API plans major campaign to support Keystone XL pipeline project

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, Dec. 8 -- The American Petroleum Institute is preparing a major grassroots and advertising campaign to support the proposed Keystone XL crude oil pipeline project, an API official disclosed. “We’ve been promoting the economic benefits and jobs this resource can bring to the US for some time, and we don’t think it has been fully registering with the public,” Cindy Schild, API’s refining issues manager, said on Dec. 8.

The campaign’s details are still being worked out, but API expects to launch it in January, she told reporters in a teleconference. “It’s a matter of economic benefits and a matter of jobs. That’s what we’re going to communicate with our vast grassroots network,” Schild said.

TransCanada Corp. has proposed building a 1,661-mile, 36-in. pipeline to transport oil produced from Canadian oil sands from Hardisty, Alta., to a delivery point near Nederland, Tex., to serve refineries at nearby Port Arthur. It is awaiting approval by the US Department of State, which is required for cross-border projects.

A coalition of 20 environmental groups launched an advertising campaign on Nov. 30 implying that allowing Keystone XL to be built could lay the foundation for a disaster comparable to the oil spill from BP PLC’s deepwater Macondo well in the Gulf of Mexico. The groups reportedly are spending $500,000 to urge US President Barack Obama to intervene and stop the Keystone XL project.

Schild said roughly half of the 1.9 million b/d of oil that Canada supplies to the US comes from oil sands. “We will consume more oil, and much of it will continue to be imported,” she maintained. “Every barrel we import from Canada will replace oil from less secure sources. The heavy oil we import from there already is replacing heavy oil we used to import from Mexico and Venezuela, where has been in decline.” 

John Kerekes, API’s central region director, said a 2009 Canadian Energy Research Institute study estimated that 342,000 US jobs would be created, largely in the Midwest, from the proposed pipeline’s construction. “Some in Congress are urging delaying this major pipeline project. I can say that most people I’ve talked to in the Midwest favor it,” he said. “There are 400 newly certified pipeliners out of Lincoln, Neb., ready to go to work once the project gets its permits.”

The project’s potential US economic benefits go beyond the pipeline’s construction, Schild noted. “Much of the money we send to Canada to import this oil will come back as Canadians buy US goods and services,” she said.

Kerekes said refineries in the upper US Midwest already are processing oil from Canadian oil sands transported by existing pipelines. “Keystone XL is trying to extend it to Oklahoma and beyond. It also would provide an on-ramp for crude oil being produced in North Dakota and Wyoming which now is being transported by trains and trucks,” he said.

Schild said refineries across the country have spent substantial sums for years to increase heavy crude processing capacity. “In the Upper Midwest, the two Minnesota refineries are almost entirely Canadian supplied, as is ExxonMobil’s at Joliet and Citgo’s in Lemont, Ill.,” added Kerekes. “Companies have been expanding their refineries’ capacity across the Midwest.”

“We think the project will be approved because there are so many compelling economic reasons to build it,” said Schild. “This is a huge, huge deal for what this country needs right now, and it’s only one project. Our industry is investing heavily in infrastructure.”

Contact Nick Snow at nicks@pennwell.com.

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