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Keystone XL pipeline: Myths v. Reality

January 18th, 2012

By Barbara Kessler
Green Right Now

The Obama Administration’s rejection of the Keystone XL pipeline today earned the president a fierce tongue-lashing from Republican foes in the House of Representatives.

The president, faced with a 60-day deadline imposed by Republicans in the House and passed as a poison pill with the payroll tax cut, gave the pipeline thumbs down. But he left the door open for a reapplication by pipeline owner TransCanada.

The deadline seemed aimed to either force approval of the pipeline, supported by the oil and gas industry and many in Congress, or force Obama to reject the pipeline and face criticism for turning down the jobs it would bring.

Obama had put the project on hold in November, saying the administration would take until Jan. 2013 to review the health impacts of the pipeline and await a new safer route through Nebraska, requested by lawmakers in that state.

House Speaker John Boehner, who helped engineer the game of chicken over Keystone, was predictably incensed today:

“President Obama is destroying tens of thousands of American jobs and shipping American energy security to the Chinese.  There’s really just no other way to put it.”

Except there is another way to put it.

The jobs promised by the pipeline have been inflated by its proponents, and the safety of the pipeline has not been sufficiently studied, as the State Department noted today.

So let’s examine the myths of Keystone XL:

Myth 1: The Keystone pipeline will create 20,000 jobs in the U.S.

A Cornell University review of the pipeline operator’s application to the State Department found that it estimates pipeline construction would create 2,500 to 4,600 jobs. This is a significant number of jobs, but they would be transitory.

Pipeline operator TransCanada says the project would create several thousand more manufacturing jobs, but the Cornell analysis found some of these were hard to track and some were not even in the US. Parts for the pipeline are coming from all over the world, according to the report.

The inflow of oil could produce jobs and income at refineries in Texas, but it has so far been impossible to extract a reliable number on that count. The pipeline also will produce tax revenues in the states it would cross — Montana, South Dakota, Nebraska, Kansas, Oklahoma and Texas — though Kansas inexplicably offered TransCanada a 10-year tax exemption. (Hello Kansas, the pipeline needs you. Check a map.)

Myth 2: If the US does not allow the pipeline to travel from Alberta to refineries in Houston, TransCanada Corp. will sell the oil to the Chinese.

This possibility is raised in early assessments of the pipeline’s impact. But there is no promise that this oil, if it’s refined in Houston, will stay in the US.  Oil is a global commodity, sold on world markets. Corporations selling it pursue profits, they don’t designate favorite recipients. This isn’t your uncle’s estate planning meeting. Some of the oil, and also some of the refinery jobs, will benefit the US. But there’s really no telling how much. Could the tar sands oil being mined in Canada be sold to the Chinese? Some of it already is, and there’s no question that Asia has an appetite for more.

TransCanada Corp. CEO Russ Girling also raised the possibility — left open by the Obama Administration — that the company could put in a new request for Keystone XL, more or less as planned, but with additional review and a new route through Nebraska. “This outcome is one of the scenarios we anticipated. While we are disappointed, TransCanada remains fully committed to the construction of Keystone XL,” Girling told the National Post.

Myth 3: The tar sands oil carried by the pipeline is no different than any other oil.

Environmentalists have been concerned that this pipeline will carry a special type of oil, known as bitumen, which is scraped from the tar sands pits, and then mixed with chemicals to make it more fluid. It’s turned into a diluent called “dilbit.” No one can say exactly what this toxic brew will do in the environment; another TransCanada pipeline in the US has sprung several leaks since it opened in 2010, and from that we know that this type of oil sinks in rivers and cannot be skimmed off the surface.

It is a fact, however, that tar sands diluent is more corrosive than simple crude oil. That makes spills from this type of pipeline potentially more dangerous. It’s why Nebraskans balked when they realized the planned route for Keystone XL would carry it through the delicate Sandhills region, where the Ogallala Aquifer is close to the surface. The Ogallala, the biggest single aquifer in the US, supplies 80 percent of the state’s residents with water and vast acreages of heartland farms from South Dakota to Texas. The stakes are higher here. The aquifer is already being depleted.

In the game of fuel, food and water, you might hope that water would trump everything.

Copyright © 2012 Green Right Now | Distributed by GRN Network


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