Last updated on 2011.11.12
Following the Obama Administration's welcome decision to take time to study alternative routes for the Keystone XL tar sands oil pipeline, journalist Bob Mercer raises a perfectly logical question: if the proposed route won't work, where will Keystone XL go?
The perfectly logical answer: right alongside TransCanada's existing tar sands pipeline, Keystone I, through eastern South Dakota. That's exactly the route Senator Mike Johanns suggested last year when he threw his Republican weight behind Nebraska's efforts to protect the Sand Hills and the Ogallala Aquifer from TransCanada's contamination.
Moving the pipeline to its current route would defuse some of the political opposition to the pipeline. With the Sand Hills and Ogallala auqifer protected, Senator Johanns and Nebraska Governor Dave Heineman lose key justifications for their pipeline opposition. Numerous landowners are spared eminent domain, as TransCanada simply invokes the rights-of-way it has already taken by judicial force against landowners on the Keystone I route.
But this discussion assumes that the pipeline can survive an extra 15 months of delay. Contrary to Ken Blanchard's thesis, President Obama's crafty political decision has done something. TransCanada has contracts to deliver oil by the end of 2013, which isn't going to happen. Refiners and shippers may turn to competitors like Enbridge, leaving Keystone XL completely unnecessary.
East River landowners, watch out for Keystone land agents tromping through your property again. But odds are, TransCanada's construction business in South Dakota is done for now (to which the proper response is, Yahoo!).
Update 18:08 MST: Plains Justice explains the short shrift given alternative routes in the Keystone XL review. Notes from elsewhere:
- Canadian Finance Minister Jim Flaherty says President Obama made "quite a crucial decision" and says he is "not sure this project would survive that kind of delay."
- My mother-in-law reports TransCanada is blanketing the Nebraska airwaves with propaganda.
- Terence Corcoran of Canada's Financial Post says property rights are the real Keystone issue, something the conservatives at Dakota War College are too chicken to address.
- Oil traders are betting that alternative projects will replace Keystone XL and bring on the higher North American oil prices that Keystone XL would have made possible.
Update 20:38 MST: TransCanada has been selling Keystone XL as a stimulus package to create 20,000 jobs. Now TransCanada VP Robert Jones scales that back to hundreds of short-term jobs:
Update 2011.11.12 17:51 MST: Turning the pipeline west toward British Columbia is unlikely. Canada's regs and First Nations are much tougher. Besides, Canada isn't producing enough oil to fill a westbound pipeline:
Moreover, that line will not even be needed. The combined processing capacity of Western Canada's oil refineries and existing major export pipelines from the region will exceed oil production forecasts until sometime early in the next decade, according to the Canadian Association of Petroleum Producers [Robert Campbell, "If Keystone XL Dies, Does China Win? No," Reuters, 2011.11.10].
Exactly. We must discipline the engineers and politicians to use infrastructure corridors; to stop further subdividing our ranches, farms, prairies, and forests. There is little reason for a "new" pipeline route, or for that matter a "new" powerline route bisecting the Black Hills.
One alternate route would cost Keystone an additional $1.7 billion and another one would add $500 million. More environmental concerns may be associated with the new routes and residents are fighting eminent domain. The oil sands developers may decide to pipe their oil directly to the coast for shipment to China or Japan.
Here's what I don't understand. Since tar sands costs so much more and involves a much higher risk to run through a pipeline than normal crude oil, why not refine the stuff at the site where it's mined? There would be less risk and more value for Canada at the site. All this whining about an alternate route costing so much more sounds ridiculous.
I totally agree; refine tar sands oil where it is mined or build a pipeline directly to the coast as many articles state that this oil will be shipped to China or Japan.
Also build a refinery near the Bakken oil fields, and stop the planned refinery (in southeastern SD) on the best farmland in South Dakota.
Running a pipeline from Alberta to the Canadian West Coast is a no-go:
"Prime Minister Stephen Harper’s office said Thursday it might bolster its public support for Enbridge’s proposed 1,200-kilometre Northern Gateway crude pipeline from Alberta to the B.C.’s West Coast, targeting Asian markets. But Potter said the project — though necessary — is a 'pipe dream,' since Ottawa can’t strong-arm those First Nations communities affected by the pipeline that are opposed" [Rebecca Penty and Dina O'Meara, "TransCanada Scrambles to Keep Keystone XL Viable," Calgary Herald, 2011.11.11].
On refining in Canada: building more refining capacity in Alberta would create all sorts of jobs for Canadians and allow them to reap the benefits of adding value to the product on their territory. However, building the two refineries necessary to handle the excess supply in Alberta would cost up to $20 billion, which the Canadian natural resource minister says is not economically viable.