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Keystone XL a Bullet Compared With Other Pipelines

By Daniel J. Graeber | Sun, 10 March 2013 00:00 | 2

Members of the U.S. House of Representatives drafted a measure that would strip the president of his authority to approve the $7 billion Keystone XL pipeline planned from Canada. Dubbed the Northern Route Approval Act, the legislators backing the measure said four years worth of delays is long enough for a pipeline that could bring another 830,000 barrels of oil to the U.S. market, already booming with oil of its own. Compared with other major pipeline projects in Europe, however, the time horizon suggests Keystone XL is anything but the project facing the roadblocks that its supporters contend.

Canada's National Energy Board, the independent energy regulator, scheduled its first oral hearings on the proposed pipeline in late 2009. Since then, pipeline company TransCanada has revised the route through Nebraska in order to allay state environmental concerns. Now, the U.S. State Department, a little more than three years later, submitted its own draft environmental assessment on the project. Final say, however, rests with U.S. President Barack Obama, who needs to sign off on the project because it would cross the U.S.-Canadian border.

Related article: Environmentalists Futile Battle Against Keystone XL

Rep. Lee Terry, R-Neb., however, says he's frustrated with what he says are undue delays for a project that would not only provide a stimulus to the regional economy, but protect the North American energy sector from foreign shock.

"If we see further delays as we have in the past; Congress is ready to act," Terry said in a statement. "This discussion draft is part of that process."

Past efforts from House leaders to force the pipeline's approval have fallen flat once they reach the Senate. Sen. Robert Menendez, D-N.J., chairman of the Foreign Relations Committee, said lawmakers there would take up the issue "at some point."

By comparison, similar projects overseas aren't setting any regulatory speed records in their own right. The 1,099-mile Baku-Tbilisi-Ceyhan oil pipeline, one of the longest in the region, was dreamed up in Ankara in 1993, a full 12 years before first oil finally made its way from Azerbaijan. The Eastern Siberia–Pacific Ocean oil pipeline, a 3,000-mile long behemoth, took a decade from drawing table to refinery. By, say, 2023, will tar sands oil from Canada still be in the U.S. national interest?

Related article: New Report States that Keystone XL will Only Create 35 Permanent New Jobs

For Canadian energy companies, there's emerging something of a "wait and see" attitude on whether projects like Keystone XL are worth the effort. Canadian Prime Minister Stephen Harper, for his part, aims to diversify his oil export options by courting Asian economies as Canada relies almost exclusively on the United States for energy revenue. There, while projects like the planned Northern Gateway pipeline, envisioned seven years ago , are contentious, they don't need the multilateral review of Keystone XL.  And it may have taken only a few months to lay the first sections of the giant 3,100-mile cross-border Enbridge Pipeline System in the 1950s, but when part of that pipeline burst open in Michigan in 2010,  it resulted in the largest ever fine - $3.7 million – handed down by U.S. regulators.

There's a lot at stake in a $7-billion project like Keystone XL. High-profile arrests, like that of Hollywood starlet Daryl Hannah, make interesting headlines for the environmental side of the debate. Those concerns, however, were nullified by a State Department report that said tar sands production would go on, with or without Keystone XL. For supporters, then, it comes down to time management. "Four years and thousands of pages of environmental reviews," is plenty for backers like Lee. But given the history of pipeline development, the debate over Keystone XL may have only begun.

By. Daniel J. Graeber of Oilprice.com

About the author

Contributor
Daniel J. Graeber
Company: Oilprice.com
Position: Senior Analyst

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  • sharonsj on March 11 2013 said:
    Please tell me how oil owned by Canada brings oil to the U.S. markets when the Keystone execs say is destined for sale overseas? "Energy independence," as touted by the Republicans, is delusional bullshit.
  • Hope57 on March 11 2013 said:
    The pipeline is destined to go through the US for export at the coast, not to the US. . . just like many of the pipelines being developed for natural gas. Curious how many of these pro-XL and fossil fuel politicians have jobs with the oil and gas industry waiting for them, not to mention all the lobbying dollars they have already received!

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