With the U.S. presidential election now settled, TransCanada is moving ahead with our plan to build the Keystone XL pipeline to provide a secure and reliable supply of Canadian and American crude oil to refineries in the United States. This oil, which is produced here in North America, stands to replace millions of barrels of higher priced oil the United States currently imports every single day from countries like Saudi Arabia, Venezuela, Russia, Algeria and Iraq.
We continue to work with the State of Nebraska to finalize a route for Keystone XL that minimizes possible impacts on that state’s natural resources, so that the U.S. Department of State will be in a position to approve the project in the first quarter of next year. Once that happens, we will be in a position to begin work on the single largest infrastructure project in North America that will provide jobs for 9,000 Americans to work over two years of construction.
In the meantime, we are seeing professional activists who oppose Keystone XL ramp up their public opposition in advance of the final decision by the State Department. These groups are intent on making headlines, but do not represent the vast majority of Americans, who recognize the need for this pipeline and the benefits it will create.
Once again, we are confronted by catchy slogans that are highly emotional, but misrepresent our project, our company and the entire energy industry. To that end, I’d like to provide our side of the issue to balance this politically-charged debate.
It is impossible to dispute the fact that pipelines are the safest and most efficient method of moving crude oil across the continent. The fact is, lack of pipeline infrastructure is leading many companies to begin moving their oil using more expensive, less efficient, and much riskier forms of transportation, including shipment by rail, truck and even river barges.
The Department of State’s Final Environment Impact Statement on Keystone XL concluded that the chance of fire or explosions is 35 times higher moving crude oil by truck than moving it by pipeline. The risk is nine times higher when using rail and four times higher when using barge. The use of trains to move crude oil is growing quickly, with an estimated tripling of greenhouse gas emissions compared to transportation by pipeline.
We know that Keystone XL and other pipelines are really just the targets in the broader battle being waged by those whose goal is slow down or stop fossil fuel development, particularly development of Alberta’s oil sands. Keystone XL has been referred to as “a fuse to the biggest carbon bomb on the planet” and development of the oil sands has been characterized as “game over for the climate.” Those are great sound bites, but they aren’t backed up by reality.
Instead, they are based on exaggerations and misrepresentations that are truly staggering. The facts about Canada’s oil sands are available for all to see, and are very different than activist groups are leading people to believe. Canada accounts for two per cent of global greenhouse gas (GHG) emissions, of which the oil sands account for 6.5 per cent, or 0.1 percent of global GHG emissions.
A recent study, by climate change experts at the University of Victoria, published in Nature Climate Change concluded that recovering and burning all of Canada’s oil sands reserves, that are economically-feasible to develop, would only increase global average temperatures by 0.02 degrees Celsius (.036 Fahrenheit). This is compared to 0.16 C (.288 F) for the world’s shale gas reserves and 0.9 C (1.62 F) for coal reserves.
Production in the oil sands is growing, and will continue regardless of whether Keystone XL is built or not. The only question is: Where will this oil go? It is our belief that it makes sense to provide as much of it as possible to the United States, which is already Canada’s largest trading partner. Canada is already the single largest supplier of crude oil to the U.S., at 2.5-million barrels per day, but Americans still import most of their required nine million barrels per day from other countries, many of which do not share our mutual values of respect for democracy, strong environmental regulation and human rights.
The latest long-range projection by the International Energy Agency anticipates that Americans could cut their reliance on foreign oil in half by 2020, thanks primarily to the huge boom in shale oil production in areas such as the Bakken Formation of Montana, North Dakota and South Dakota. This is a great step towards improving energy security, but it can only happen if pipelines are built to take crude oil to the markets where it is needed.
This projection also shows that Americans will continue to import oil to meet their needs for the foreseeable future, and Canada could easily supply all of it if the proper infrastructure is in place. It is also worth noting that one out of every three jobs created in the oil sands is held by an American, and that many of the companies that are actively producing crude oil in northern Alberta are American-based firms (ExxonMobil, ConocoPhillips and Devon, to name a few).
Of course it is true that producing crude oil from the oil sands currently requires more energy than conventional light oils. The difference drops dramatically when you compare oil sands crude to the typical crude oils being refined in the United States today, however. Energy experts at IHS CERA have concluded (PDF) that oil sands crude oils are about nine per cent more carbon-intensive than the average U.S. crude oil supply, and this difference is dropping with improved technology and efficiency.
They also point out that up to 80 per cent of the carbon dioxide emissions attributed to a barrel of oil are released when that oil is burned to power a vehicle or heat a home. Looking at the bigger picture, it has also been estimated that shifting the market for Canadian crude oil to overseas markets would lead to a dramatic increase in shipping-related greenhouse gas emissions due to increased tanker traffic on the oceans.
Those who are truly concerned about climate change should focus their efforts on reducing individual energy consumption, rather than protesting how oil is produced or the pipelines that move it.
The United States is the second-largest energy consumer in the world, after China, and the U.S. is now on track to become the biggest oil producer in the world, surpassing even Saudi Arabia in the next 20 years. Turning down the secure and stable supply of Canadian oil that Keystone XL can provide will only result in capital leaving our countries to support OPEC regimes instead of keeping it in our integrated North American economy where it can be used to build a stronger, more sustainable society.
President Obama believes in an “all of the above” energy strategy that eliminates reliance on foreign sources of energy. TransCanada believes in this too, because that’s what Keystone XL is all about.