Some good news for Keystone XL

Michael Whatley Contributor
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It’s been a good couple of weeks for the Keystone XL pipeline. As we move into summer and get ever closer to the project’s finish line, the inevitability of its construction becomes clearer. Despite hyperventilating activists and overheated rhetoric about the dangers posed by oil pipelines, more and more evidence continues to be released about the economic and environmental benefits of the Keystone XL project and others like it.

Exhibit one: Since the early days of the Keystone XL opposition, activists have tried to claim that diluted bitumen, the type of oil the pipeline will carry, is somehow more corrosive than other crude oil and will leave the pipeline prone to leaks. Pipeline engineers and safety experts have long understood that diluted bitumen behaves no differently than other types of conventional crude during pipeline transport. Time and again, scientific studies — including studies from Batelle Memorial, Penspen Integrity, PHMSA, the University of Calgary, Natural Resources Canada and the journal Nature — have confirmed the safety of transporting diluted bitumen.

Anti-pipeline activists also fail to acknowledge that diluted bitumen has been transported to the United States by pipeline for years. Still, it took a new report from the National Academy of Sciences to finally put that trope to rest. The report, released last week, cogently concludes that “diluted bitumen has no greater likelihood of accidental pipeline release than other crude oils.”

Exhibit two: The President’s declaration in his recent climate change speech that he would approve the Keystone XL pipeline only if it could be shown to not “significantly exacerbate” climate change. With this statement, the President has signaled that the pipeline will eventually be approved. First, the President understands that it is safer, more energy-efficient, and produces fewer greenhouse gases to transport oil through a pipeline than using other modes of transportation like trucks.

Moreover, the Department of State’s own draft Supplemental Environmental Impact Statement (SEIS) confirms that Canadian oil sands will be mined regardless of the project, therefore negating any arguments that the pipeline would incentivize oil production and thus lead to increased greenhouse-gas emissions. Despite this conclusion, activists continue to claim that if the Keystone XL pipeline is not built, then Canadian oil companies will simply stop the production of oil sands. The March SEIS rightly points out that even without the project, oil sand production will make it to market, most likely on tankers bound for China, where environmental controls are much more lax than in the United States.

In addition, the 830,000 barrels per day of Canadian crude that will flow through the pipeline will offset heavy crude from Venezuela and Saudi Arabia, which has a much larger per-barrel carbon impact. In fact, transporting crude from Saudi Arabia is 194 percent more carbon intensive than transporting Canadian crude.

No one can make the rational argument that Keystone XL would “significantly exacerbate” climate change. It would seem that if the President is being straight with us, the Keystone XL pipeline will be approved.

Of course none of these items will sway activists or quiet them down. In fact some groups are now claiming that the State Department should do a third environmental impact statement on the most studied pipeline in history.

Canadian crude currently trades at a significant discount compared to West Texas Intermediate crude, and at an even bigger discount to the global benchmark, Brent crude. This is in large part to the supply glut created by the absence of sufficient pipeline infrastructure. While completion of the project will help alleviate this excess supply and narrow the discount, U.S. refiners still have an incentive to purchase cheaper crude from a northern neighbor than from halfway around the world.

Most Americans understand all of this. They know that despite the hype and windy rhetoric Keystone XL is a pipeline, like any other. But one that holds the promise of cheaper fuel, more jobs and economic expansion. Polls consistently show they want the project approved.

Michael Whatley is the Executive Vice President of the Consumer Energy Alliance.

Michael Whatley