The Keystone Tar Sands Pipeline

The Keystone Tar Sands Pipeline: What You Need to Know

The Keystone XL Tar Sands Pipeline is a proposed extension to the existing Keystone pipeline system, owned by energy giant TransCanada, to transport tar sands oil from Alberta, Canada, to Texas refineries on the gulf coast.

Why do we oppose the pipeline?

  • Extracting tar sands oil requires much more energy and water – and generates three times more carbon pollution – than drilling for conventional oil. As a result, producing and using each barrel of tar sands oil adds 20% more global warming carbon pollution to the atmosphere than even conventional oil. Renowned NASA scientist James Hansen has said that building the Keystone pipeline would be “game over” for the climate.
  • The unrefined tar sands extract, bitumen, is an almost-solid, very corrosive sludge, which must be heated and diluted with carcinogenic benzene to be transported along the pipeline. This makes transportation especially dangerous and prone to spills. In fact, there have already been 14 spills in the first year of the original Keystone pipeline.

What are the arguments in favor of the pipeline?

Some have expressed concern that America needs more sources of oil from friendly neighbors to make us less dependent on oil from unfriendly or unstable regimes. They may also believe that the pipeline will create jobs, or that Canada will inevitably export the tar sands oil to other nations if we don’t take it here. None of these arguments hold up to scrutiny.

The Facts

Refusing to build the pipeline is unlikely to result in the tar sands oil going to other countries.

TransCanada has proposed Keystone XL precisely because they have been unable to win a permit  in Canada to build the much shorter pipelines that would be required to get the oil to Canadian ports. Canadian First Nation tribes whose land would be needed to build a pipeline from the landlocked tar sands to Canada’s west coast are firmly opposed to it, and legally able to block the project. The Canadian Pembina Institute says that even if all of this opposition were somehow overcome, it would be at least ten years until that pipeline could possibly be operational. Since tar sands oil is far more expensive than other oils to produce, the growing development of cleaner fuels is likely to make it unmarketable by then. If this pipeline isn’t built, tar sands oil will continue to be stuck in Canada or the Midwest US, to which a pipeline already exists. Most of the oil will stay where it belongs — in the ground locked up in sand. 

The pipeline will result in negligible job creation, and may cost more jobs than it creates.

  • In 2008, a report included in TransCanada’s own permit application for the pipeline said they anticipate “a peak workforce of approximately 3,500 to 4,200 construction personnel” over the course of two years, and there’s no telling how many of these construction jobs will be in Canada. The number of permanent jobs in the US will be far smaller, probably numbering in the hundreds or fewer.
  • The pipeline will generate few manufacturing jobs in the U.S., as the steel for the project is being produced abroad by foreign companies, and much of it has already been purchased.
  • The Cornell Global Labor Institute found that it would kill more jobs than it would create due to the increased cost of spills and fuel (see below).

The pipeline is unlikely to make America less reliant on other foreign oil sources, and may even undermine the clean energy development that could achieve that objective.

The pipeline would only ease America’s reliance on other foreign oil if it were a plan to keep the oil in the United States. Unfortunately, it is primarily a plan to allow tar sands companies and refiners like the Koch brothers to export the oil from the Gulf Coast to other countries, reducing US supply and therefore allowing the companies to charge more for oil – both abroad and at home.

  • The Midwest and Great Plains already have as much tar sands oil as they need – in fact, oil in the American heartland has been selling for about $15.00/barrel less less than the global price because of what oil companies privately describe as a “glut” of crude in the region.
  • TransCanada has admitted in its permit applications that the Keystone XL will increase oil prices in the Midwest by $6.55/barrel. See also.

Some have argued that we could put conditions on the pipeline banning exporting the oil. However, the courts or WTO could easily strike down such an export prohibition under international trade agreements. Congress could also change it after the pipeline is built, perhaps with the incentive of claiming some royalty from the exported oil.

May 2012