Released October 19, 2011 | SUGAR LAND
en
Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--The U.S. State Department is finding its diplomatic skills put to the test by a hotly contested, international crude-oil pipeline proposal. Because the $7 billion, 1,700-mile Keystone Gulf Coast Expansion Project (Keystone XL) crude oil pipeline would cross the U.S.-Canada border, the State Department is the lead U.S. agency in determining whether construction of the pipeline should move forward. A final decision from the department is expected by the end of the year.
Keystone's first two phases, valued at $6 billion, are already complete and operating. However, phases 3 and 4, which would bring tar sands-derived crude oil from Hardisty, Alberta, to Cushing, Oklahoma, and ultimately to oil refiners in Texas, are being hotly debated. The expansion project, proposed by TransCanada Corporation (NYSE:TRP) (Calgary, Alberta), has the strong support of the Canadian government. Unions, oil companies and the U.S. Chamber of Commerce also support the expansion.
But environmental organizations, a few movie stars, some elected officials, farmers and ranchers, and dozens of Democratic members of Congress fiercely oppose the expansion. In recent weeks, more than 1,000 people were arrested protesting the project in front of the White House. The U.S. Environmental Protection Agency (EPA) also opposed the project, noting the potential environmental risk of a spill, as well as the energy-intensive process needed to produce refinable crude oil from the tar sands.
TransCanada says Keystone will play "an important role in linking a secure and growing supply of Canadian crude oil with the largest refining markets in the United States, significantly improving North American security supply." In August 2011, the State Department issued a final environmental impact statement (EIS) supporting the project. "The Final Environmental Impact Statement reaffirms the findings of the two previous environmental impact statements that the Keystone XL pipeline will have no significant impact on the environment," Russ Girling, TransCanada's president and chief executive officer, said in a statement at the time. The final EIS "continues to demonstrate the focus on safety and the environment that has gone into the development of this critical North American pipeline."
The State Department consulted with 10 other federal agencies in rendering its final EIS. It concluded that as long as the project was operated according to federal rules, it would have a minimal environmental impact on the area it would traverse. Opponents disagreed, claiming the final EIS did not adequately take into account the potential impacts of a major spill. The State Department is expected to decide in the coming weeks whether the project is in the national interest of the U.S.
As lobbying for and against the pipeline expansion heated up in recent weeks, TransCanada's Girling visited Washington, D.C., in early October to solidify support for the expansion project and try to convince some fence-sitters that it deserves their support. "The United States consumes 15 million barrels of crude oil per day and imports 11 million barrels per day," he said in an Oct. 7 statement. "Under any scenario, the need for crude oil as the primary transportation fuel will remain for decades. The United States has a choice of receiving more oil from its most secure, most stable and most reliable trade partner, Canada, or to continue to import from less stable locations that do not share the interest and values of Americans."
Reflecting on high U.S. unemployment and two weeks of public hearings in U.S. cities, Girling continued, "thousands of working men and women spoke out in support of the project. One in particular captured what this pipeline means to them: 'This pipeline is not just a pipeline--to me, it's a lifeline'."
"This project represents a collision of multiple national interests and multiple political interests," P.J. Crowley, a spokesman for the State Department during part of the review process, told The Washington Post. "Energy security and environment normally go together, but in this case they are somewhat at odds. All have come together to make this a bigger deal than it might have appeared at first blush."
In October 2010, Secretary of State Hillary Clinton reportedly told an audience at San Francisco's Commonwealth Club that she and others in the administration were "inclined" to give TransCanada the permit, adding, "We're either going to be dependent on dirty oil from the Gulf or dirty oil from Canada," according to the Post.
Earlier this month, public meetings on the project drew large and vocal crowds in Montana, South Dakota, Nebraska, Kansas, Oklahoma, Texas and Washington, D.C. Various constituencies, including Tea Party activists, farmers, ranchers, property owners and environmentalists have fiercely opposed the pipeline, citing various reasons. Nebraska's Republican Governor Dave Heineman opposed the project, saying it could contaminate the Ogallala aquifer, the major source of water for his state.
