One More Time, Why Do We Need Keystone?


Morphing into a political and economic lightning rod, the current Keystone pipeline plan’s fate was decided this week…Permit DENIED.  The decision was met with scathing criticisms from  Republicans and praise from the President’s supporters. While much of the debate bounded between the two dominant issues; job creation and environmental concerns, few have asked, “Why?” Why do we need another pipeline for Canadian crude?

According to its supporters the TransCanada Keystone XL pipeline will provide the US the security of importing oil from a friendly country. It will bring the US much needed oil supplies. It is privately-funded, costing taxpayers nothing. And, most importantly, it will inject our struggling economy with 20,000 new jobs.

The opposition’s arguments center predominantly on the environmental concerns. The pipeline represents a shot across the bow of the sustainable energy commitment to reduce our reliance on fossil fuels. There are additional concerns with the project’s route through large wetland ecosystems and wildlife migration areas. The pipeline also traverses the Ogallala Aquifer, one of the largest sources of fresh water in the world which, spans 8 states and supplies drinking and agricultural water to millions of people. A leak along the pipeline could pollute these water sources impacting a multitude of Americans and the country’s agricultural heartland. The leak concern is borne from a special permit the company applied for to use thinner than normal steel as a cost saving measure. This coupled with the pipeline’s high pressures, an industry-wide history of maintenance failures and human error related incidents and the route’s passage through an active seismic zone – which experienced a 4.3 earthquake in 2002 -  the opposition’s apprehension is understandable.

Now looking through these claims both sides do have merit. Ensuring an oil supply from a US-friendly country is a positive prospect given the troubled regions we import from regularly. The pipeline will also supply our hungry demand for oil. These reasons, however, appear to imply increased supplies from a stable country will reduce prices for US consumers. Unfortunately, irrespective of its source, oil will continue to be a commodity traded on a global, speculative market and prices here will still be subject to the same volatile activity we see now. The project is also touted as privately-funded, costing the US taxpayer nothing, the antithesis to the President’s Jobs Bill and additional stimulus for infrastructure development. What is not discussed are the inevitable subsidies and tax benefits TransCanada will receive from state and federal levels. As with American oil companies, whose subsidies cost millions of dollars each year, how much would the subsidies for the Keystone Pipeline cost in the end?

20,000 new US jobs!

Twenty thousand jobs…taken by itself, this estimate is enough, in this desperate economic climate, to propel this project forward…and fast. We need jobs and a bump of 20,000 will do so much for many hard working, unemployed Americans. Right? Absolutely. Unfortunately, there is a stubborn snag chafing at this optimistic figure. The estimate, from TransCanada itself, is based on counting each annually renewed, workers’ contract as a separate job, essentially counting each job two, three or four times depending on the project’s duration. The State Department’s estimate of 5,000-6,000 jobs may reflect a more accurate assessment.  Nonetheless, for a member of the long-term unemployed and their dependents being included in the project’s labor force the high-low estimates matter little compared to the potential of holding a job once more. But is the company unduly inflating the figures to garner public and political support, raising hopes of many living in dire straits?

AKPipeline SpillThe opposition’s arguments possess their own merits. The potential damage to wetland ecosystems and migratory wildlife habitats already undergoing pressure from a changing climate is deeply concerning. More disconcerting is the potential contamination of the Ogallala Aquifer which could conceivably impact millions across the the Midwestern US. The company has expressed assurances that all precautions are taken to ensure safety but as the Gulf oil spill illustrated corners are cut and it only takes one accident to cause lasting damage. These concerns gain credibility given recent leaks along the TransAlaskan Pipeline in 2006, 2010 and 2011 resulting in spills of several thousands barrels. These incidents were attributed to maintenance failures and do not include spills associated with sabotage. If the claim of the specially permitted, lower quality steel is true one must ask, where else on the project is quality sacrificed and how will this increase the risk of spills.

Why do we need another pipeline?

