Arguments supporting and against the construction of the Keystone XL Project

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The Keystone XL Pipeline Project: Debates for and Against the Project

Introduction

The Keystone Pipeline System is an oil pipeline system that starts from Canada’s Western Canadian Sedimentary Basin all the way to refineries located in Nebraska, Texas’ Gulf Coast, and Illinois. The pipeline transports diluted bitumen and light and synthetic crude oil from Canadian sand oils and the Williston Basin situated in North Dakota and Montana.  Now, three phases of the pipeline system are already operating. The fourth phase of the system, The Keystone XL Pipeline Project has not yet received the government’s authorization. The Keystone XL Pipeline Project is planned to start from Hardisty in Alberta and run all the way to Nebraska’s Steele City. It will thus replace the old phase 1 pipeline. This project has faced a lot of criticism especially from environmentalists and politicians. Sponsor of the project however insist that it will provide far much more benefits. This paper explores the debate surrounding the construction of the Keystone XL Projects and provides insights on the arguments supporting and opposing the project.

Debates Supporting the Project

Proponents of the Keystone XL Pipeline Project cite the following arguments in support of the project:

  1. The Keystone XL Pipeline Project will create Jobs and boost America’s economy

The main argument by proponents of The Keystone XL Pipeline Project is that the project will create jobs as well as boost America’s economy. According to the Platte Institute of Economic Research (Platte, 2014), construction of the project will generate $1.8 billion worth of economic activity. The project will also generate $134.6 million in the form of levies for local and state agencies. Other economic benefits associated with project include $58.6 million, $39.1 million, $20.1 million, and $3.3 million respectively in property, sales, income, and corporate taxes respectively.  During the life of the project, estimates show that Nebraska residents will get $5.2 billion from the project being payment of property taxes. Nebraskans will also benefit from $500 million as payment for labor income (Platte: 1).

The Keystone XL Pipeline Project will also generate 9,000 jobs for Nebraskan laborers. An additional 42,000 jobs will also be created directly and indirectly by the project. During the construction of The Keystone XL Pipeline Project, there will be more than 7 million labor hours and 13,000 new jobs created for American workers (Platte, 2014). Out of the three jobs created by the project, one will be in America (Keystone, 2014b).

  1. The Keystone XL Pipeline Project will enhance North America’s energy security

By connecting America’s Gulf Coast refineries with nontoxic and dependable crude, The Keystone XL Pipeline Project will enhance America’s energy security by reducing the country’s dependence on oil from Venezuela, Russia, and the Middle East by nearly a half (Keystone, 2014b). Currently, America uses in excess of 15 million barrels of oil daily. Sixty percent of this oil is imported from countries such as Saudi Arabia, Canada, Mexico, Venezuela, and Nigeria. The Keystone XL Pipeline Project will reduce these imports to only 20% of the 15 million barrels daily, as it will transport nearly 830,000 barrels of oil from Canada and continental America. Use of the oil from Canada will enhance the economic output of America by $45 billion every year until 2035.

  1. The Keystone XL Pipeline Project will reduce the transportation distance from Hardisty to Nebraska

The length of the old phase 1 pipeline is longer than that of the proposed Keystone XL Pipeline Project. Reduction of the transportation distance will help to increase efficiency in distribution.

  1. The Keystone XL Pipeline Project has no adverse impact on the environment

Reports show that The Keystone XL Pipeline Project will have few negative effects on the environment. According to the IHS, the project will lead to no substantial increase in greenhouse emissions (Keystone, 2014c). A report by NPR (NPR: 1) argues that The Keystone XL Pipeline Project can possibly become the cleanest and safest pipeline ever.  This is because the critics of the project can demand certain processes be put in place to ensure that it does not generate any harm (NPR, 2014). Additionally, proponents of the project argue that it will have a minimal contribution on climate change due to minimal greenhouse emissions. The NPR also reports that technical studies and scientific data running to 15,000 pages show that the project will barely have any adverse effect on the environment. The studies show that the development of billions of barrels of reserve will not be affected by the project.

