- The Washington Times - Monday, August 8, 2011

Republicans and business leaders are urging President Obama to turn talk of creating jobs into action by green-lighting a long-delayed $7 billion expansion of a Canada-to-Texas oil pipeline that supporters say will create 20,000 jobs.

The proposed 1,700-mile Keystone XL pipeline, which would deliver Canadian crude from the oil sands of Alberta to Gulf Coast refineries, can’t go forward without the president’s approval through the State Department’s permitting process, where it has been stuck for three years in part because of environmental concerns.

“The fact is that pipelines leak,” said Harlan Hentges, executive director at the Center for Energy Matters. “If you got one, it’s going to leak. The only question is when.”

TransCanada, the Canadian oil company behind the project, said the pipeline extension, which could carry as many as 1.1 million barrels of oil a day, will ease American dependence on supplies from the unstable Middle East.

“We could help reduce the amount of imports from the Middle East,” said TransCanada spokesman Terry Cunha, “which would ensure energy security for the United States.”

Canada is becoming an energy superpower in almost every sense of the word,” said John Kerekes, the central region director at the American Petroleum Institute. “Right now, they understand that their No. 1 market is us.”

White House tightrope

The political and diplomatic sensitivities of the project were on display last week when Secretary of State Hillary Rodham Clinton met with Canadian Foreign Minister John Baird, who again pushed for the White House to sign off on TransCanada’s plan.

Asked about the project after the meeting, Mrs. Clinton said the State Department is awaiting a required environmental impact report before moving forward, but she promised action before the end of the year.

“We have worked diligently to make sure that we have full understanding of all of the consequences, including the very important point that the minister made to me about energy security and what that means for our two countries,” she said Thursday.

“We are leaving no stone unturned, and we expect to make a decision on the permit before the end of the year.”

The White House is walking a political tightrope on the project, which environmentalists say could endanger hundreds of miles of pristine American heartland from Montana to Oklahoma, as well as Nebraska’s Ogallala Aquifer, the underground source of drinking water and irrigation water for much of the Midwest.

Proponents say the project’s benefits far outweigh the risks.

Pressure builds

Republicans on Capitol Hill and business groups have voiced strong support for the Keystone XL project. The U.S. Chamber of Commerce has created a “Partnership to Fuel America” to push the issue.

The 2010 midterm elections also provided a political boost for the second pipeline.

The GOP-dominated House last month voted 297-147 on a bill to force the administration to issue a ruling by Nov. 1. The Senate is not expected to pass the bill despite a clear shift in sentiment on Capitol Hill.

Proponents say the pipeline will directly create 13,000 construction jobs and 7,000 manufacturing jobs. It also is estimated to spur 118,000 secondary jobs. This is work America needs, advocates say, and Washington shouldn’t reject the project if it is serious about improving the economy.

Speeding cheaper Canadian oil to market also could help lower gas prices, TransCanada argues.

Proponents say the pipeline, with its 1.1 million barrels per day capacity, is critically needed for a country that produces 4 million barrels daily while consuming 15 million.

“We’re all the sudden discovering we have a lot of oil a lot closer to the U.S.,” Rep. Ed Whitfield, Kentucky Republican, told reporters this week.

Opponents’ fears

Environmentalists and some farmers groups say the cost of the pipeline is too high.

The Alberta oil, known as “tar sands oil,” is the most harmful type of oil for the atmosphere, the Dirty Oil Sands network says on its website. Tar sands oil produces three to five times more greenhouse gas pollution than traditional oil and is the fastest growing source of greenhouse gas pollution in Canada, the group says.

To keep the pipeline running, electricity pump stations along the 1,700-mile stretch would have to step up production. That could lead to more expensive electricity costs for locals. It also would mean more greenhouse gases polluting the air. That, in turn, could cause compliance problems for communities along the pipeline that have difficulties meeting the Environmental Protection Agency’s air quality standards.

Also, any accident at the 450-mile-wide Ogallala Aquifer could be disastrous.

TransCanada says its pipelines are some of the safest in the world and argues that most spills are small and cleaned up quickly.

Environmentalists point out that 12 spills occurred during the first year along the constructed portion of the pipeline, Keystone 1.

“Most spills are small,” said Rosemary Crawford, project director at the Center for Energy Matters. “However, this product is proving to be so toxic that even a small amount of it that spills is dangerous to the people in that area.”

Ms. Crawford said tar sands oil spills are “nearly impossible to clean up.”

“If it goes into a river or into an aquifer, it’s there and it will stay there,” she said.

If a state-of-the-art pipeline is spilling this often, Mr. Hentges asked, what will happen when it gets old and starts to wear down? “It’s a bad indication of things to come,” he said.

Eminent domain issues

Mr. Hentges said he also is concerned for landowners who would be uprooted to build the pipeline. He says it’s one thing for the government to use eminent domain to build a street or railroad for public use. But it’s another thing for a foreign company to be granted that right for a private business purpose.

“If you’re a landowner,” he said, “you’re immediately going to be impacted by the fact that bulldozers came through and took out your land where you live and work.”

Jane Kleeb, director of Bold Nebraska, an advocacy group opposed to the pipeline, argues that the U.S. would be better off drilling domestically rather than buying oil from a foreign source.

“We still need to be exploring drilling,” she said. “Relying on Canadian oil, or Venezuelan oil, it’s still foreign oil. The last time I checked, Canada is not part of the United States.”

Matt Letourneau, a spokesman for the U.S. Chamber of Commerce’s Energy Institute, said that increasing domestic production cannot solve all of the nation’s problems. With U.S. demand for energy expected to go up 21 percent by 2035, he said, there will always be a need for foreign oil to supplement production at home. He said he would rather that come from Canada than the Middle East.

“Obviously, we’d like to drill domestically, too,” he said. “But it’s not an either-or proposition. We will still need to import oil, even if we dramatically increase our domestic production. The question is where that oil comes from.”

Stalled since 2008

The Keystone pipeline project started in 2005. The company received permission from the U.S. State Department to build the initial phases of the project, Keystone 1, in 2008, and the first leg was complete two years later. The second phase was finished in February when the two pipelines were connected in Steele City, Neb.

The third phase has been hung up since September 2008, when the company applied a second time to build the extensions, known as Keystone XL, to the north and the south, so that oil from Alberta could be transported to Texas.

After nearly three years, the application has yet to be approved or denied. If the Obama administration gives them the go-ahead, the full pipeline could be operational by mid-2013, the company said.

The State Department is wrapping up the last stages of its review and is expected to release its final environmental impact statement this month. The first two reviews seemed to favor the project, but the EPA has protested, so business groups are waiting to see how that affects the last report.

After the report is released, the State Department will have a 30-day comment period, when it will hold nine public hearings at locations near the pipeline. At the same time, it will have a 90-day comment period from relevant federal agencies, such as the EPA, the Energy Department, the Interior Department and the Pipeline and Hazardous Materials Safety Administration.

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