Throughout the debate many questions have been asked. Numerous issues raised on both sides yet no one is asking, “Do we really need another pipeline?” The supporters of the pipeline raised the benefit of a grand supply of oil from a friendly neighbor. No more worries about hostile regions holding the US hostage to our demands. While this sounds like the perfect solution, it implies we are not already importing oil from Canada. We are, in fact, the largest importer of oil from Canada which we access through existing pipelines into the US. This oil flows into the 59 million barrel storage facility in Cushing, Oklahoma, owned and operated  by New York Mercantile Exchange. This is not the interesting part, however. The interesting, or intriguing part is that these large facilities are full of oil, so full the area is currently going through a massive expansion to significantly increase its storage capacity. With this main oil hub already bursting at its seams, why is the public perception one of desperation? Why is this stored oil not being made available? And if the flow of crude is at such a rate the primary oil storage hub is in need of expansion then why do we need another pipeline? As it turns out the answer to those questions and the real issue revolves around moving the oil out of Cushing to the refineries along the Gulf Coast.

Given this not so unimpressive revelation – the information was easy to find – a more directed question begs to be answered. If the US is already bringing in more oil than it can handle then why is the focus placed on increasing the supply rather than more effectively dealing with our current overabundance?

The President’s decision on this issue centered around, whether the Keystone XL Pipeline was in the national interest or not. Given the  arguments from both sides, was it worth the risks to move forward with the project in its current form? Is it in the nations interest or is it more in the interest of a few large oil companies? And based on the surpluses we currently have, why place human and environmental health at risk with an apparently unnecessary endeavor? In the end, the political volleying has to give way, find substantive answers to these questions and acknowledge the realities that perhaps the money, time and risk can be better managed by focusing resources where they are actually needed.

Additional Links of Note:

Mike Klink: Keystone XL pipeline not safe

Former Keystone Pipeline Inspector Says Construction Shortcuts Are Tied To Leaks

Feds recorded 100 pipeline spills and accidents in the last two years [Including other TransCanada pipelines]

Natural gas pipeline explodes in northern Ontario

Explosion shuts natural gas pipeline in Wyo

 

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12 Responses to “One More Time, Why Do We Need Keystone?”

  1. You’ve shed alot more light on both sides of the issue that, as we know, does not come out when one side is bashing the other. Good information for one who would not have researched the pros and cons that should be make the news.

  2. As an active ecology advocate since the first Earth Day, I try to speak a little less aggressively on topics like this than is my wont. Anyone visiting either of the blogs I currently edit will chuckle over that. But, you asked some questions, including a couple which demonstrate a lack of engineering knowledge.

    As soon as I saw thinner steel and higher pressures – that means one thing. I checked sites for the operating engineers who would be installing the pipe and, sure enough, the project is designed for high-strength steel. That can be made [1] thinner – which is a benefit for installers because it is lighter – and [2] it will handle higher pressures – useful for faster flow for light grades of crude or adequate flow for thicker stuff. Which is what I believe most of the tar sands crude is. This ain’t Nigeria. It does cost more per linear foot.

    You presume the pipeline companies want to layout the bucks for a pipeline for what reason? You seem convinced the capacity coming into Cushing needn’t be increased. In fact, the companies are targeting doubling capacity at a minimum.

    I actually know a bit about aquifers – though most of what I know about the Ogalala is that midwestern farmers all the way down to Texas are draining it faster than it is being replenished. And virtually no one uses it for drinking water. Most water for potable systems comes from shallower aquifers. The Ogalala is primarily sucked for pivot irrigation. I go through the same discussions forever in my own neck of the prairie – living at the terminus of the major drinking water aquifer in Santa Fe county.

    The fate of the Keystone project has not been been decided. Delayed. The crap tried by Republicans to ram it through backfired. Though alternative routes avoiding the Sand Hills are proposed, that requires new EIS. Obama has ‘em by the short and curlies.

    Trying to stop pipeline projects because folks oppose perpetuation of hydrocarbon use is counterproductive if – for no other reason – it requires strategic decisions at least a couple steps away from the key elements of decision making. You know what American voter are like. Think they’ll catch on and support that? GM couldn’t get ‘em to buy 7,000 Volts, last year.