View Plant Profile - 1083849 1080449 1081306 1071029 1083783 1081192
View Project Reports - 55000488 47000438 34000908 32000279 8001651 1012648
Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
Keystone's first two phases, valued at $6 billion, are already complete and operating. However, phases 3 and 4, which would bring tar sands-derived crude oil from Hardisty, Alberta, to Cushing, Oklahoma, and ultimately to oil refiners in Texas, are being hotly debated. The expansion project, proposed by TransCanada Corporation (NYSE:TRP) (Calgary, Alberta), has the strong support of the Canadian government. Unions, oil companies and the U.S. Chamber of Commerce also support the expansion.
But environmental organizations, a few movie stars, some elected officials, farmers and ranchers, and dozens of Democratic members of Congress fiercely oppose the expansion. In recent weeks, more than 1,000 people were arrested protesting the project in front of the White House. The U.S. Environmental Protection Agency (EPA) also opposed the project, noting the potential environmental risk of a spill, as well as the energy-intensive process needed to produce refinable crude oil from the tar sands.
TransCanada says Keystone will play "an important role in linking a secure and growing supply of Canadian crude oil with the largest refining markets in the United States, significantly improving North American security supply." In August 2011, the State Department issued a final environmental impact statement (EIS) supporting the project. "The Final Environmental Impact Statement reaffirms the findings of the two previous environmental impact statements that the Keystone XL pipeline will have no significant impact on the environment," Russ Girling, TransCanada's president and chief executive officer, said in a statement at the time. The final EIS "continues to demonstrate the focus on safety and the environment that has gone into the development of this critical North American pipeline."
The State Department consulted with 10 other federal agencies in rendering its final EIS. It concluded that as long as the project was operated according to federal rules, it would have a minimal environmental impact on the area it would traverse. Opponents disagreed, claiming the final EIS did not adequately take into account the potential impacts of a major spill. The State Department is expected to decide in the coming weeks whether the project is in the national interest of the U.S.
As lobbying for and against the pipeline expansion heated up in recent weeks, TransCanada's Girling visited Washington, D.C., in early October to solidify support for the expansion project and try to convince some fence-sitters that it deserves their support. "The United States consumes 15 million barrels of crude oil per day and imports 11 million barrels per day," he said in an Oct. 7 statement. "Under any scenario, the need for crude oil as the primary transportation fuel will remain for decades. The United States has a choice of receiving more oil from its most secure, most stable and most reliable trade partner, Canada, or to continue to import from less stable locations that do not share the interest and values of Americans."
Reflecting on high U.S. unemployment and two weeks of public hearings in U.S. cities, Girling continued, "thousands of working men and women spoke out in support of the project. One in particular captured what this pipeline means to them: 'This pipeline is not just a pipeline--to me, it's a lifeline'."
"This project represents a collision of multiple national interests and multiple political interests," P.J. Crowley, a spokesman for the State Department during part of the review process, told The Washington Post. "Energy security and environment normally go together, but in this case they are somewhat at odds. All have come together to make this a bigger deal than it might have appeared at first blush."
In October 2010, Secretary of State Hillary Clinton reportedly told an audience at San Francisco's Commonwealth Club that she and others in the administration were "inclined" to give TransCanada the permit, adding, "We're either going to be dependent on dirty oil from the Gulf or dirty oil from Canada," according to the Post.
Earlier this month, public meetings on the project drew large and vocal crowds in Montana, South Dakota, Nebraska, Kansas, Oklahoma, Texas and Washington, D.C. Various constituencies, including Tea Party activists, farmers, ranchers, property owners and environmentalists have fiercely opposed the pipeline, citing various reasons. Nebraska's Republican Governor Dave Heineman opposed the project, saying it could contaminate the Ogallala aquifer, the major source of water for his state.
View Plant Profile - 1083849 1080449 1081306 1071029 1083783 1081192
View Project Reports - 55000488 47000438 34000908 32000279 8001651 1012648
Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
