Would Keystone XL Serve the U.S. National Interest?

by Marlo Lewis on March 17, 2014

in Blog, Features

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Would the Keystone XL Pipeline (KXL) serve the U.S. national interest? If the State Department answers that question in the affirmative, TransCanada Corporation can finally begin building the pipeline, more than five and a half years after originally applying for a construction permit.

TransCanada recently submitted comments to State making the case for an affirmative “national interest determination” (NID). The comments are clear, comprehensive, accurate, and, in my opinion, compelling.

Inspired by those comments, I will attempt here to state the common sense of the issue in my own words.

The interminable controversy over the KXL is stunningly pointless. Do modern commerce and transport chiefly run on petroleum-based products? Yes. Are pipelines the most economic, efficient, and safe way to transport large volumes of petroleum? Yes. Is Canada our closest ally and biggest trading partner? Yes. Is Canada already the largest single source of U.S. petroleum imports? Yes. Would building the KXL enhance the efficiency of oil transport from Canada to U.S. markets? Yes. Would building the KXL support tens of thousands of American jobs and add billions to the GDP during the construction period? Yes. Would all the financing be private and not cost taxpayers a dime? Yes.

So how could building the KXL not be in U.S. national interest?

In 2012, TransCanada sought permission to build the “Gulf Coast Project” (the green line in the map below), the southern leg of the 1,700 mile pipeline it originally proposed to build from Hardisty, Canada to Port Arthur, Texas. State environmental agencies and the U.S. Army Corps of Engineers granted all necessary permits for the Gulf Coast Project by August 2012.

Keystone XL Pipeline Gulf Coast Route, State Department Final EIS 2014

Construction began in August 2012 and the project commenced commercial service in January 2014. The earth did not shake, the sky didn’t fall, no one felt a “disturbance in the Force . . . as if millions of voices suddenly cried out in terror and were suddenly silenced.”

Something like 2.5 million miles of oil and gas pipelines already crisscross the lower 48.

Oil and gas pipelines map U.S.

Can anyone explain how adding another 875 miles (the orange line in the first map, above) would push the 2.5 million mile pipeline system over some kind of national interest ‘tipping point,’ endangering the economy or ecology of the U.S.?

The State Department is the lead agency in determining whether to approve or reject the KXL for one reason only — the pipeline originates in a foreign country, making it an issue of international relations. But since that country is Canada, rejection of the pipeline risks damaging relations with our closest ally. How could that serve the national interest?

America is a democracy, so U.S. foreign policy is supposed to reflect public opinion as well as reasons of state. But a national survey conducted by the Pew Research Center in August 2013 found broad public support for the KXL, with two-thirds (66%) in favor of building the pipeline and 23% opposed. Poking your closest ally in the eye just to appease a noisy faction would raise basic questions about America’s dependability and fitness for world leadership. Producing an affirmative NID should be a no-brainer for the nation’s top diplomats and foreign policy officials.

The Left’s demonization of the KXL smacks of magical thinking. To repeat, the KXL is subject to a “national interest determination” only because it would cross the U.S.-Canada border. Brian Ballantyne, an advisor with the U.S.-Canadian International Boundary Commission, aptly describes the boundary as “an impossibly thin membrane, phenomenal in length and height, but with no width.” By what occult power does crossing that “impossibly thin” line transmute otherwise mundane pipe into an ominous threat to the national interest?

Keystone foes will say I’m missing the point, the big picture, the gravest peril of the 21st century — climate change. In his July 2013 climate policy speech at Georgetown University, President Obama stated he would approve the KXL “only if this project does not significantly exacerbate the problem of carbon pollution. The net effects of the pipeline’s impact on our climate will be absolutely critical to determining whether this project is allowed to go forward.”

Well, I have news for the President: His litmus test is unscientific. The KXL cannot “significantly exacerbate” climate change. Cato Institute scientist Chip Knappenberger, using a climate model developed by the EPA, calculated the warming effect of Keystone’s incremental greenhouse gas emissions as estimated in the State Department’s March 2013 Draft Supplemental Environmental Impact State (DSEIS). The global warming contribution “works out to less than 0.00001°C per year” — one-thousandth of a degree in 100 years.