    One of the best aspects of the project for opponents to use for focus just might be the proposed end use. Understand that the refined distillates from Keystone XL are to be exported and sold – mostly to India and China. No reduction in US consumption from this project at all. No reduction in price.

    We’re already on the way to $4/gal gasoline by Memorial Day – as a floor price – and $5 possible on the coasts. Which pisses me off because I was hoping prices on EV’s would start to diminish to where we could afford one. Now, demand will likely increase. :)

    Sorry to run on so.

    • Eideard,

      Thank you for your comments. No problem running on. I do it often myself. I appreciate the points and criticisms made in your response. Having said that I’d like to offer a few rebuttals.

      The “thinner steel” issue was presented as one of the claims put forth by the opposition. It was one I had not initially heard about before I began researching each sides’ views. As I read a bit about the “thinner steel” I interpreted it not as a physical process of thinning out the steel to increase its length and save the company money but more of an illustration of potential quality control issues. I took it to mean that there may be issues of lower grade materials. This is not to dismiss your own information of high-strength, light-weight steel better to handle high pressures. If so…great! Also if you would, note that in that portion of my post I stated, “If the claims of the specially permitted, lower quality steel is true…” acknowledging, potential inaccuracies in that claim. BUT, if there is evidence that the company does cut cost corners sacrificing quality in some areas, one must be skeptical about other areas.

      Now, you are right, I do not have much specific knowledge of engineering…my background is in environmental science. But there is one civil engineer and ex-TransCanada contracted inspector who does have concerns with the company’s construction practices and material quality standards. The information and concerns raised are worth considering.

      Mike Klink: Keystone XL pipeline not safe
      http://journalstar.com/news/opinion/editorial/columnists/mike-klink-keystone-xl-pipeline-not-safe/article_4b713d36-42fc-5065-a370-f7b371cb1ece.html

      Former Keystone Pipeline Inspector Says Construction Shortcuts Are Tied To Leaks
      http://www.huffingtonpost.com/2011/09/28/keystone-pipeline-construction-leaks_n_984662.html

      This skepticism and concern increases when incidents involving other TransCanada projects come to light;
      Feds recorded 100 pipeline spills and accidents in the last two years
      http://www.vancouversun.com/business/Feds+recorded+pipeline+spills+accidents+last+years/5053005/story.html

      UPDATE 2-Natural gas pipeline explodes in northern Ontario
      http://www.reuters.com/article/2011/02/20/canada-pipeline-explosion-idUSN2016340820110220

      Explosion shuts natural gas pipeline in Wyo
      http://www.wyomingbusinessreport.com/article.asp?id=58848

      It’s worth noting that the last two here were ruptures in pipelines themselves. Now these instances may be statistically insignificant compared to the total length of the pipelines running throughout Canada and the US but they do lend validity to the oppositions’ claims and reduces credibility of the safety proclamations made by the company, at least a bit.

      “You seem convinced the capacity coming into Cushing needn’t be increased. In fact, the companies are targeting doubling capacity at a minimum.”

      In this portion I was arguing that the issues with Cushing were that they were unable to meet the incoming capacity they have already coming in. As I referenced in the piece, the problems lie in getting the crude OUT of Cushing. Would it not be more effective to solve or remedy that problem before they start thinking about bringing substantially more in? Figure out how to get the oil flowing out of the existing facilities first THEN decided if they are able to handle increased capacities. I’ve read that Canada is frustrated with that particular problem now as well.

      The Ogallala Aquifer… I’m familiar with the draw down vs recharge issues as well. But that doesn’t diminish its importance, its conservation or contamination related concerns. I’d agree that a significant amount of it is indeed used for agricultural use illustrating its importance and need to protect it as a resource. As far as the use of it as a drinking water source goes, I do have to disagree a bit with your assertion that few use it for that purpose. According to the USGS’s study of the High Plains Aquifer, of which the Ogallala representing 80%, 82% of the 2.3 million people living within its boundaries do utilize it as a source for drinking water making impacts from any pollutants still a significant concern.
      http://co.water.usgs.gov/nawqa/hpgw/factsheets/DENNEHYFS1.html

      Now see…you’ve made me run on and on too :-) Like I said, I did appreciate your comments and criticisms, they keep me on my toes. They made me look a bit deeper into the issues and the information surrounding them. I think the answers to the questions presented here are still worthy of pursuit.

