By now, most people have heard of the Keystone XL pipeline. It's the source of a bitter, endless fight in Washington, DC. But to many onlookers, it's not always obvious why there's so much fuss about a single infrastructure project.
The basics are easy enough: The proposed pipeline would carry 830,000 barrels of oil per day from Canada's oil sands down to Nebraska. Supporters argue that building it will create jobs and bolster the flow of crude from a friendly neighbor. Opponents say all that extra fossil fuel will exacerbate global warming. The Obama administration, which has final say over the project, has wavered on a decision.
Incredibly, this single pipeline now dominates American politics. On January 29, the Senate voted 62-36 to fast-track approval of Keystone XL — with 53 Democrats and 9 Republicans voting "yes." The GOP-controlled House has already passed a similar bill. President Obama, for his part, has threatened to veto this legislation (and Republicans don't have enough votes to override). That means this fight could continue further into 2015.
Keystone XL is far from the only oil pipeline out there. Nowadays, with the project delayed, oil producers are shipping crude via rail from Canada and building other pipelines instead. (Even with the recent collapse in oil prices, companies are still operating in Canada's oil sands and planning expansions.)
Yet Keystone XL has become a proxy for a much bigger debate about North America's energy boom, which is creating jobs and lowering energy prices, but also threatens to help cook the planet. So what follows is a guide to how Keystone XL became so contentious, why it's becoming less relevant, and how it fits into the broader energy discussion.
1) What is the Keystone XL pipeline?
(Joe Posner/Vox)
Keystone XL refers to a proposal for a 1,179-mile pipeline between Hardisty, Canada and Steele City, Nebraska. It would cost $8 billion to build and carry up to 830,000 barrels of oil per day — mostly from Alberta's oil sands, but also some from North Dakota.
(Meclee/Wikimedia Commons)
To understand what the pipeline is for, we need to take a quick jaunt back to the early 2000s. Oil prices were on the rise, and companies were taking a closer look at Alberta's oil sands (known at the time as "tar sands"). These sands contain bitumen, a gooey type of petroleum with the consistency of peanut butter. It's not easy to extract oil from these sands — either the sand needs to be dug up and heated with hot water and chemicals, or high-pressure steam needs to be injected deep into boreholes. But as long as oil prices were high, this was all worthwhile.
As production boomed, companies needed a way to get this crude oil to refineries who could turn it into usable fuel like gasoline. In 2005, a Canadian firm called TransCanada proposed the Keystone pipeline system — which would ship both synthetic crude oil and diluted bitumen from Alberta to refineries in Illinois and Texas.
Most of this system was built with little fanfare, including a smaller pipeline from Alberta to Illinois. But there was a fourth and final phase: an even bigger pipeline that would stretch down to Steele City, Nebraska, and eventually take 830,000 barrels of crude oil per day to refineries in Port Arthur, Texas (green line, map). That's Keystone XL.
Since Keystone XL crosses the US-Canada border, the State Department has to approve it first. That review process includes both an environmental impact assessment and a national interest assessment. TransCanada applied for a permit in 2008, not expecting much trouble. But a few years later… things got messy.
2) How did Keystone XL become so controversial?
The oil field areas around Fort McMurray, Alberta, Canada. The oil extracted from this area would travel through the proposed Keystone XL oil pipeline. (Photo by Michael S. Williamson/The Washington Post via Getty Images)
Around 2011, Keystone XL caught the eye of environmentalists — including writer Bill McKibben. They noted that oil-sands crude is worse for global warming than regular crude because of all the extra energy it takes to extract. NASA scientist James Hansen warned that burning every last drop of oil in the vast oil sands would mean "game over" for climate change.
This was right at a time when environmentalists were feeling otherwise deflated. The Senate had just nixed a major climate bill. Republicans had taken the House. The prospects for climate action in Congress seemed bleak. But Obama had final say over Keystone XL. So the pipeline became a rallying point for greens — a clear goal they could achieve through pressure on a president who had vowed to address global warming.
Conservatives also took notice. As the administration dithered on a pipeline decision, Republicans argued that Obama was once again holding back the energy industry with red tape. It was an ideal wedge issue in the 2012 election: Polls found that the broader public was overwhelmingly in favor of Keystone XL. But Obama couldn't okay it without angering his environmentally-minded supporters. Hence the controversy.
3) What's the argument for the pipeline?
Oil pumping station in rural Nebraska. (shannonpatrick17/Flickr)
The big-picture argument for Keystone XL goes something like this: The US economy is still massively dependent on oil. And, in recent years, both Canada and the United States have seen a boom in unconventional oil production. That boom has bolstered the economies in places like Alberta (with its oil sands) or North Dakota (with its fracking boom) and is now keeping global oil prices down.
