The assigned reading on domestic petroleum discussed the Oil business, the History of Petroleum and State Conservation Regulation. Part of the reading brought up the discussion on the methods of transportation of oil and gas products which made me consider the discussion surrounding the proposed Keystone XL pipeline.
The Keystone XL pipeline is a proposed pipeline that would transport crude oil from the Athabasca Oil Sands (Tar Sands) in Northern Alberta to several locations in U.S. including Texas, Oklahoma, and Illinois. The location of the pipeline and its environmental impact have been the source of much controversy and debate on both sides of the border.
The Keystone XL pipeline is a proposed pipeline that would transport crude oil from the Athabasca Oil Sands (Tar Sands) in Northern Alberta to several locations in U.S. including Texas, Oklahoma, and Illinois. The location of the pipeline and its environmental impact have been the source of much controversy and debate on both sides of the border.
The Conservative government in Canada has already approved the conversion of a former natural gas pipeline to one that is able to quickly transport crude oil to the American border. This decision was publicly opposed by many environmentalist groups in Canada for two reasons 1) The construction and location of the pipeline could pose significant risk to the ecosystems it traverses and 2) The extraction of the crude oil for the Athabasca Oil Sands has had a serious negative impact on the surrounding environment.
Nevertheless, the economic benefit presented by the mining of the Oil Sands, and the potential economic benefit of the Keystone Pipeline was deemed to be significant enough to overcome the environmental concerns it raised.
In America, the Obama Administration recently rejected TransCanada’s proposal to begin construction on the expansion of the pipeline throughout several American states. The reasons for American reluctance on this project are mainly due to the conflicting reports on environmental, economic and political impact the project could have.
The approach taken by the Obama Administration on this current issue runs in complete contrast to the approach taken in Canada and the approach described in our readings on page 243 by President Bush. Bush’s Alaska Natural Gas Pipeline Act in 2004 called for the streamline of regulation, a singular environmental impact study, and expedited judicial review. Obama has taken a good deal of time in reviewing the TransCanada proposal for the Keystone Pipeline and has put off its approval until a more thorough impact study can be concluded.
The decision on the Keystone Pipeline does not appear to be an easy one. In a time when America is struggling to produce jobs and stimulate its economy, this project could provide both. It would also reduce American dependence on foreign oil by allowing domestic sources to flow more freely, while also providing a more secure foreign oil source as Canada would be a much more stable trading partner than Nigeria for example. However, the environmental impact could be significant if there were to be a leak or an explosion, the jobs created would only be temporary, and this project would not help to reduce Obama’s stated goal of reducing and eventually eliminating American dependence on oil.
The decisions made on this project will have a significant and lasting impact on both countries and it will be interesting how it unfolds.
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