The US State Department and the Keystone XL Pipeline

Earlier this week the US State Department released their environmental impact study of the Keystone XL Pipeline. Essentially they found no environmental risks that were unmanageable and made no decisions on whether building the pipeline would be beneficial to the economy and energy needs of the United States.

They made a number of obvious statements…like building the pipeline would have no effect on US demand for crude oil…and that failure to complete the pipeline would not prevent continued exploitation of the Canadian oil sands. They did note that developing and refining oil sands crude does create more green house emissions than other crude oil sources. None of this is particularly surprising.

But one paragraph caught my eye and it seems to be self contradictory:

The president faces equally strong pressure from industry (to complete the pipeline ~ ed.), the Canadian government, most Republicans and some Democrats in Congress, local officials and union leaders, who say the project will create thousands of jobs and provide a secure source of oil that will replace crude from Venezuela, Saudi Arabia and other potentially hostile suppliers.

If the oil sands will be developed without Keystone XL, why the pressure on the president to build it? Obviously other options aren’t going to be equally profitable despite having to build a 1,700 mile pipeline.

And it will replace crude oil from potentially hostile suppliers? Then why pipe it half way across the continent? Why end the pipeline on the gulf coast if your intention is to use the oil domestically. Wouldn’t it be better to refine the oil in place and ship the refined products directly to their end users?

Or if it’s about jobs, build a new state of the art refinery in the upper Great Plains or upper Midwest that is specifically designed to refine tar sands crude? We get construction jobs in building the shortened pipeline and a new refinery. We get new refinery jobs in middle America. We get refined petroleum products in the mid-west far from the majority of our other sources of crude oil. That could reduce the risk of leaks in our existing petroleum pipeline infrastructure.

And we don’t have to buy rights of way across the country, threaten aquifers anywhere, and we can build a refinery where we need it most.

That seems like a win win…

So why does the oil need to get to refineries on the gulf? Because petroleum is a world market commodity. Prices are set in the world market. And it’s much easier to ship petroleum products from a port refinery that from say…South Dakota!


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1 thought on “The US State Department and the Keystone XL Pipeline

  1. Salient comment, Ed. Everything is a world commodity today. That’s why American freedoms are in such jeopardy and corporate owned politicians cannot be reasoned with. Example, we were once talking about getting off oil with alternate clean energy, now we’re talking about pipe lines and shale production. We were once talking about universal health care and lowering the cost, now we’re talking about protecting Social Security and Medicare and their “entitlements.”

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