    • Concerning the Ogallala–if the environmentalists were so concerned about it, they would be occupying farms in the Great Plains as farm runoff is contaminating the aquifer with pesticides, herbicides, and fertilizers to name a few. This isn’t about the aquifer ultimately or even about science. It is more about politics and the corrosive influence it has on everything it touches.

      • Sure, I’ll accept that logic. It’s similiar with any hot-button issue in this country. Some get more attention than others. Is it right allowing clean water act exemptions for a lot of agricultural operations? No, it isn’t. But we all know what the reactions from Republicans would be if agricultural run-off was focused on at this time. Would be worth the risk placing one more potential source of contamination (the pipeline) into that area? At this time…No. Given many reasons I’ve outlayed in my post and those discussed in Annabell’s comment it is not necessarily worth that risk because it is not all together valid that we need another pipeline. I am making the case here that there are many questions to consider that don’t seem to be at this point. Is it truly in our national interest? It doesn’t seem so at this time.

  3. Answer: Affordable energy, sustainable jobs, long-term economic prosperity.

    • Thanks for responding! Just a couple of things though…

      “Affordable energy,”
      How would it be affordable energy when oil will continue to be a highly volatile commodity traded on a speculative market?

      “sustainable jobs,”
      How would they be sustainable? It’s a temporary project lasting 2-3 years and we don’t know yet what requirements TransCanada will have on them to hire American workers.

      “long-term economic prosperity.”
      Once again, I have to ask how? We are already Canada’s #1 importer of their oil and our economic prosperity before the recession or after was/will be determined by it.

      If you have more information that would support this answer I’d be interested in seeing it. If it’s true, that’d be great but as it sits now it’s difficult to imagine one project could provide all that.

  4. I love that you hit on two of the main questions I ask regarding the pipeline – the jobs number, and the stagnant demand for oil.

    Depending on whose numbers you look at, the number of jobs ranges from 6k up to 120k. These estimates are quite different and take into account auxiliary jobs, those supporting the pipeline workers. The TransCanada estimates effectively count each worker twice – once for each year. The GOP estimates have stated the jobs would create towns and operating centers that would be supportive of the pipeline. These numbers take a lot of liberty in what is created. A large number of the jobs fall under the category of “bars, and bar personnel”, referring to bartenders and waitresses.

    The closer number, according to the Washington Post fact checker, is 6-10k jobs, and those would be temporary during the construction of the new pipeline. The number would decline to a maintenance crew of maybe 500 people, by TransCanada’s own accounting, once the pipeline is operational.

    The second question, regarding the stagnant demand, is why do we need to stockpile more oil? We have increased our strategic reserves during the recession, despite higher gas prices. We have more supply than can be sold during this recession. Gas prices are still high, despite the subsidies and the presence of “supply side” economics.

    Our main uses of oil – mostly manufacturing – are ramped down because demand is low. People are driving less as money becomes scarce, or are buying cars with better fuel economy standards. The idea that we need more oil pumped into the nation, while simultaneously talking about reducing our demand on oil, is a backwards statement.

    Either we want “energy independence”, which really means not using any oil – as all oil is sold on the exchange market, or directly between nationally run organization – or we want cheap oil. For a nation that is falling behind the world in terms of energy efficiency and green technology, we are putting ourselves at the mercy of the oil barrens, rather than thinking about our long term solvency. This pipeline, while it may increase a few temporary jobs and provide more oil if the economy was that of 2006, not 2012, it appears to be old thinking on energy.

    We’re setting ourselves up for a terrible situation, and the irony is, if we decided to focus on new technology to reduce our need for oil, we could generate 10 to 20 times more permanent jobs than this pipeline will in temporary jobs (number comes from an EPA estimate in green technology funding proposals in 2010).

