The cowboy capitals of both Canada and the U.S. could be inseparably linked – by crude. If completed, Calgary-based TransCanada's proposed Keystone XL pipeline expansion would have the capacity to transport 1.1 million barrels of dilbit from Alberta to Texas every day.
Dilbit (from “diluted bitumen”) is formed by mixing bitumen, mined from Alberta's Tar Sands, and natural gas liquid condensate. It can be transported like conventional crude, but must be further processed for final use.
TransCanada experienced a setback with the US Department of State's Nov. 10 press release: “Since 2008, the Department has been conducting a … review of TransCanada's application for the proposed Keystone XL Pipeline project. As a result of this process, particularly given the concentration of concerns regarding the environmental sensitivities of the current proposed route through the Sand Hills area of Nebraska, the Department has determined it needs to undertake an in-depth assessment of potential alternative routes in Nebraska.” The final decision “could be completed as early as the first quarter of 2013.”
In an interview with the Calgary Herald, Alberta Premier Alison Redford expressed concern over the delay. “Our position has always been clear that we respect and understand that approval of the pipeline is a US domestic matter, but the fact remains that Keystone XL is a key piece of infrastructure for our province. I sincerely hope that the State Department made this decision based on science and evidence and not rhetoric and hyperbole from very well-organized interest groups.”
Ben West, the Healthy Communities Campaigner for the Wilderness Committee, comments, “What seems pretty clear to me is that Obama doesn't want to deal with it during the election. Ultimately he has to sign off on it. I think that we're going to be looking at a decision on it sometime just after the election.” The Wilderness Committee is a non-governmental organization working to protect Canadian wilderness and educate the public.
From their website: “TransCanada believes Keystone XL will ultimately be approved, as it is too important to the US economy and its national interest.”
On Nov. 22, the Nebraska Legislature gave final approval to legislation that provides a framework to site pipelines through the state and study the potential effects of proposed pipelines. The Major Oil Pipeline Siting Act provides a means for rerouting the Keystone XL around the Sand Hills region of Nebraska.
This area contains 1.3 million acres of wetland, from which water flows into the approximately 450,000 square kilometre Ogallala aquifer. Included in the latest revision of the bill is the commitment from Nebraska to pay for the Environmental Impact Study, which will assess the risks posed by the pipeline.
“TransCanada's made it pretty clear that if the pipeline was delayed that long then a lot of the contracts that people were looking to buy up from them would probably end up going somewhere else,” said West. “So just the economics of it alone, I think, could kill the Keystone pipeline expansion.”
The Perryman Group, an economic and financial analysis firm, published a business impact assessment of the Keystone XL project. The report (commissioned by Trans- Canada according to the Huffington Post and other news sources) states that the project will directly create 20,000 manufacturing and construction jobs.
However, these benefits are disputed by others. A Cornell University Global Labour Institute document says that the conclusion of the Perryman report “is not substantiated” and that “the project will create no more than 2,500 – 4,650 temporary direct construction jobs for two years, according to TransCanada's own data supplied to the State Department.”
West laments that “with almost every environmental campaign, there's always this sort of framing that it's jobs versus the environment. I think it's pretty disingenuous really, because for the companies, they're in it to make money, they're not in it to employ people. If they can do it employing less people they'd be happy too … That's definitely been a big part of the Keystone campaign.”
The delay of approval means that Albertan firms may need to find more sources for their bitumen if they want to expand production. Alternatives include several other local pipeline projects, some of which have also aroused controversy.
Enbridge Inc. is seeking approval for the Northern Gateway pipeline which goes from Edmonton, AB to Kitimat, BC, and Kinder Morgan operates the existing Trans Mountain Pipeline System, which moves 300,000 barrels of crude from Edmonton to various locations on the West coast, including a Burnaby Chevron refinery and a tanker dock in Burrard Inlet. Kinder Morgan is pursuing the expansion of this pipeline, and West thinks that they have a better chance of success than Enbridge does with their proposed project.
“They've got an existing pipeline and an existing tanker traffic route. [The pipeline] burst in '07 in Burnaby, [but] little did most people know they actually expanded the pipeline by about 50,000 barrels … six months after the pipeline burst. And now they want to go up to 700,000 barrels a day through that pipeline. In 2005, twenty tankers took crude out of the inlet … If they get the expansion through that they want to do they could get up to … 300 tankers [per year],” explains West.
Keystone's delay will help Enbridge and Kinder Morgan make stronger cases for their projects as alternative shipping routes out of Alberta. West explains, “They can say … ‘We're the only game in town.’ … The flip side of it is that seeing the success in stopping or massively delaying a pipeline I think also emboldens the activists and the First Nations.”
West says that limiting the supply of oil is only half of the equation. “What I'd really like to see Obama do, and what really would make the biggest difference in it, is really talking about what needs to be done to decrease our demand for oil.”
// Illustration by Caitlyn Neufeld
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