Energy Key: Keystone XL Pipeline

Mark Green
Posted June 10, 2011

While the administration wrestles with itself over approval of the Keystone XL pipeline, some important points to consider:

• Within a few years of its completion, Keystone XL would deliver upwards of 830,000 barrels of oil per day (b/d) from Canada's oil sands region to U.S. refiners, creating tens of thousands of U.S. jobs.
• The Energy Information Administration reports that with the additional 830,000 b/d, U.S. production and secure, reliable Canadian imports would supply 57 percent of our crude oil needs - up from 51 percent in 2010.
• In a larger context, the pipeline would be part of an access strategy that could supply 92 percent of this country's liquid fuel needs by 2035.

Given the prospect of access to that much oil from a good neighbor and ally, you'd think government approval would be a no-brainer. Unfortunately, not. This week the Environmental Protection Agency suggested that pipeline review by the State Department (charged with approving the project) has been flawed and called for more scrutiny - after three years of study already. TransCanada, the pipeline's builder, hoped to get approval by last summer! Here's API Executive Vice President Marty Durbin:

"We have a critical decision to make. We can approve this pipeline and gain access to large amounts of highly secure oil that we know our nation will be consuming in the years ahead. Or we can let our friends to the north find other markets, which they will easily do. There is no environmental advantage to that, and it would prevent many thousands of high-wage U.S. jobs from being created. ... Following three full years of review and assessment, it's time for this important project to move forward."

In a conference call to reporters Durbin outlined Keystone XL's upside:

• As many as 20,000 new U.S. jobs during pipeline construction alone. According to the Canadian Energy Research Institute, U.S. jobs supported by Canadian oil sands could grow to 465,000 in 2035.
• Nearly 1,000 companies from 47 states already are involved in oil sands development.
• For every dollar the U.S. spends on Canadian projects, including oil, Canadians return up to 90 cents through purchases of U.S. goods and services.

Most of all, there's the energy. Keystone XL would be part of an access strategy - along with areas currently off-limits to exploration and production in the U.S. and offshore - that by 2035 could provide 92 percent of this country's liquid fuel needs, according to calculations based on government estimates and other research.

In other words, the pipeline could deliver crude oil at levels that would impact U.S. imports of non-American oil. "This kind of quantity can make a big difference to us and to the world in terms of having extra supplies from such a reliable source," said API Senior Economist Rayola Dougher.

More from Durbin:

"Oil will continue to be a critical part of the nation's energy mix for the foreseeable future. We have the opportunity to enhance domestic energy security in cooperation with Canada, our largest trading partner and friendly North American neighbor. ... The U.S. should approve the pipeline to utilize this resource to enhance our energy and national security, preserve our global competitiveness, and maintain our role as a world economic leader."

Additional resources:

API comments on State Department's draft environmental impact statement

Oil sands at a glance