In order to nurture this boom, proponents say, we need to build the necessary infrastructure to ease the flow of crude. The US government shouldn't be randomly blocking private companies from building pipelines. Plus, getting oil from Canada — as the US is increasingly doing — seems preferable to getting it from, say, Saudi Arabia.
(Brookings Institution)
(About 36 percent of US oil imports now come from Canada, though not all of it stays here — many US refineries are increasingly shipping refined fuel abroad.)
There are also arguments more specific to Keystone XL. If the pipeline is blocked, proponents note, companies will just ship crude by rail, which is more dangerous and results in more accidents and spills. (The State Department's environmental impact assessment suggested as much.)
The Keystone XL project would also create some jobs, which is the AFL-CIO's rationale for backing it: The State Department review estimated it would support 42,000 jobs over its two-year construction period — that includes 35 permanent jobs, 3,900 temporary construction jobs, and the rest support jobs or indirect jobs resulting from employee spending. The project would contribute roughly $3.4 billion to the economy, or about 0.02 percent of US GDP.
The pipeline is also broadly popular: One June 2014 poll found that 61 percent of Americans support the project.
4) What's the argument against the pipeline?
An anti-Keystone protest in Madison, Wisconsin. (Light Brigading/Flickr)
Opponents of the pipeline start from a very different place — they look at it from the standpoint of taking global warming seriously.
In order to avoid a drastic rise in temperatures, humanity needs to shift away from fossil-fuels very soon. That means leaving a lot of our current reserves of oil, gas, and coal in the ground. If we burn every last bit of oil and coal we can, we'll do severe damage to the planet and ourselves.
Canada's oil sands get special attention here. Because it takes a lot of energy to extract usable oil from this gooey sand-clay mixture, oil sands are worse for the climate than regular oil. When considered across the entire life-cycle — from mining to use in your car — a barrel of oil-sands crude creates 17 percent more greenhouse-gas emissions than the average barrel of oil used in the United States.
Now, blocking a single pipeline won't shut down Canada's oil-sands industry (indeed, despite the delays in Keystone, oil-sands production grew between 2011 and 2014). So long as there's demand for oil, producers will find a way to get much of that oil to market. Ultimately, the only solution is for everyone to use less oil and find alternatives. But in recent years, environmentalists have focused on the supply side too. Blocking pipelines or shutting down coal plants, they argue, can help hasten that transition.
With Keystone XL, there are also concerns about leaks. In 2010, a pipeline carrying oil-sands crude in Michigan leaked, spilling 843,000 gallons into the Kalamazoo River. Landowners in places like Nebraska are worried about the same happening with this new pipeline. (TransCanada, for its part, says it has new technology to detect leaks — including 16,000 sensors on its existing Keystone pipeline that, in theory, allow it to shut off the flow of oil in 15 minutes. But a State Department review found these sensors wouldn't be able to detect smaller, pinhole-sized leaks.)
Opponents also tend to argue that building Keystone XL won't lower gasoline prices at all, as supporters sometimes claim.
5) How bad would Keystone XL be for climate, exactly?
Giant tabular icebergs are surrounded by ice floe drift in Vincennes Bay on January 11, 2008 in the Australian Antarctic Territory. (Pool/Getty Images)
This is one of the key questions at the heart of the Keystone XL dispute. President Obama has said he will only approve the project if it does not "significantly exacerbate" carbon-dioxide emissions.
If you just look at the pipeline itself, it could have a real impact on emissions. According to the State Department's review, the 830,000 barrels of oil that the pipeline would transport each day would add an extra 1.3 million to 27.4 million metric tons of carbon dioxide to the atmosphere each year.
How much is that? It's the equivalent of putting an extra 250,000 to 5.5 million cars on the road. (Though, as with any single fossil-fuel project, it's marginal in the grand scheme of things — humanity emitted about 36 billion metric tons in 2013.)
But there's a twist: The State Department analysis then went on to argue that most of this oil will get burned regardless. If Keystone XL gets blocked, oil companies will likely just ship the crude by rail or alternative pipelines instead. That's why the State Department concluded that the pipeline itself ultimately wouldn't have a "significant" impact on emissions.
Other energy experts have challenged the State Department's conclusion, arguing that there are all sorts of rail bottlenecks that could hamper oil-sands production if the pipeline is blocked. For instance, deadly train crashes have attracted more attention of late, and future safety regulations could make rail more expensive.
What's more, if oil prices keep plummeting — as they have done lately — then the extra cost of rail becomes a bigger burden for producers. The State Department analysis argued that if oil prices drop down below $75 per barrel, then the lack of Keystone could really start to hurt oil-sands production.
