applied for a permit nearly four years ago, and State had completed its environmental analysis when Congress tried to force President Obama’s hand by setting a deadline for a final decision by February 2012. Obama responded by rejecting the permit, on the grounds that his officials did not have enough time to conduct a proper review.
In response TransCanada changed the route of the project’s northern leg so it would avoid much of Nebraska’s ecologically-sensitive Sand Hills region, and reapplied for a presidential permit. The State Department received 1.5 million comments on its latest draft environmental impact assessment, and released its final environmental impact statement on Friday. it still needs to conduct a national interest assessment before making a final decision.
That announcement is likely to come either in late summer or early fall, and President Obama is expected to personally weigh in on the final decision.
Congress has no formal say in the matter, though on March 22 the Senate approved a non-binding resolution in favor of building the project by a vote of 62 to 37, with 17 Democrats voting aye.
Could Canada's oil be shipped another way if the president blocks the pipeline?
Yes. Right now the amount of rail shipments of Canada's oil sands are on track to quadruple this year, so it could make it to the Gulf Coast that way instead. Canadians have threatened to sell their crude oil to China, either by shipping it to their east or west coast and sending it by ship, but there are legal and logistical hurdles to undertaking such a plan anytime soon.
The State Department noted there has been an expansion in oil shipments by rail in the past few years, and that western Canada could have the capacity to load and ship 1 million barrels a day by rail by the end of this year.
Will the oil shipped via the pipeline stay in the United States?
Once the refineries get the oil, there's no guarantee the final product will remain in the United States. In the fourth quarter of 2012, for example, Valero refineries exported nearly 9 percent of their gasoline products overseas.
When is the next public event connected to Keystone?
A group of activists opposed to the project held 280 vigils in 49 states Monday night, a move organized by the mobile phone company CREDO. Environmentalists are planning a wave of phone calls and e-mails aimed at policymakers Tuesday, and the oil industry is planning events in several states in the coming weeks. In addition, the State Department likely will hold public hearings as part of its national interest determination process.