Nov 2 TransCanada Corp's Keystone XL
pipeline is at the center of an emotional debate in the United
States, pitting promoters of energy security and job creation
against advocates of a green economy who fear the environmental
risks of moving oil across the length of the country.
Here are the facts and figures of the proposal and the
major issues surrounding it:
Proponent: TransCanada, its country's largest pipeline and
power generation operator, is best known for running the most
extensive natural gas pipeline network in Canada and much of
the northern United States. Current market value is $30.5
billion. Company is led by Chief Executive Russ Girling.
Estimated Cost: $7 billion. When added to the initial
Keystone pipeline, which started moving crude to southern
Illinois and Cushing, Oklahoma, in 2010, the overall cost is
$13 billion, making it one of the largest infrastructure
projects on the continent.
Capacity: 700,000 barrels a day. When combined with
Keystone I the capacity would be 1.3 million bpd.
Scope: Keystone XL would move crude 1,661 miles (2,673 km)
to the Port Arthur, Texas, area from Hardisty, Alberta, a
pipeline terminal that serves supply from the Canadian oil
sands. In between, it would cross Saskatchewan, Montana, South
Dakota and Nebraska. In the southern part of the state, it
would be incorporated with the current Keystone line through
Kansas and Oklahoma. At the storage hub of Cushing, Oklahoma,
it would extend south to the Gulf Coast refineries.
State of play: Keystone XL received Canadian approval in
March 2010, but the U.S. State Department has yet to rule
following a lengthened environmental process that has included
draft and final impact statements and public meetings. The
department has said it aims to make its decision before year
end, but one official told Reuters that deadline could slip.
U.S. President Barack Obama raised the possibility of
further delay on Nov. 1. He said he expected the department's
report in the next several months, and then would make his
decision based on health, environmental and economic factors.
Pro: TransCanada and supporters say the project would be
key to improving U.S. energy security. These include the
Canadian government, the oil industry, some U.S. Republican
lawmakers and politicians of all stripes from energy-producing
states, as well as unions such as the Teamsters.
TransCanada has said the project, which will result in the
most advanced pipeline ever built, will create 20,000 jobs in
the United States at a time of high unemployment.
Backers say it would reduce dependence on oil from
unfriendly nations in the Middle East and from Venezuela and
would bolster supplies from a stable and reliable ally that has
the world's third-largest crude deposit. It would also provide
a large new source of oil in the Gulf Coast, where supplies
from Mexico and Venezuela are dwindling.
Canada already ships more than 2 million bpd to the United
States, representing 22 percent of U.S. imports, according to
the U.S. Department of Energy. Keystone XL, if fully used,
could displace up to 8 percent of supplies from other
Canada and its oil industry say the line will improve
returns for producers, which now sell much of their crude into
the U.S. Midwest and Oklahoma, where a glut of supply has
Con: Opponents include a broad range of environmental
groups, such as the Natural Resources Defense Council and
Friends of the Earth, celebrities, Canada's energy workers'
union, many Democrats and politicians from Nebraska.
Some fear the risks of oil spills in environmentally
sensitive regions, chiefly the area around the huge Ogallala
aquifer, much of which is in Nebraska. As much as 27 percent of
U.S. irrigated land overlies the water source, which yields
nearly a third of U.S. ground water used for irrigation,
according the the U.S. Geological Survey. It also provides
drinking water for 82 percent of residents within the aquifer
Critics contend oil derived from oil sands is more
corrosive to pipeline walls, although there is no conclusive
science on that. Recent spills in Michigan and Montana were due
to ruptures of pipes carrying Canadian oil, albeit older ones.
Opponents also say the line will encouage more development
of the Alberta tar sands, which they call detrimental to the
fight against global warming due to the high carbon intensity
of the operations. They say Keystone XL will dash hopes for a
move to renewable energy sources and a green economy.
Opponents dispute TransCanada's projections for job
creation, pointing to a Cornell University Global Labor
Institute study that argues the project will create just
2,500-4,650 temporary construction jobs.
Some analysts say the pipeline could boost U.S. pump prices
by reducing the gasoline glut at Cushing, Oklahoma.
The project poses political risks for U.S. President Barack
Obama as he seeks to hold on to the White House in 2012.
Green-lighting the pipeline would upset environmentalists,
part of his liberal political base, who are disappointed that
he has not passed broad climate change legislation.
But blocking the project would allow Obama's opponents to
suggest he has not done all he can to tap new sources of fuel
or create jobs. Obama, a Democrat, has advocated "green energy"
while Republicans have pressed for more oil drilling.
At the state level, Nebraska's governor and other lawmakers
threaten to delay the proceedings. The legislature is debating
a measure requiring TransCanada to move the proposed
right-of-way away from the aquifer, but some question whether
such a state law would violate the U.S. Constitution.