"According to the Department of Energy, this one project will 'essentially eliminate' oil imports from the Middle East," Upton said in a CNBC interview. "It will create more than 100,000 jobs and strengthen our relationship with a close ally and trading partner. A project like this should be a no-brainer, and there's simply no good reason it has been stuck in the State Department's red tape for nearly three years."
The project has undoubtedly been stuck. But the rest of Upton's assertions -- the jobs, the reduction in dependence on Middle East oil -- are matters of increasingly heated debate. So, too, are the project's potential environmental impacts.
Indeed, even as current and former federal officials send every signal that the pipeline will get a nod, hundreds of Americans opposed to the pipeline have offered themselves up for arrest in peaceful acts of civil disobedience in front of the White House.
Supporters of the pipeline point to the potential for job creation and freedom from Middle East oil. Opponents fear pipeline leaks and an explosion of greenhouse gases that would arise from the full-tilt development of Canada's unconventional oil deposits.
Both might be a bit disappointed if they get their way.
The Keystone XL venture is a proposed $7 billion, 1,700-mile stretch of pipeline that would carry a form of crude extracted from vast, sticky deposits of sand, clay, water and a gelatinous form of oil called bitumen in what's known as the Athabasca oil sands of Canada to refineries on the Texas Gulf Coast.
When oil prices were low, the vast amount of additional water and energy (and greenhouse gas pollution) needed to scrub and process these sorts of hydrocarbons into something suitable for market was simply uneconomical compared to conventional sources of crude. With oil prices closer to the $100 per barrel mark, the oil sands start looking like a better bet.
Many analysts expect that elevated oil prices are here to stay, so there are clear market drivers at play -- and a shiny new pipeline could translate into jobs. But how many?
The "more than 100,000" number that Upton and others cite has been called into question by critics. It arises largely from a study by the Perryman Group, on behalf of TransCanada, the Calgary-based pipeline company behind the Keystone project. That study concluded that the Keystone XL line would result in nearly 119,000 full-time equivalent jobs.
But Ryan Salmon, an energy policy advisor with the National Wildlife Federation has pointed out that the job estimates associated with Keystone have actually been all over the place -- and in fact, have steadily increased as debate over the project intensified.
Some of the discrepancy almost certainly has to do with the question of direct versus indirect jobs. TransCanada and its supporters like to include the estimated number of ancillary jobs that would be created should the pipeline go ahead -- the retail and service jobs that would presumably spring up to support the direct construction jobs created up and down the pipeline.
But even here, some of the estimates would appear somewhat optimistic. Of the roughly 119,000 jobs the TransCanada/Perryman analysis estimates would be created, for example, only about 29,000 are associated with new construction across all six states through which the pipeline would run. The remaining 90,000 arise from all manner of support industries, from coal mining to insurance jobs -- including some 23,000 projected retail jobs.
Whether or not those are fair extrapolations is a matter of continued debate, but even if the numbers are accurate, other questions remain.
Chief among these involves the assertion that crude from the Keystone Project will "essentially eliminate" dependence on Middle East oil. That talking point first entered the debate via a study commissioned by the Department of Energy and published late last year.
That report, conducted by the research firm Ensys Energy, does say that "a combination of increased Canadian crude imports and reduced U.S. product demand could essentially eliminate Middle East crude imports
longer term." But what's either been lost on or ignored by Upton and others is that this assertion has nothing to do with the Keystone XL pipeline project.
As noted at the time by Liz Barratt-Brown, a senior attorney with the Natural Resources Defense Counsel, the Ensys study instead showed that tough policies aimed at curbing America's appetite for oil -- supported, perhaps, by crude from Canada that will be available regardless of whether the Keystone XL line is built -- would provide the basis for cutting the cord with the Middle East.
Indeed, Ensys felt compelled to issue a clarification on this point:
The EnSys report makes clear that it is the low demand scenario, (which assumes strong policy actions to reduce U.S. oil use), supported by potentially increasing US imports of Canadian crudes, that "could essentially eliminate Middle East crude imports longer term," not the Keystone XL pipeline. As the EnSys report clearly states in its executive summary, the Keystone XL pipeline would not of itself have any significant impact on U.S. oil imports.That sentiment has been echoed by oil market analysts, including Philip K. Verleger Jr., a senior advisor with The Brattle Group, a major consulting firm. In an email to The Huffington Post, Verleger said Keystone was irrelevant to American dependence on Middle East oil. "The global economy is built on free trade," he said, adding that Keystone's oil would ultimately be sent abroad, either in the form of product exports or crude.
"In time, Canadian producers will recognize their mistake," Verleger said. "Keystone will become the world's longest bowling alley."
Such are the assertions made by a new study, released Wednesday by the green energy advocacy group Oil Change International.
From that report:
The construction of Keystone XL will not lessen U.S. dependence on foreign oil -- rather, it will feed the growing trend of exporting refined products out of the United States, thereby doing nothing to enhance energy security or to stabilize oil prices or gasoline prices at the pump. If completed, it will successfully achieve a long term objective of Canadian tar sands producers--to gain access to export markets.Among other things, the study points to Valero, a huge exporter of refined petroleum products with a large stake in the Keystone XL project. The analysis asserts that Valero's business model is contingent on receipts of tar sands oil via the Keystone XL that it can then put on the foreign market.
Bill Day, a spokesman for Valero, said this was untrue. "While Valero has said that it is exporting an increasing amount of products, particularly from the Gulf Coast, the volume of exports remains relatively small," Day said. "The vast bulk of our products are made for domestic consumption."
Shawn Howard, a spokesman for TransCanada, was more blunt in his critique of the OIC report -- and of the increasingly vocal opposition in the United States to his company's pipeline proposal.
"This is part of the desperation and misinformation that these groups are going to continue to put out," Howard said. "At some point this ridiculousness needs to stop. We welcome a discussion on whether the pipeline is in the national interest of the United States. We welcome a discussion about safety of our pipeline. But we just wish they would tell the truth.
"We will be carrying U.S. and Canadian crude to a number of refineries in the U.S.," he added, "and the market for that oil is the U.S. East Coast and the Midwest."
But even if that's true, it's worth noting that another Ensys analysis, conducted along with Navigistics Consulting on behalf of the U.S. Energy and State Departments and published in mid-August, looked extensively at oil market scenarios in which the Keystone XL project is mothballed.
The report concluded that the wide range of other options for moving tar sands crude -- from rails and barges, to other existing and proposed pipeline projects -- make the Keystone XL far from an imperative.
From the report:
Again, while it is possible to conceive of a situation wherein one or two large scale developments are prevented, it is correspondingly almost impossible for us to conceive of a situation where a wide range of pipeline expansions/reversals and projects along existing rights-of-way, rail and barge terminal developments and movements in the U.S./Canadian crude oil supply system are all prevented from occurring.In other words, for good or ill, Canada's so-called dirty oil is likely to get here anyway.
Origin
Source: Huffington
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