Keystone XL Pipeline: Five years and still waiting

Valero refinery in Port Arhur, Texas

Ready for Keystone XL Pipeline: Valero Energy Corporation is a key customer of the Keystone XL Pipeline. Its refinery in Port Arthur, Texas (above) is one of several Gulf Coast refineries hoping to replace more expensive imported crude oil, they currently import from overseas, with a more stable supply of oil produced in Canada and the U.S. supplied by Keystone XL. Valero employs more than 10,000 people and processes three million barrels of oil a day, providing the fuel Americans need, through its Valero, Diamond Shamrock, Shamrock, Beacon, Ultramar and Texaco brands.

Today marks five years from when TransCanada filed its original application in the United States to build the Keystone XL Pipeline. Back in 2008, we had just received a Presidential Permit for our original Keystone Pipeline after a standard regulatory approval process that lasted 21 months. We were able to move forward with putting 9,000 Americans to work building the pipeline that began service in July 2010 and has now safely delivered nearly 500 million barrels of oil from Canada to refineries in the U.S. Midwest.

If it had followed the same regulatory process, Keystone XL would now be up and running, supplying America’s largest refineries on the Gulf Coast with a secure supply of lower-cost oil from producers in Western Canada and the U.S. Bakken region. More than 9,000 skilled Americans would have been employed over two years of construction, helping the U.S. recover from a devastating recession by injecting $5 billion in private-sector investment into the economy. Communities along the pipeline route would now be seeing millions of dollars in additional tax revenues injected into their budgets.

Instead, political debate is what people have watched break out — on what must now be the most thoroughly studied and publicly discussed pipeline in American history. Misinformation continues to delay one of North America’s largest “shovel ready” construction projects that will help modernize America’s energy infrastructure and provide the safest and most efficient method of moving up to 830,000 barrels of crude oil per day to the Gulf Coast.

“For me, the most disappointing thing about the delay and politicization of Keystone XL is not the impact it is having on TransCanada, but the fact that the U.S. and Canada have not been able to realize the benefits of jobs, enhanced energy security and increased trade between our two nations that is in all of our best interests,” says Alex Pourbaix, TransCanada’s president of energy and oil pipelines.

“The result has been a rise in other methods of transporting crude oil that are not as efficient or safe as pipelines; and U.S. refineries continuing their reliance on crude oil from places like Venezuela, Saudi Arabia and Russia that do not share our values, our commitment to protecting the environment, or our highly integrated economy.”
— Alex Pourbaix, President of Energy and Oil Pipelines, TransCanada

In comments today before the U.S. House of Representatives Energy and Commerce sub-committee, labor leaders expressed deep concern about the impact that delayed the benefits that their members have been counting on for years.

“This project will create millions of hours of work hours for the members of our unions, with good wages and benefits. These delays cost construction workers jobs during one of the worst economic periods in our nation’s history,” says Ron Kaminski, business manager for Local #1140 of the Laborers International Union of North America (LIUNA), which has a project labor agreement with TransCanada.

“The construction sector was hit particularly hard by the economic recession. The unemployment rate in the construction industry reached over 27 per cent in 2010, and joblessness in construction remains higher than virtually any industry or sector, with nearly one million construction workers currently unemployed in the United States,” Kaminski added.

“Too many hard-working Americans are out of work, and the Keystone XL Pipeline will change that dire situation for thousands of them. The undeniable truth is that while opponents of the pipeline have successfully delayed the construction of the Keystone XL, members of my union have lost homes, lost their health care and other benefits. Construction workers deserve more respect.”
— Ron Kaminski, Business Manager for Local #1140 of LIUNA

According to Norfolk, Nebraska’s Chamber of Commerce president Dennis Houston, construction of the first Keystone pipeline “generated $10 million in economic impact in the Norfolk area during the recession.”

“The project created 750 jobs and became the third largest employer in the community. Our high level of economic growth would not have been possible without the original Keystone Pipeline running through the Norfolk area.”
— Dennis Houston, Norfolk, Neb., Chamber of Commerce President

Similarly, in a news release issued on September 18, 2013, Sean McGarvey, president of the North America’s Building Trades Unions, says that a project that is supported by most Americans and can be built safely with minimal environmental impact needs to move ahead.

“While the national unemployment rate hovers around seven to eight per cent, unemployment in the construction industry is still over nine per cent. Keystone XL will immediately allow thousands of the safest, most highly trained workers to begin building this state-of-the-art pipeline,” McGarvey said. “Jobs. Economic growth. Energy security. National security. It’s no wonder so many newspaper editorials and other influential voices are calling on the president to approve this vital project.”
— Sean McGarvey, President of the North America’s Building Trades Unions

Indeed, Keystone XL is just as vital to the North American energy industry and the overall economy as it was when it was first proposed more than 1,800 days ago. Our shippers continue to be firmly committed to supporting the project with long-term contracts that underpin the pipeline’s development and operation for years to come.

“We think it should have been approved years ago, and it’s a shame that it has turned into a political issue rather than an energy or economics issue. If it had remained an energy or economics issue, there’s no question it would have been approved long ago,” says Bill Day, vice president of media and communications for Valero.

“Valero has large, complex refineries along the U.S. Gulf Coast that were built to process heavy crude. Those plants have been receiving heavy crude from Mexico and South America for many years, but those sources are declining in production. Valero would like to replace those declining supplies of heavy crude with the ample supplies of heavy crude from Canada, and the easiest and most cost-efficient method of getting that crude to our Gulf Coast refineries is by pipeline.”
— Bill Day, Vice President of Media and Communications for Valero

Oil producers, such as Canada’s Cenovus Energy are also hopeful that Keystone XL will be approved and continue to stand behind the project.

“Cenovus Energy remains committed to the Keystone XL project. We believe the pipeline is in the best interest of all Canadians and Americans,” said Don Swystun, Cenovus’ executive vice-president, refining, marketing, transportation and development.

“The project will create thousands of jobs and provide reliable feedstock to refineries whose products help fuel our great way of life — products like jet fuel, gasoline and petrochemicals. And, contrary to what many of the critics are saying, the Canadian oil that Keystone XL will carry is being produced responsibly, under the strictest environmental and regulatory standards in the world.”
— Don Swystun, Executive Vice President, Refining, Marketing, Transportation and Development, for Cenovus Energy

In the meantime, TransCanada continues to await the release of the U.S. Department of State’s Supplemental Environmental Impact Statement on the project and hopes Keystone XL can be up and running before the end of 2015.

“At the end of the day, I believe that logic will prevail over the loud voices of professional activists and celebrities that are using Keystone XL to further their own agendas with no regard for facts and science. The United States will continue to require millions of barrels of oil to be imported every day to meet its own needs and it just makes sense for more of that supply to come from right here in North America.”
— Alex Pourbaix