Don’t trust the State Department? No matter. Knappenberger explains:

And even under the assumption that all Keystone XL oil is additional oil in the global supply, the extra warming is still less than one ten-thousandths of a degree per year. In other words, if the pipeline were to operate at full capacity for the next one thousand years, it would raise the global average surface temperature by less than 1/10th of a degree!

Here’s the kicker. According to the State Department’s February 2014 Final Supplementary Environmental Impact Statement (FSEIS), the KXL will actually reduce net U.S. CO2 emissions. How so? If the permit to build the KXL is denied, U.S. refiners will still import roughly the same quantity of Canadian oil, they’ll just get it by less efficient modes of delivery: rail, barge, and smaller pipelines. Total annual emissions associated with those alternative modes are 28% to 42% higher than those associated with the KXL.

Keystone GHG compared to alternative scenarios

Some activists talk as if oil spill risk should be the litmus test for determining whether the KXL is in the national interest. Here too the pipeline passes with flying colors. According to the FSEIS, spills along the full route (Canada to Gulf Coast) of the proposed project are estimated to total 518 barrels per year – much less than the 1,227 to 4,633 barrels per year estimated for the alternative scenarios.

Keystone oil spill risk vs alternatives

The Obama administration’s foot-dragging on the KXL has already contributed to a surge in Canadian oil imports by rail. According to State’s 2014 FSEIS, rail transport of Canadian oil increased from practically zero barrels per day in January 2011 to 180,000 bpd in November 2013. Rail loading facilities in the Western Canadian Sedimentary Basin currently have a capacity of 700,000 bpd, and by year’s end capacity is expected to exceed 1.1 million bpd.

Rail Transport Canadian Crude

So KXL opponents need to realize that the choice facing the State Department is not between importing and not importing Canadian oil but between delivery by pipeline and delivery by alternative means, chiefly rail. That is to say, the real choice is between safer and less safe modes of delivery. As the Washington Post reported in January:

But there has been a spate of railroad accidents involving oil shipments in the past few weeks, including the Monday derailment of seven cars from a CSX train that was crossing a rail bridge to the Philadelphia Energy Solutions refinery, partly owned by the Carlyle Group. The accident closed down the Schuylkill Expressway. . . .

No oil was spilled, but the incident frightened local residents and officials. A collection of environmental groups said the oil trains were putting lives at risk in an urban area that includes a hospital and university buildings. Iris Marie Bloom, director of Protecting Our Waters, a Philadelphia-based grass-roots nonprofit group, said she lives “just blocks” away and called the accident “truly terrifying.” She said the rail shipments were “oil bomb trains.”

Other accidents have happened in recent months involving railroad shipments of oil. In July, an accident in Lac-Megantic, Quebec, killed 47 people. On Dec. 30, an oil train spilled 400,000 gallons and caught fire after hitting a derailed train near Casselton, N.D. And on Jan. 7, a derailment in the Canadian province of New Brunswick near Maine triggered a fire and forced the evacuation of about 150 residents.

As with State’s 2011 Final EIS and 2013 Draft SEIS, the 2014 FSEIS does not anticipate significant adverse environmental impacts from construction and operation of the KXL.

In contrast, the FSEIS does anticipate significant benefits for the U.S. economy. Construction of the proposed project would contribute approximately $3.4 billion to the GDP and support 42,100 U.S. jobs during the 2-year construction period.

Other national interest benefits include enhancing rather than undermining U.S. relations with Canada and enhancing energy security by, in TransCanada’s words, “connecting reliable domestic and Canadian supply sources to refinery markets in the Gulf Coast area with a demonstrated demand for these supplies.”

The President can end this artificial controversy any time he wants. All he has to do is speak truth to a powerful faction within his own base. That he will do so in an election year seems unlikely.



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