Environment
12:23 am
Mon November 12, 2012

Weighing The Prospects Of The Keystone XL Pipeline

Originally published on Tue November 13, 2012 7:17 am

Among the difficult decisions facing President Obama is whether to give the go-ahead for the controversial Keystone XL oil pipeline, which would bring oil from Canada down to refineries in the Gulf of Mexico.

Environmentalists want it blocked. They are concerned about endangering the Nebraska sand hills, under which is the largest aquifer in the country. It provides drinking water and irrigation water for several states.

Oil companies and their supporters, meanwhile, say the pipeline is in the national interest because it will create thousands of jobs and make the country more energy independent.

In January, Obama refused to make a decision about the fate of the pipeline, citing a State Department recommendation for more time to review alternative pipeline routes.

But now that the presidential election is over, environmentalists and politicians are putting renewed pressure on Obama to make up his mind. Sarah Ladislaw from the Center for Strategic and International Studies spoke with NPR's Renee Montagne about the prospects for the project.


Interview Highlights

On the importance of the Keystone pipeline to the country's future and for energy security

"It's a really hard question to answer because there's a variety of perspectives involved. If you're an oil sands producer in Canada, then you obviously think it's fairly necessary to have this infrastructure to be able to get your product to market. If you're a refiner in the Gulf Coast of the United States, you probably think it's good to be able to get the right kind of crude into your refineries so you can sell it not only here but in global markets. If you're an environmentalist or someone who supports a transition to a lower carbon energy profile in the United States, you probably think it works contrary to what you think is actually in the ultimate best interest of the country."

On the dangers that environmentalists see in the pipeline

"The dangers they see are twofold: one, that it basically makes it possible for larger amounts of Canadian oil sands, which emits more CO2 and greenhouse gases into the atmosphere than conventional based energy sources. The second kind of environmental opposition they have is that it's a major pipeline that would be going through huge portions of the United States — some environmentally sensitive. But that larger question of whether or not it's sort of in our longer-term national interest to be perpetuating the production of this relatively abundant and relatively close-by oil resource, rather than promoting things like clean energy, is really sort of at the heart of the controversy."

On how the Keystone is part of a larger change in the North American energy industry

"In the United States we've now found that it's economically feasible and profitable to produce unconventional oil resources in a number of parts of the country in addition to unconventional gas. So what we've done, essentially, is flipped this scarcity mindset in North America that we don't have enough energy resources to one where we're actually quite abundant in these energy resources."

On how much of the oil from the pipeline will end up in America

"If you want to just track a barrel from when it's produced to when it actually makes it in your car per se, or into your heating fuel in your home, you have to go through a number of processes. One of those is being transported through a pipeline, and the other is being refined in a refinery. And oil is made into a whole host of products. A lot of the gasoline that's made from this oil could stay in the United States and a lot of diesel could be shipped to Europe. That's been sort of the pattern of how we produce and sell the products here. The other issue is that there's currently sort of an oversupply of oil within the midcontinent of the United States. And so a lot of what this pipeline does is it balances out that market a little bit. It allows some of the heavier crude, which is the oil sands, to come down to the Gulf Coast and a lot of the lighter crudes to go to the midcontinent. So whether or not an actual Canadian barrel that goes through the Keystone pipeline in its entirety is consumed in the United States — no, it won't be."

On whether Obama will approve the pipeline

"I do think that he'll approve the pipeline for two reasons: one, because he would have to find a reason why it's against the national interest. And for a country that doesn't have an overarching climate policy, that's hard to say because we believe in reducing emissions we don't necessarily want to be importing a higher-emission fuel. And the second being this has become sort of a political lightning rod to exemplify the debate between pro-oil-and-gas people and anti-oil-and-gas people in this country. And it's not the most effective way of debating those issues. So politically it would be good to get beyond it and get on to a lot of the other things that the president will have to debate within energy policy."

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Transcript

RENEE MONTAGNE, HOST:

And among the big decisions facing President Obama as he begins a second term, is whether to give the go ahead for the controversial Keystone XL oil pipeline. That pipeline would bring oil from Canada down to refineries in the Gulf of Mexico.

