December 14, 2011

 

What is the Keystone Pipeline?

The Keystone Pipeline is an oil pipeline that runs from supply fields in Alberta, Canada through North Dakota, South Dakota, Nebraska, Kansas, Oklahoma, Missouri, and Illinois.

 

What is the Keystone XL Pipeline?

The Keystone XL Pipeline Project would extend the currently operating pipeline (map of current and proposed pipeline).  The proposed Keystone XL Pipeline Project would be a 1,661-mile, 36-inch wide, crude oil pipeline that would begin in Alberta, Canada and extend through Montana, South Dakota and Nebraska, transporting crude oil to delivery points in Oklahoma and Texas. 

The pipeline would incorporate a portion of the Keystone pipeline already operational to serve markets in Oklahoma and Texas.  The proposed pipeline would also transport U.S. crude oil (likely from North Dakota) to numerous delivery points.  If permitted, the XL pipeline would begin operation in 2013, with the actual date dependant on the necessary permits, approvals, and authorizations.

 

How would the construction of the Keystone XL Pipeline affect U.S. jobs?

According to some estimates, construction of the pipeline would immediately create 13,000 American jobs (pipefitters, welders, mechanics, electricians, heavy equipment operators, etc.).  Another 7,000 manufacturing jobs would also be created at the onset of construction.  According to estimates from the Canadian Energy Research Institute, current pipeline operations and the addition of the Keystone XL pipeline would create another 179,000 American jobs by 2035.  Local businesses along the pipeline route would likely benefit from the spin-off jobs Keystone XL would create through increased business for local goods and service providers.  Additionally, the six states through which the pipeline would pass—Montana, South Dakota, Nebraska, Kansas, Oklahoma, and Texas—are projected to receive $5.2 billion in property taxes from TransCanada in the course of the 100-year operating life of the pipeline.

Even the International Brotherhood of Electrical Workers acknowledged the project would “put thousands back to work.”

 

Why is the Keystone XL Pipeline important?

Aside from the obvious gains in American jobs that the pipeline would provide, the approval of the Keystone XL is crucial because of its inherent ability to reduce our nation’s dependence on unstable foreign sources of oil.  According to the U.S. Department of State, the proposed XL project could transport up to 830,000 barrels per day (effectively doubling the current pipeline capacity).  A Department of Energy analysis projects that the increased energy supplies and gains in energy efficiency could essentially eliminate U.S. dependence on Middle East oil.

 

What are the environmental concerns with the pipeline expansion?

In August 2011, the State Department claimed that the pipeline would have limited adverse environmental impacts during construction and operation.  The environmental concerns raised by the State Department were primarily related to the proposed route of the XL pipeline, particularly the area where the pipeline would cross the Ogallala Aquifer in Nebraska.  In mid-November 2011, TransCanada and Nebraska officials addressed these concerns by developing a plan to change the route of the proposed pipeline to avoid these environmentally sensitive areas in Nebraska.[1]  Additionally, the state of Nebraska agreed to coordinate with the federal government so work can begin on the pipeline as soon as possible. 

 

Would this project result in lower energy costs for American consumers?

According to an analysis by the Deputy Assistant Secretary of Energy for Policy Carmine DiFiglio, “Gasoline prices in all markets served by [Gulf Coast and East Coast] refiners would decrease, including the Midwest.”  While it is nearly impossible to calculate the overall nationwide price impact, the administration itself has stated that the pipeline will help lower the price of energy.[2] 

 

What is the status of the Keystone XL Pipeline approval?

Despite the rerouting of the pipeline and the agreement reached between TransCanada and Nebraska officials, on November 10, 2011, the President and the State Department decided to delay the final decision on the Keystone XL pipeline until after the 2012 election.  The President stated, “final decision should be guided by an open, transparent process that is informed by the best available science and the voices of the American people.”   Republicans understand that the refusal to approve the pipeline expansion by the President is nothing more than a politically motivated “punt” to help him shore up the environmental left, his political base, before next year’s election.  Republicans want the President to stop allowing politics to drive his decisions, at the expense of American jobs. 

 

What actions have been taken to proceed with the Keystone XL Pipeline approval process?

On July 26, 2011, the U.S. House of Representatives approved a bill that would require President Obama to make a final decision on the presidential permit for the Keystone XL pipeline.  The Senate never passed companion legislation, and the Administration dismissed the House bill as unnecessary, claiming it would announce a decision by the end of the year.  The Obama administration opposed H.R. 1938 saying, “The bill is unnecessary because the Department of State has been working diligently to complete the permit decision process for the Keystone XL pipeline and has publicly committed to reaching a decision before December 31, 2011.”

 

Why is Keystone a part of the payroll/UI bill since the President issued a veto threat?

House Republicans recognize that we cannot wait to put Americans back to work.  As such, H.R. 3630, the Middle Class Tax Relief & Job Creation Act of 2011, contains a provision that would require the President to issue a permit for the Keystone XL pipeline unless he determines that the pipeline would not serve the national interest.  If the President makes such a finding he would be required to submit a report to Congress providing justification for such a determination. 

 

What happens if the project is not approved?

If the President does not approve the expansion of the Keystone pipeline, he will be refusing tens of thousands of out of work Americans good jobs.  Without an expanded pipeline, the U.S. will continue importing thousands of barrels of oil from unstable sources in the Middle East, and Americans will continue to be held hostage by high energy prices.  To add insult to injury, Canadian officials, including Prime Minister Harper, have suggested that the U.S. delay in approving the pipeline expansion would work to ensure that Asian markets gain access to Canadian crude oil.  During a visit to Capitol Hill in November, 2011, Alberta Premier Alison Redford said, “The reality is that Canada and Alberta will build markets and we will go where there are markets that are available to us … As we move through the process, we need to make decisions with respect to economic development … At some point in time, if we were to see an outcome that was disappointing, we may need to make other decisions."