US & Canada

Keystone XL pipeline: Why is it so disputed?

A sign reading Stop the Transcanada Pipeline appeared in Bradshaw, Nebraska, on 11 March 2013 Image copyright AP

US President Barack Obama has announced he is rejecting an application to build the Keystone XL pipeline. Why is the issue so hotly disputed.

What is the Keystone XL?

The Keystone XL pipeline is a proposed 1,179-mile (1,897km) pipe that would run from the oil sands in Alberta, Canada, to Steele City, Nebraska, where it could join an existing pipe. It could carry 830,000 barrels of oil each day.

The proposed XL pipeline has the same origin and destination as an operational pipe, also called Keystone - granted presidential permit in 2008 by President George W Bush - but takes a more direct route. The XL pipeline would allow for an increased supply of oil from Canada.

A section running south from Cushing in Oklahoma to the Gulf opened in January 2014. At the coast there are additional refineries and ports from which the oil can be exported.

The pipeline would be a privately financed project, with the cost of construction shared between TransCanada, an energy company based in Calgary, Alberta, and other oil shippers. US-produced oil, albeit less than Canadian, would also be transported by Keystone XL.

Why do the US and Canada want this project?

Canada already sends 550,000 barrels of oil per day to the US via the existing Keystone Pipeline. The oil fields in Alberta are landlocked and as they are further developed, require means of access to international markets. Many of North America's oil refineries are based in the Gulf Coast, and industry groups on both sides of the border want to benefit.

An increased supply of oil from Canada would mean a decreased dependency on the Middle Eastern market. According to market principles, the more oil in the market, the lower the price for consumers.

The infrastructure project would create 42,000 jobs over a two-year construction period, the US State Department estimates - 35 of which would remain after the pipeline is built.

What's been approved?

The Canadian National Energy Board approved the Keystone XL pipeline in March 2010. Because the XL pipeline crosses the US/Canada border, the project requires presidential permit prior to construction.

It was expected that Mr Obama would approve the project at that time, but Congress demanded action within 60 days, and the US leader turned it down citing an inadequate environmental assessment.

In the meantime, the Environmental Protection Agency (EPA) weighed in on the project, encouraging Mr Obama not to approve the pipeline. EPA regulations themselves wouldn't block construction, but litigators could use the EPA to stop construction, even after it is approved by the president.

In February 2015, the newly Republican-led Congress voted to begin construction immediately, but Mr Obama vetoed the bill, saying it undermined the necessary review process.

But shortly before Mr Obama rejected the application, the firm hoping to build the pipe, TransCanada asked the US government to put its review of the project on hold.

Image copyright Reuters

Why is there opposition?

The Keystone XL pipeline has become a controversial project for a number of reasons.

While the US State Department initially said in 2011 Keystone XL would not have significant adverse effects on the environment, that same year the same department determined TransCanada would need to assess alternative routes in Nebraska because the Sandhills region is a fragile ecosystem. Beyond the risks of spillage, the pipeline means a commitment to develop Alberta's oil sands.

Image copyright Reuters
Image caption The Keystone pipeline has long drawn the ire of environmentalists

Despite the recent push to find renewable sources of energy and move away from fossil fuels, the amount of oil produced in northern Alberta is projected to double by 2030.

It's argued by some that by developing the oil sands, fossil fuels will be readily available and the trend toward warming of the atmosphere won't be curbed.

Mr Obama's decision to approve or refuse the pipeline is therefore held up as symbolic of America's energy future.

In the here and now, more energy is required to extract oil from the Alberta oil sands than in traditional drilling, and Environment Canada says it has found industry chemicals seeping into ground water and the Athabasca River.

This risk to local communities is one of the reasons many have opposed the project. A group called the Cowboy-Indian Alliance marched on the US Capitol earlier this year, citing destruction of local environments.

First Nations groups in Northern Alberta have even gone so far as to sue the provincial and federal government for damages from 15 years of oil sands development they were not consulted on, including treaty-guaranteed rights to hunt, trap and fish on traditional lands.

Image copyright Reuters
Image caption Former Canadian Prime Minister Stephen Harper fully supported the project

Why are people so passionate about this particular project?

Environmentalists adopted Keystone XL because it is easy to organise around, Politico's Energy Reporter, Elana Schor, told MSNBC on Tuesday. The dangers of pollution may seem abstract to many, and it's tough to drive people into the streets over EPA carbon rules.

"But Keystone, a piece of steel, something you can picture farmers having to deal with it, it's much more evocative and emotional for environmentalists, and they've done a lot of work to elevate it as a symbol."

On the Republican side, Senate Majority Leader McConnell has said Keystone XL is just common sense.

"It's a shovel-ready jobs project that would help thousands of Americans find work," he said. "It would increase our supply of North American energy. And it would do all that with minimal net climate impact.

"That's why the American people support it," he added. "That's why Republicans support it."

Why did Obama reject it?

The president said it would not have:

  • lowered petrol prices
  • created long-term jobs
  • affected energy dependence

It would not have a significant impact on the US economy, he said, although he added it would not have had the catastrophic environmental consequences that some had warned of.

He said the pipeline had taken on a "overinflated role" in US debate over climate change.

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