Environmentalists want it blocked. Oil companies and their supporters say it's in the national interest.

For more on this, we spoke with Sarah Ladislaw, who is with the Center for Strategic and International Studies.

Good morning.

SARAH LADISLAW: Good morning.

MONTAGNE: How important is the Keystone pipeline to the country's future for energy security?

LADISLAW: It's a really hard question to answer because there's a variety of perspectives involved, right? I mean, if you're an oil sands producer in Canada, then you obviously think it's fairly necessary to have this infrastructure to be able to get your product to market. If you're a refiner in the Gulf Coast of the United States, you probably think it's good to be able to get the right kind of crude into your refineries so that you can sell it not only here but on global markets. If you're an environmentalist or someone who supports a transition to a lower carbon energy profile in the United States, you probably think it works contrary to what you think is actually in the ultimate best interest of the country.

MONTAGNE: What was the problem or danger environmentalists saw in the Keystone pipeline?

LADISLAW: It basically makes it possible for larger amounts of Canadian oil sands, which emits more CO2 and greenhouse gasses into the atmosphere than conventional based energy sources. The second kind of environmental opposition that they have is that it's a major pipeline that would be going through huge portions of the United States, some environmentally sensitive.

But that larger question of whether or not it's sort of in our longer-term national interest to be perpetuating the production of this relatively abundant and relatively close by oil resource, rather than promoting things like clean energy is really sort of at the heart of the controversy.

MONTAGNE: Put this controversy into another context for us because the Keystone is part of a broader and a dramatic change in the North American energy industry. What is that change?

LADISLAW: In the United States we've now found that it is economically feasible and profitable to produce unconventional oil resources in a number of parts of the country in addition to unconventional gas. So what we've done is essentially flipped this scarcity mindset in North America, that we don't have enough energy resources to one where we're actually quite abundant in these energy resources.

MONTAGNE: I'm curious about one thing: If this pipeline, the Keystone XL pipeline, is approve, oil will find its way down to the Gulf Coast, it will be processed there, and one might think then that would bring up the level of oil available in America.

LADISLAW: Mm-hmm.

MONTAGNE: Is that true?

LADISLAW: It's actually a much more complicated answer than that. And so, if you want to just sort of track a barrel from when it's produced to when it actually makes it in your car per se, or into your heating fuel for your home, you have to go through a number of processes. And one of those is being transported through a pipeline, and the other is being refined in a refinery. And oil is made into a whole host of products. A lot of the gasoline that's made form this oil could stay in the United States and a lot of the diesel could be shipped to Europe. That's been sort of the pattern of how we, you know, produce and sell the products here.

The other issue is that there is currently sort of an oversupply of oil within the mid-continent of the United States. And so a lot of what this pipeline does, it allows some of the heavier crude, which is the oil sands, to come down to the Gulf Coast and a lot of the lighter crudes to go into the mid-continent. So whether or not an actual Canadian barrel that goes through the Keystone pipeline in its entirety is consumed in the United States, you can't - no, it won't be.

MONTAGNE: There are those in the oil industry who think for all the controversy, that President Obama will in fact approve the pipeline, and will use as his reason that it's in the nation interest.

LADISLAW: I do think that he'll approve the pipeline for two reasons: one, you know, because he'd have to find a reason why it's against the national interest. And for a country that doesn't have an overarching climate policy, in and of itself, that's hard to say because we believe in reducing emissions, we don't necessarily want to be importing, you know, a higher emission fuel.

And the second being that this has become sort of a political lightning rod to sort of exemplify the debate between pro-oil and gas people and anti-oil and gas people in this country. And it's not the most effective way of debating those issues. And so, politically it would be good to get beyond it but get on to a lot of the other things that the president will have to sort of debate within energy policy.

MONTAGNE: Sarah Ladislaw is a senior fellow and co-director of the Energy and National Security Program at the Center for Strategic and International Studies.

Thanks very much for joining us.

LADISLAW: Thank you. Transcript provided by NPR, Copyright NPR.