Keystone XL, Polling and Politics

Mark Green
Posted May 13, 2015

Some observations on a new University of Texas energy poll and its findings on the Keystone XL pipeline:

First, among Americans who have some familiarity with Keystone XL, 45 percent support the pipeline’s construction while 21 percent oppose. (Twenty-one percent said they neither support nor oppose Keystone XL and 13 percent said they didn’t know.)

The more than 2-1 margin of Americans who favor Keystone XL over those who don’t in the poll underscores a couple of things: People who’ve learned about the pipeline, its purposes and its benefits in terms of jobs and economic growth overwhelmingly support it – and they must be baffled that it hasn’t been built yet. It also underscores how unfortunate it is for the country that Keystone XL’s merits have been denied by purely political, inside-Washington reasons.

Second, among those in the poll who oppose Keystone XL, climate change isn’t the top reason they oppose it – no doubt a kick in the pants to those who’ve spent lots of time and money arguing that building the oil pipeline would doom the climate and the planet.

They have themselves to blame. The main reasons to oppose Keystone XL, cited by the 21 percent in the poll – potential impacts on the environment and water, the presence of hazardous chemicals and benefits accruing to Canada instead of U.S. consumers – reflect the “whack-a-mole” strategy opposition leaders used, moving from flawed claim to flawed claim as quickly as facts, science and sound analysis dispelled them.

To further the discussion, let’s look again at the facts surrounding the top concerns of the 21 percent. Maybe that number will come down in the next UT poll.

Environment, water, chemicals – Keystone XL cleared five environmental reviews by the U.S. State Department (click here for the most recent in the series). State’s analysis found that no significant environmental impact will result from the pipeline’s construction, its operation or from the oil sands development the project will help advance. Keystone XL will have no bearing on oil sands development and thus negligible environmental effect, climate or otherwise, State said:

… approval or denial of any one crude oil transport project, including the proposed Project, is unlikely to significantly impact the rate of extraction in the oil sands or the continued demand for heavy crude oil at refineries in the United States based on expected oil prices, oil-sands supply costs, transport costs, and supply-demand scenarios.

An IHS study came to a similar conclusion, that the Keystone XL would have no material impact on U.S. greenhouse gas emissions:

With or without oil sands supply to the US Gulf Coast (USGC), refiners there would continue to process heavy crude oils, since they are configured to run these grades. The most likely alternative USGC heavy oil supply is Venezuelan crude which is in the same GHG emissions range as oil sands. Consequently, if oil sands were not consumed in the Gulf Coast, there would be little to no change in the overall GHG intensity of the US crude slate. Even if the Keystone XL pipeline does not move forward, we do not expect a material change to oil sands production growth. Therefore the Keystone decision itself will not have any impact on GHG emissions.

As for the pipeline’s safety, builder TransCanada has voluntarily agreed to 59 special conditions to make Keystone XL one of the safest ever built – including high-quality carbon steel that’s resistant to corrosion and punctures, automatic shutoff valves and a commitment to inspect 100 percent of the welds along the pipeline.  The company also agreed to adjust its route through Nebraska to avoid environmentally sensitive areas. Keystone XL would join 20,000 miles of oil, natural gas or chemical pipelines already under the state's Ogallala aquifer -- and would be the safest, most efficient means to bring North American oil to market.

U.S. vs. Canadian benefits – It’s simply false that the benefits of Keystone XL will bypass the United States. The oil Keystone XL would deliver, from Canada and the U.S. Bakken region, will be refined at U.S. refineries. It would not be an oil-for-export pipeline, the State Department said:

Gulf Coast refiners’ traditional sources of heavy crudes, particularly Mexico and Venezuela, are declining and are expected to continue to decline. This results in an outlook where the refiners have significant incentive to obtain heavy crude from the oil sands. Both the EIA’s 2013 AEO (Annual Energy Outlook) and the Hart Heavy Oil Outlook (Hart 2012b) indicate that this demand for heavy crude in the Gulf Coast refineries is likely to persist throughout their outlook periods (2040 and 2035 respectively). … Thus Gulf Coast refineries have the potential to absorb volumes of (oil sands) crude that go well beyond those that would be delivered via the proposed Project. On this basis, the likelihood that (oil sands) crudes will be exported in volume from the Gulf Coast is considered low.

An IHS CERA study agreed. IHS Senior Director Aaron Brady:

“There is a common misunderstanding that somehow most or all of the oil shipped to the U.S. Gulf Coast via the Keystone XL pipeline would be exported to other countries. The reality is that the U.S. Gulf Coast is the world’s largest single refining market for heavy crudes such as oil sands, making it unlikely these barrels would be exported offshore. And, the overwhelming majority of refined products produced in the Gulf are consumed in the United States, regardless of the crude source. … Regardless of whether the oil is imported from Canada or Venezuela, the overwhelming majority of the refined products produced in the Gulf will continue to be consumed in the United States.”

Then there are the benefits to the U.S. of increased trade with Canada, which would be facilitated by the Keystone XL. Canada is the United States’ No. 1 source of imported oil. It’s a stable, reliable supply source. According to the government, for every dollar spent on Canadian imports the U.S. receives 90 cents back in exports sold to Canada. That compares to a rate of 36 cents on the dollar in our trade with Venezuela.

Finally, the Keystone XL would have direct, positive impact in the U.S. The State Department says the project would support more than 42,000 jobs during its construction phase, put $2 billion in the pockets of workers and add $3.4 billion to U.S. GDP. And it would help increase U.S. energy security by delivering upwards of 830,000 barrels of oil a day to our Gulf Coast refineries – again, from Canada and the Bakken region of North Dakota and Montana.

The Keystone XL pipeline is in the U.S. national interest and should have been approved and built years ago. It has consistently been supported by strong majorities of the American people, as well as bipartisan majorities in both houses of Congress. The reasons for building this major piece of energy infrastructure, fulfilling a number of the administration’s goals for infrastructure investment and economic growth, have addressed questions about the project’s safety, environmental impact and economic value to the U.S. for some time. Neither those questions nor the grab-bag of discounted excuses that have been floated by anti-Keystone XL activists should continue to keep the project on hold.