    I’m not an “earth hugging hippie” type Liberal. I’m the practical liberal who thinks about things in context, and looks at how things interconnect. If you’re serious about creating jobs, open up funding again for green technology, and spur the economy and energy reduction. This is really a national security issue, when you get to the root of what oil does to a nation, and how reliant we are to the crude from nations we’re less than happy with on a diplomatic level.

    • Annabel,

      Thanks, glad you appreciated the direction I went with this post. It just seemed like these aspects were not being discussed at length elsewhere.

      “A large number of the jobs fall under the category of “bars, and bar personnel”, referring to bartenders and waitresses. ”

      I found this part interesting, well I found much of the job creation assessments interesting, but I came across one report that also included dance studies and a few other businesses that were a very long stretch to include in the pipeline job creation numbers.

      “Why pump in more when we’re dealing with surpluses and low demand”

      That’s a question that needs to be answered too. If we’re moving towards a lower use/demand state through development of cleaner energies, increased efficiency vehicles, etc then why focus on large projects that are not in line with that direction?

      “we are putting ourselves at the mercy of the oil barrens, rather than thinking about our long term solvency. ”

      That is really a major part of the problem…we’re not able to, politically at least, to form long-term plans or direction for the country due to the high levels of partisanship. And even if a plan is put into effect it’s like to change with subsequent administrations and/or power shifts.

      “We’re setting ourselves up for a terrible situation, and the irony is, if we decided to focus on new technology to reduce our need for oil, we could generate 10 to 20 times more permanent jobs than this pipeline will in temporary jobs ”

      I agree. So very true.

      Thanks again for your comments and intelligent discussion.

  5. Many thanks for liking my most recent post. Your detailed scrutiny of the Keystone XL Pipeline saga is fascinating – especially when read in conjunction with the view point of an equally frustrated Canadian environmentalist (see comments by jpgreenword.

    What I mean is this: Canada’s current government wants to be an energy super power and sell fossil fuels to any and everybody. This is ironic because, it is normally poor countries that prostitute themselves in this way by producing raw materials but manufacturing nothing. Meanwhile, the USA is happy to oblige because it avoids having to by things from nasty Iranians and medieval Arabs. Furthermore, although you do an excellent job of detailing all the very serious risks associated with leaks (which should not be ignored), the reason the pipeline should not be built is the same reason the tar sands should not be exploited: Burning all the Earth’s fossil fuels is not a survivable option. This latter point is of course the one about which all politicians are in denial; and this is the scale of our problem.

    Thanks again for making yourself known to me, your CV sounds like it has some parallels with mine, so I have decided to follow your blog (as I might actually learn something about US politics – although Climate Denial Crock of the Week is also quite good for helping me do this).

  6. You know, of course, that the Keystone pipeline is already in operation from Alberta to Cushing. There are, in fact, about 2.5 million miles of oil and gas pipeline across running all about the US. I do not see many rallies in support of dismantling that network. I believe there are 300,000 miles of oil pipeline alone, but I think that includes other hazardous liquids as well.
    What is at issue is the approval of the Keystone XL pipeline. We know that few care about the actual pipeline itself. Martin, of course, has the consistent view that fossil fuels are bad, and we should oppose anything that would support their use especially the oil sands which require additional CO2 output just to get them out of the ground. I respect his view due do that consistency, although, of course, I oppose it. Delaying the pipeline will not prevent one single drop of oil sands from being extracted. In fact, it will probably only cause additional CO2 to be emitted in less efficient transport methods. Martin would oppose that as well, hence the consistent viewpoint.
    Why do we “need” another pipeline? The mere fact that a private business wants to build one is good enough for me. Why do we need another Dunkin Donuts on the corner? Because someone feels strongly enough that there is enough of a market for coffee and donuts in this area that they are willing to put much at risk to build a Dunkin Donuts. That guy that wants to work hard for his family doesn’t need me telling him that his coffee vision is wrong.
    The US has become a net exporter of refined petroleum products. The refineries are in Texas, so companies in the products export business have a desire for crude oil. That is driving the demand.

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