The Keystone XL Pipeline project has been under review for more than two years now, and has already secured approval from the Alberta provincial government and the Canadian national government. The pipeline, originating near Hardesty, Alberta, and terminating on the US Gulf Coast, would carry 500,000 barrels/day of synthetic crude from the oil sands developments to the US.
The pipeline would be built by TransCanada Corp. (NYSE: TRP) and ConocoPhillips Corp. (NYSE: COP), but would benefit every company with a stake in the oil sands, including Suncor Energy Inc. (NYSE: SU), Total SA (NYSE: TOT), Royal Dutch Shell plc (NYSE: RDS-A), Exxon Mobil Corp. (NYSE: XOM), and BP plc (NYSE: BP).
US approval for the pipeline has been delegated by the President to the State Department, which was supposed to conclude its review earlier this year. Two State Department drafts have been found wanting by the US EPA, and a new draft is in progress.
While there is a substantial minority opposed to the pipeline, its construction was believed to have been nearly a foregone conclusion. The main opposition to the pipeline is not its routing through six US states (although there is some growing opposition there), but to the environmental damage caused by mining the oil sands in the first place. When the US EPA relayed its concerns to Alberta, it was told to mind its own business.
Now, a group of activists have called for demonstrations this summer in Washington, D.C., to protest the pipeline. Their hope is to stop construction of the Keystone XL pipeline in an effort to stop the massive pollution attributed to the mining operation itself.
Those who favor the pipeline say that it will end US dependence on Middle East oil. That’s foolish. Those who oppose the pipeline call it the biggest carbon emissions threat on the planet. That’s at least arguable.
What’s not arguable is that there are very few issues left around which to galvanize the environmental movement. The Congress has shown itself to be unwilling or unable to make a commitment on the pipeline. Those who favor more exploration for oil can stymie any attempt to impose stricter regulation and review on fossil fuel energy projects.
Those who want to restrict exploration have been reduced to hoping for the best. They want to change that now, by forcing the State Department and the President to reject the necessary approval for the Keystone XL pipeline. This summer’s protest are being held to attract public attention to the issue, but the protest seems like nothing so much as a last-ditch effort to get the environmental movement back on track.
If Keystone XL is not built, Canada will figure out some other way to get that oil to market. It may be by truck, which is far more costly and environmentally harmful than a pipeline. It may be by a pipeline headed off either to the east or west coast for eventual shipment to the Gulf or elsewhere.
All this is not to say that the extraction process is environmentally harmless. But mining the oil sands could be achieved with more attention paid to the environmental impacts. Of course that would cost money, money that would eventually be paid by consumers.
In the long run, the high cost of the oil sands, and oil in general, will lead to new fuels for transportation. But without a national policy that offers guidelines to get there, we’re going to be fighting battles like this one for many years to come.