Keystone XL advocates, foes mark permit request’s fifth anniversary

Supporters and opponents of the proposed Keystone XL crude oil pipeline marked the fifth anniversary of the project’s application for a cross-border permit from the US Department of State with statements, hearings, and protests.

American Petroleum Institute and US Chamber of Commerce officials each urged US President Barack Obama to approve the cross-border permit for the pipeline from Alberta’s oil sands to US Gulf Coast refineries.

Nine US senators and US House Rep. Lee Terry (R-Neb.) announced a press conference where Sean McGarvey, president of North America’s Building Trades Unions, and Karen A. Harbert, president of the US Chamber of Commerce’s Institute for 21st Century, also were scheduled to appear.

Environmental organizations and other opponents issued statements saying that the proposed crude oil pipeline continues to be an exceptionally bad idea.

The project’s sponsor, TransCanada Corp., said in a blog posted at its web site that it received a similar permit for its original Keystone pipeline in 2008 after 21 months.

“If [the Obama administration] had followed the same regulatory process, Keystone XL would now be up and running, supplying America’s largest refineries on the Gulf Coast with a secure supply of lower-cost oil from producers in Western Canada and the US Bakken region,” it continued.

Additional benefits

“More than 9,000 skilled Americans would have been employed over 2 years of construction, helping the US recover from a devastating recession by injecting $5 billion in private-sector investment into the economy,” the blog said. “Communities along the pipeline route would now be seeing millions of dollars in additional tax revenues injected into their budgets.”

The US House Energy and Commerce Committee’s Commerce, Manufacturing, and Trade Subcommittee, which Terry chairs, held a hearing to mark the anniversary. “The Keystone XL pipeline is not only in our economic interest; it’s plainly in our national security interest,” he said in his opening statement.

“We’ve seen in the last 2 weeks just how much instability in the Middle East affects the price at the pump,” Terry said. “With our oil and natural gas plays here in North America, we now have the option to become energy independent. Why wouldn’t we want to have our energy come from middle America rather than the Middle East?”

API Pres. Jack Gerard said, “An anniversary of delay is not a call for celebration. Five years of review for a project that is in this nation’s best interest is unacceptable. Refining more Canadian oil at American refineries should be a no brainer. It will help displace oil from unstable parts of the world and enhance our national security.”

The extended delay indicates a bigger US energy infrastructure construction problem, Harbert told the House subcommittee. “Unfortunately, our energy sector suffers from a lengthy, unpredictable, and needlessly complex regulatory maze that delays, and often halts, the construction of new energy infrastructure,” she said.

‘BANANA’ mentality

“Federal and state environmental statutes such as [the National Environmental Policy Act], state siting and permitting rules, and a ‘Build-absolutely-nothing-anywhere-near-anything’ (BANANA) mentality routinely are used to block the construction and expansion of everything from transmission lines to power plants to pipelines,” Harbert said.

“Here’s what we have: A chronically sluggish economy and high unemployment; turmoil in the Middle East, which account for 30% of our oil imports; and burgeoning North American oil and gas production, which is being driven by a revolution in new technologies that are producing more energy with better environmental stewardship right here at home,” said US Sen. John Hoeven (R-ND), who also testified at the hearing.

“What we also have, however, is a project that has languished in bureaucratic limbo for 5 years—5 years to the day today, in fact,” he continued.

Delays in getting Keystone XL’s $5.3 billion northern leg approved mean it will take much longer to complete future US-Canada cross-border pipelines, according to Lucian Pugliaresi, president of Energy Policy Research Foundation Inc. (EPRINC).

“TransCanada purchased $2 billion worth of steel pipe 2 years before the anticipated regulatory approval, never expecting the United States would turn down a pipeline project when unrestricted volumes of Canadian oil sands are already permitted to cross the border when moved by either rail or truck,” he testified.

Obama also said Keystone XL’s cross-border permit would not be approved unless TransCanada could demonstrate that the project would not add to greenhouse gas emissions, Pugliaresi added.

Obvious questions

“Putting aside that [DOS’s] analysis of the project already concluded it would not add to GHG emissions, this requirement raises some obvious questions: Is the administration planning to ban further shipments by rail and truck? Does the administration have a plan to prevent the Canadian producers from selling oil in other markets around the world?” he said.

Opponents argued that the project’s problems have only grown more obvious with the passage of time. “For 5 years, the oil industry has wasted America’s time by spending millions of dollars and countless lobbying hours on behalf of their toxic tar sands pipeline,” said Bold Nebraska Executive Director Jane F. Kleeb.

“If Big Oil wants to focus on the past 5 years, we can talk about the fact that it has been 5 years too many of Big Oil bullying landowners along the route, and 5 years too many of Big Oil misleading the American public about their cockamamie jobs plan,” she continued. “But the president has acknowledged that Keystone XL is not a jobs plan, that it won’t enhance our national security, and that it will not be in our national interest if it exacerbates climate change.”

Anthony Swift, an attorney at the Natural Resources Defense Council, told the House subcommittee, said, “It is now clear that Keystone XL is critical to enable expansion of tar sands production and associated carbon emissions. Rail does not offer sufficient capacity for the industry’s expansion plans, and other potential pipelines face significant obstacles.”

Swift said NRDC now has new information showing oil sands crude is more carbon-intensive and generates substantially more petroleum coke than conventional grades. Spills near Kalamazoo, Mich., and Flower, Ark., since TransCanada first applied for Keystone XL’s cross-border permit show heavier crudes can be more damaging and harder to clean up, Swift said. “The substantial risks of the Keystone XL tar sands pipeline outweigh its marginal benefits,” he declared.

Contact Nick Snow at nicks@pennwell.com.

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