  1. The Keystone XL Pipeline Project is not associated with Potential Releases

The scope for potential releases by The Keystone XL Pipeline Project has been determined to be minimal. A review by the UD Department of Safety shows that there is a very little chance that The Keystone XL Pipeline Project will generate gas bubbles in the pipeline which may lead to failure of the pipeline and emit oil releases (FEIS: 1). According to Harvard (Harvard, 2013), the expected increase in pipeline emissions due to The Keystone XL Pipeline Project will range from 0.06% to 0.3%. The increase is deemed to be too small to cause any significant harm (Harvard: 1). Safety and cleanliness is also enhanced by the nature of the project. Road and rail transport usually requires more energy and leads to more emissions of greenhouse gases. Data shows that road and rail transport of oil to the Gulf of Mexico leads to a 41.2% increment in greenhouse emissions when compared to transportation by pipeline.  The Keystone XL Pipeline Project substantially reduces these emissions (Global Warming is Real: 1).

  1. The Keystone XL Pipeline Project will not only be the cleanest pipeline that has ever been built but will also be the safest pipeline

According to the Department of Safety, The Keystone XL Pipeline Project has met the safety requirements of the Pipeline and Hazardous Materials Safety Administration (PHMSA). The PHMSA also came up with 57 new regulations, which the project implementers have agreed to fulfill. If this is done, The Keystone XL Pipeline Project will have one of the highest safety standards ever.

Debates Opposing the Project

  1. The Keystone XL Pipeline Project would lead to a decrease in the extraction of other natural resources and impact negatively on agricultural activities

Opponents of the project argue that The Keystone XL Pipeline Project will reduce the extraction of other natural resources especially metals. They also opine that The Keystone XL Pipeline Project will reduce agricultural land as well as render part of it unsuitable for farming hence decrease agricultural production. This will have a negative effect on the livelihoods and economic security of farmers and have a negative effect on the firms and workers in the extractive industry. The Keystone XL Pipeline Project is also seen to have a negative effect on other land uses (Sitemaker: 1).

  1. The Keystone XL Pipeline Project has Insufficient Mitigation Strategies

According to Argonne National Laboratory, there are insufficient mitigation strategies put in place to ensure that the project has minimum harm. There is no extensive research on the impact of the project on endangered species. Likewise, opponents of the project aver that there are many caribou herds, which may be affected by the pipeline. Opponents argue that the project could lead to a negative effect on these caribou herds (Argonne National Laboratory: 46). In response however, the sponsors of the project state that enough mitigation measures have been put in place and the design of a suspension bridge and design of aboveground facilities to help avoid wetlands and floodplains. The funders of the project also say that they have adequately catered for both hazardous and non-hazardous waste and explain that no burning or burying of waste material will be allowed and that work will be terminated anytime contact with toxic material occurs. Still on the issue of mitigation measures, the project implementers say that they will create gaps in rows of topsoil and subsoil for facilitation of surface drains. These mitigation measures are enough to discredit the claims by the opponents of the project, argue the proponents (Keystone, 2014d: 1).

Other mitigation measures which the project implementers have put in place include trench and slope breakers where reseeding will be done as need arises, boundary markings put in place, and monitoring done for several years. Seeding will also be done and control of erosion and sediments done.

  1. Environmental Concerns

A number of environmental groups have raised concerns that The Keystone XL Pipeline Project will lead to massive carbon pollution (Forbes, 2014). According to Smith (2013), the project will lead to the burning of tar sands oil and this will raise the global temperature by two degrees Celsius. Such an increase is forecast to reduce America’s GDP by 2.5%. This will worsen the extreme weather conditions such as droughts and super storms and which are becoming common in the United States (Smith, 2013).

Opponents of the project also say that the project will harm the Arctic Ocean through spills and cause harm to the Arctic National Wildlife Range through its passage via the Trans-Canada Corridor.

  1. Economic Effects

Opponents of the Keystone XL Pipeline Project argue that the project will have a negative impact on the economy by increasing unemployment. The increased unemployment is attributed to the potential of the project to increase global warming, leading to adverse weather conditions, which are expected to cause job losses. Comparisons of the expected job losses are compared to the unemployment brought about by disasters such as Hurricane Katrina, Hurricane Irene, and Super Storm Sandy (Smith: 1). Opponents also argue that getting the oil and transporting it through The Keystone XL Pipeline Project will increase the cost of oil in Midwestern America. This is projected to occur due to diversion of oil sands from the refineries that are located in the Midwest to export markets and the Gulf Coast (ILR: 2).

