Sunday, February 22, 2015

Keystone XL: An Objective View

It seems an eternity since we first learned of Keystone XL, the pipeline to bring tar-sands oil from the Canadian province of Alberta. At times, it sounds like people think this is a proposed pipeline. There are parts that are in the proposal stage, but there is nearly a 1000 miles of pipeline finished, including a completed branch that goes to southern Illinois.

All was going well until the pipeline made its way to Arkansas—that's when environmentalist made their stand. The details of why are boring, but it was something about the type of soil and that a spill from tar-sands oil would be environmentally worse than other oils. An alternative route was eventually found through the state. Obama brought in the EPA to look into the pipeline. This is where it now stands – the EPA and president refuse to give the go ahead.

It seems now the pipeline has become about jobs. Republicans say that holding up the pipeline stops thousands of jobs. Democrats cry that it will create less than 40 permanent jobs. The truth of the matter is that jobs should not be involved in the decision. The decision should be based solely on American energy needs. No one can accurately predict the number of permanent jobs, but we know from past experience that there is a lot of maintenance to those pipelines and pumping stations.

What we know for sure is that it will have an economic impact on the country and the states in which it operates. In 2012, Keystone XL generated $37 million in proper taxes, which increased to $44 million in 2013. Anytime states get an increase in property tax revenues, they can either spend it on infrastructure improvement or give residents relief on their tax burden.

Some of the pipeline runs through Native American reservations. Trans Canada has employed many of those residents to work on the pipeline. At one point, Trans Canada had spent $50 million just in hiring native workers.

Opponents of the pipeline says that all the oil will be exported to China and the USA will only get the associated problems. Trans Canada denies this and for me it makes no sense to export that oil. That oil will make its way to gulf area refineries where much of the oil will be refined into gasoline, something the USA needs. If that gasoline was exported, then more oil would have to be imported at greater expense to make more gasoline. Exporting Keystone XL oil makes no economic sense.

Trans Canada has also clearly stated that they will be liable for any spills. It seems every few months we learn of a new train wreck that turns into a massive fireballs. Historic records prove that pipelines are safer for transporting oil than trains. The USA has thousands of miles of pipelines crisscrossing the nation, all with good safety records.

The important question would be to ask, is Keystone XL safe? Currently there are 2.4 million miles of pipeline in the USA, many of which run into Canada. Of course there are the occasionally leaks—some bigger than others. It seems we hear far more about crude carrying trains crashing and exploding than pipeline leaks. Since 2008, Crude oil transport by rail has increased by 40%. With completion of Keystone, less of that oil would have to be transported by rail. Some claim more oil is spilled from trains than pipelines. Even if that is true, pipelines never crash into houses or cars.

As long as we live in a society that is dependent on carbon based fuels, there will be leaks and accidents. Until science and engineers can come up with better energy solutions, the country needs oil. Keystone XL seems to have become more about politics than a mere pipeline. If it is true that tar-sands oil is more corrosive, that just means more dollars will be spent on repairs. The Lac-Mégantic, Quebec train wreck that burned most of the town center doesn't convince me trains are safer even if it can be shown to produce less spills. 

Inserts from Trans Canada

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