Analysis

Winnipeg Free Press - PRINT EDITION

Time for Obama to approve the XL pipeline

By: Bloomberg View

Posted: 11/15/2012 1:00 AM | Comments: 0

Environmentalists who are against building the Keystone XL oil pipeline from Alberta to the U.S. Gulf Coast, have called a march on Washington this weekend to demand President Barack Obama again reject it.

This time, it is the opponents the president should turn down. He should move to get the 2,736-kilometre, $7-billion underground pipeline approved within the next couple of months.

When Obama denied a permit for Keystone XL in January, it was because the builder, TransCanada Corp., needed to revise the route to avoid Nebraska's Sandhills region overlying the Ogallala Aquifer.

Rather than wait for this essential revision, Republicans in Congress forced the president to make a quick decision on TransCanada's entire application in the hope his rejecting it would hurt him in the election.

Since then, the company has rerouted the pipeline and in May submitted a new application to the State Department, which is involved because the pipeline would cross the U.S.-Canada border. Environmental studies have been updated accordingly on what was already one of the most researched infrastructure projects in U.S. history. Now Obama has won re-election, removing any need to pretend the pipeline's surpassing value to U.S. energy security is undermined by its environmental risks.

The pipeline itself would be at least as safe as any of the thousands of kilometres of pipelines that carry crude oil, liquefied petroleum gases and natural gas across the U.S. But then opponents don't really object to the pipeline itself. What they want is to slow or stop altogether exploitation of the Athabascan oilsands in Alberta.

It's true that extracting and refining bitumen from the sticky black sands emits significantly more carbon dioxide and other greenhouse gases than does drilling and processing ordinary oil. Yet in the well-to-wheels life cycle of the oil, its emissions are only about 17 per cent greater (or even less) because most of oil's emissions come from use. What's more, oilsands producers are working to reduce per-barrel emissions, for example by generating electricity as a byproduct of oil extraction.

In September, Royal Dutch Shell announced it would begin carbon capture and storage at the oilsands by 2015.

The environmental side-effects are real, in other words, but acceptable with careful monitoring and continued efforts to minimize them. Consider that Canada is the United States' biggest and most reliable seller of crude and that the Athabascan oilsands are the third-largest proven oil reserves on Earth, already producing about two million barrels a day and expected to supply 3.3 million by 2020. That's enough to help make North America largely energy-independent.

The Keystone XL pipeline would carry 700,000 barrels of oil a day to refineries in Oklahoma and Texas. Not building it would keep the fuel from reaching the U.S., but it wouldn't shut down oilsands extraction altogether.

TransCanada can be expected to push back hard against efforts in Canada to block the construction of the so-called Gateway Pipeline, which would carry bitumen from the oilsands west to British Columbia, where it could be loaded on tanker ships bound for China.

The bitumen is coming out of the ground one way or another. Obama should ensure it goes to the U.S. and not the Far East. The administration has long said it would make a decision by the first quarter of 2013. We see no reason it shouldn't do so before the end of the year.

-- Bloomberg News

Republished from the Winnipeg Free Press print edition November 15, 2012 A16

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