Informing the Keystone XL Decision

Mark Green
Posted December 29, 2011

With the Keystone XL pipeline back on President Obama’s to-do list, let’s hope he does the right thing and approves this shovel-ready project – to create thousands of jobs and help make America more energy secure, which most Americans support.

Recent legislation extending the payroll tax cut, which the president signed, also requires him to decide on the Keystone XL within 60 days. He should say yes. Previous objections to the pipeline’s path through Nebraska are being worked out, and Nebraska Gov. Dave Heineman is onboard. All that’s needed is a green light from the White House to bring good-paying jobs to Americans.

Amazingly, not everyone supports the creation of more U.S. jobs and greater energy security from the Canadian oil sands crude that would come to the U.S. through the Keystone XL. Opponents are recycling some of the same misinformation they used last summer, trying to turn what should be a no-brainer into brain freeze.

Among many things opponents say Canadian oil sands oil is “dirty” and that it’s more corrosive than other crude oil. They say the oil would be exported – while dismissing the notion that Canada could turn to other markets if the Keystone XL is rejected. They claim the new 60-day decision deadline amounts to “rushing” things when in fact officials already had been evaluating whether this project is in our nation’s interest for 75 days. Since it looks like the media truth squads and fact checkers are on holiday, let’s take a look at some of these.

Claim: Oil sands oil is “dirty” oil and uniquely corrosive – The fact is about 70 to 80 percent of the greenhouse-gas emissions from oil, no matter where it comes from, occur when fuel is burned. GHGs from Canadian oil sands are comparable with those from other crudes refined in the U.S. (See below, Page 30 of an information-rich oil sands guide by the Canadian Association of Petroleum Producers.) As for corrosion, oil sands crude has been transported in existing pipelines for decades. Experts say it’s  characteristically similar to other crudes.

Claim: Canadian oil sands crude is mostly for export – U.S. refineries are better equipped than others to process heavy crude oils, like those from Canada, Mexico and Venezuela, to produce the fuels we need as well as supply products demanded on the global market. The vast majority (83 percent) of crude refined in the U.S. is for use here. But refineries produce lots of products from a barrel of oil – gasoline, diesel, heating oil, bunker fuel and more – and they need markets for each. In 2010 only 17 percent of U.S. refinery production was exported, mostly products that aren’t in demand here. Meanwhile, the Energy Information Agency says increased imports of Canadian oil sands crude likely would replace declining heavy crude imports from Venezuela and Mexico. Two other points: Any exported products still would be refined in U.S. refineries by U.S. workers, and petroleum exports help the United States’ balance of trade just like exports of steel, ethanol, grains and machinery.

Claim: U.S. or bust – Some argue there’s no urgency to a decision on the Keystone XL because Canada doesn’t have alternative buyers for its oil sands crude. That’s not the impression you get listening to Canadian officials (here’s Canadian Prime Minister Stephen Harper talking about his country’s oil sands options) or by noting China’s increasing oil sands investment. We import more oil from Canada than another other country. Strengthening our energy partnership with Canada makes us more energy secure, and it’s good for our economy.  For every dollar we spend on Canadian goods, Canada returns 90 cents to the US economy.

Claim: Rush to a decision – The Keystone XL is in its fourth year of review. During that time the project has successfully cleared three consecutive environmental reviews conducted by the State Department and has been the focus of numerous public hearings across the country. As Gen. James Jones, the president’s former national security advisor, said recently, the Keystone XL is in the nation’s interest, and it’s time for an affirmative decision on that basis.  “The President needs to make a decision on the Keystone XL permit,” Sen. Richard Lugar said last week. “Enough is enough.  How long does it take to put America’s workers first?”

Great question.