Just what are your intentions with that crude oil? It seems to me that Keystone XL is submitted to a scrutiny never before witnessed for a pipeline project. Are pipeline projects always judged quite so closely on; a) the environmental credentials of the product that they transport; b) the projected eventual destination of any refined product following delivery via the pipeline; c) the projected use of these refined fuels in an imagined future; d) the carbon emissions policies of the countries the pipeline crosses, plus a few that it doesn’t; e) the political motives of the President of one of the countries through which it passes; or in fact, on any other issue that should really be dealt with in a wider conversation about fossil fuels useage, rather than transport?
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I may be aligning my argument with folks who ask: do computer games cause increased violence in teens? but here goes: do steel pipelines change the rate at which oil and gas is used, and the rate at which carbon emissions are released?
Last month, the US Senate shelved a bill that would have approved the construction of the extension to the Keystone pipeline. The Bill was passed in the House of Representatives first, but fell one vote short in the Senate, despite a lot of lobbying. President Obama may have used his veto on the project anyway, but this was the closest we’ve got to a yes on KXL. Will the Bill pass next time around? With the now Republican-controlled Senate, I’d imagine that a Keystone vote will be on the cards for early in 2015 and that it will succeed at getting the votes it needs to pass.
For now, though, we wait. Another TransCanada pipeline facing tough scrutiny is the Energy East line. The Canadian provinces of Ontario and Quebec have outlined a raft of new conditions for Energy East in the wake of the KXL bill failure. The most contentious of the conditions put forward by Ontario’s Kathleen Wynne and Quebec’s Philippe Couillard was that TransCanada’s proposal would need to account for the pipeline’s greenhouse gas emissions. In response to the new strictures, the provinces of Alberta and Saskatchewan have fired back. Alberta Premier Jim Prentice and Saskatchewan Premier Brad Wall have something to say about this practice of using emissions as a roadblock. “Clearly, we’re talking about the emissions associated with carrying oil from this mode of transport,” Alberta Premier Jim Prentice said. “We’re not talking about an inquiry about the oilsands or any other field where this oil would come from. The market will carry this oil through to market, it will either go by pipeline or by rail or other modes of transport.”
Here lies the crux of the argument: the KXL and the Energy East lines are proposed as conduit lines for an oilsands product that is already being produced. KXL will deliver oilsands to refineries on the US Gulf coast that are ready and waiting for the heavy crude (and wanting in capacity in the meantime). Energy East will send crude from Alberta and Saskatchewan to refineries in Eastern Canada. Alberta’s resource needs a market and it will find one. If KXL isn’t built and Energy East is, crude from Energy East may well be loaded onto tankers on Canada’s east coast and shipped down to the Gulf, as well as to world markets beyond.
We must consider the possibility that President Obama will ‘make a deal’ for KXL next year, using the approval of the project as leverage for another piece of legislation that he wants pushed through the system. Back in simpler times, when KXL was first proposed, it was always about feeding a crucial supply of crude to ‘the lower 48 states’ but has that now changed? What makes the pipeline viable again in the eyes of US leadership? Amid the swirl of falling oil prices, rising project costs, increased use of rail transport, Middle East tensions, Russian aggressions, the US gas boom and global climate wrangling (especially in Asia, a potential oilsands market) where does that leave KXL?
From all the team at World Pipelines – we wish you the very best in the holiday season! See you next year, for progress or postponements alike.