One of the most potent arguments put forward regarding the potential of the project to cause harmful economic effects avers that the Keystone XL Pipeline Project will raise the cost of oil charged by the oil sands producers. This will help to enhance the oil industry in Alberta, Canada. Since the Canadian economy is dependent on oil and petroleum money, there will be spinning off effect that will strengthen the value of the Canadian dollar relative to that of the US dollar. The net effect is that the manufacturing industry will become less competitive and shed off up to an estimated 100,000 jobs. The lost jobs will in turn find their way south and enhance the U.S. manufacturing industry (ILR: 2).

Still on the economic effects of The Keystone XL Pipeline Project, opponents of the project argue that the high figures being bandied about by the opponents of the project are not only unrealistic but also inaccurate. They argue that there are no credible and exhaustive studies to support the claims by the proponents of the project that it would create tens of thousands of jobs. Instead, the proponents argue that the highest number of jobs that can be created by the project is way too small and border around the region of 2,000 during the construction of the project (Associated Press: 1).

Others argue that upon completion of The Keystone XL Pipeline Project, there will be a glut in oil pipelines. This is because oil pipelines from Canada suffer from a serious overcapacity problem. This means that completion of the project will cause oil pipelines in America to run on empty. The low volumes together with the huge costs used in the construction of the pipeline will make it economically unviable and convert it into a white project. This may also lead to significant revenue losses (Vanderklippe: 1).

  1. Safety Concerns

Opponents of The Keystone XL Pipeline Project argue that the project is undesirable because it will generate toxic and non-toxic materials, which can harm people and the environment. Other safety concerns relate to the potential for oil spills, which can harm marine life and potential releases. There is also concern by the local population where the pipeline will pass that the project will be a source of potential contamination affecting surface water and fish. It is feared that the contamination will be brought about by the extraction of the oil sands.

  1. Double Standards and a Hidden Agenda

According to opponents of the Keystone XL Pipeline Project, the people behind the project are not only hypocritical but also have double standards. The opponents argue that big oil, which is fronting the project, shed more than 11,000 jobs in six years despite chalking in profits of over $540 billion. The oil companies, which are loudly extolling the potential of the proposed pipeline to create employment, retrenched 4,400 workers in 2010 but paid their executives more than $200 million. Nearly a half of all jobs in the oil industry are minimum-wage employees yet the oil majors pay hundreds of millions of dollars to their top executives (Smith: 1). This argument seeks to portray the proponents of the project, especially the oil companies, as double-faced people who are not sincere in their views about the project but only want to benefit from it.

  1. Conflict of Interest

The contractor initially mandated to carry out an environmental impact assessment on the Keystone XL Pipeline Project delivered a report that was found to be deeply flawed. It was also revealed that the names of the people who authored the report were delisted from the report by the State Department in order to conceal their association with TransCanada and other oil companies. Apparently, the authors of the study had a longstanding association with TransCanada and several other oil firms and had done work for them previously. Opponents of the project seized on this revelation to discredit the project, claiming that a lot was being hidden about the project. Claims about the shady nature of the project were amplified further by reports that the Environmental Resources Management unit had received an undisclosed sum of money in order to authorize the project. As argued by the project’s opponents, these occurrences demonstrate a conflict of interest and a deep seated desire to hoodwink the American citizenry that the project will be beneficial to them whereas the exact opposite is true (Paul: 1).

CONCLUSION

This paper explored the debate surrounding the construction of the Keystone XL Project. Arguments supporting and discrediting the project were provided and discussed. Among the arguments in support for the project are that the Keystone XL Pipeline Project will create many jobs. This will boost the economy, enhance North America’s energy security, reduce the transportation distance from Hardisty to Nebraska, is not associated with any potential releases, will have a minimal impact on the environment, is safe and clean, and has sufficient mitigation strategies.

Arguments against the project are that the Keystone XL Pipeline Project will have adverse economic benefits, will harm the environment, has insufficient mitigation strategies, is unsafe, and will lead to a decrease in the extraction of other natural resources and impact negatively on agricultural activities. The project is also opposed because of the conflict of interest and double standards exhibited by the project implementers.

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