Ultimately, it's hard to say precisely how much extra carbon dioxide the project would lead to. What we can say is this: If Keystone XL is blocked, that will make it harder at the margins for oil-sands producers to get their oil to market. But as long as there's high demand for oil around the world, there will also be pressure to get that oil out, pipeline or no pipeline.
6) Are there other options for shipping Canada's oil?
Yes, though those other options have drawbacks of their own.
In recent years, Alberta's oil producers have been shipping more crude out by rail — about 165,000 barrels per day in the second quarter of 2014. But that's still significantly less than could be transported by Keystone XL. And rail is more expensive and harder to scale up.
Meanwhile, energy companies are building or upgrading all sorts of other pipelines to transport oil-sands crude. There's TransCanada's Energy East project, which will reconfigure a number of natural gas pipelines to carry crude all the way to Canada's east coast. This project doesn't need US approval, although it is running into opposition in Quebec. If finished, it would transport 1.1 million barrels of oil per day — more than Keystone XL:
(TransCanada)
Another company, Enbridge, is in the process of expanding an existing oil pipeline that runs from Alberta to Wisconsin — a pipeline that could ultimately be comparable in size to Keystone XL. Some environmental groups are calling on the State Department to scrutinize this expansion, but it's not getting the same amount of attention.
Enbridge is also proposing a $7.9 billion Northern Gateway project that would transport oil from Alberta's oil sands to western Canada, where it could be shipped to Asia. This one has received tentative federal approval (with conditions), but it's also met steep opposition from First Nations tribes.
These projects don't mean the Keystone XL pipeline is pointless. TransCanada insists that Keystone XL would still be the cheapest way to ship Alberta's oil to refineries in the Gulf. And if it's blocked, that could restrict oil-sands production from expanding to its maximum size. An analysis by Maximilian Auffhammer of UC Berkeley estimated that blocking Keystone XL could force Canada's oil-sands producers to leave 1 billion barrels underground by 2030 — assuming that oil-sands production expands indefinitely (though low oil prices may make this scenario less likely.)
7) Don't these explainers usually have music breaks?
Sure. To give a sense for how much of a cultural touchstone Keystone XL has become, Neil Young and Willie Nelson have been going around holding concerts in support of the anti-pipeline forces. Neil Young even released a song called "Stand Up and Fight," with lyrics about climate change and pipelines and fracking:
I'm not going to claim it's his best work, but it's at least thematically relevant.
8) What is Obama doing about Keystone XL?
Obama, for its part, has given few signals on whether he ultimately plans to approve the project or not. Back in 2013, President Obama vowed that he'd only approve the pipeline if it didn't "significantly exacerbate" climate change — though as we've seen, there's a fair bit of room to maneuver here.
Congress has been trying to speed up the decision, though to little avail. In 2011, House Republicans passed a measure to force Obama to make a decision by February 2012. Obama then rejected TransCanada's application, saying there hadn't been enough time for a proper review.
In response, TransCanada reapplied for a new permit — this time for a route that would go around the sensitive Sandhills region in Nebraska. In January 2014, the State Department completed an environmental impact assessment of this new route, arguing that the pipeline was unlikely to have a significant effect on global warming (and that any oil spill was "unlikely" to affect the key Ogallala aquifer). Secretary of State John Kerry then asked for extra time for other agencies to weigh in.
Everything then came to a halt in April 2014, after a Nebraska court ruled that the state's governor had improperly approved a new route through the state. The Obama administration said it would await the outcome of that court case before making a final decision. But on January 9, 2015, the Nebraska Supreme Court tossed out that legal challenge, which means Obama once again has the final decision.
Lately, Obama himself has sounded skeptical of the project. In a recent ABC interview, he said: "Understand what this project is: It is providing the ability of Canada to pump their oil, send it through our land, down to the Gulf, where it will be sold everywhere else. It doesn't have an impact on US gas prices."
9) I skipped to the end. What happens next?
Sen. John Hoeven (2nd R) points to a chart while speaking at a press conference with (L-R) Sen. John Thune (R-SD), Sen. John Cornyn (R-TX) and Sen. John Barrasso (R-WY) at the U.S. Capitol September 18, 2014 in Washington, DC. (Win McNamee/Getty Images)
Obama is likely to make a decision on whether to approve or deny the pipeline sometime in 2015. And, in the meantime, Congress will likely keep trying to force him to approve it.
The votes have already started: On January 9, 2015, the GOP-controlled House voted 266-153 in favor of a bill to fast-track approval of the pipeline — essentially circumventing the process. On January 29, the Senate voted 62-36 for a similar bill — with 53 Republicans and 9 Democrats voting "yes." The White House, for its part, has vowed to veto these bills. But Republicans are likely to keep trying, perhaps adding Keystone XL-approval legislation to bigger must-pass budget bills.
Ultimately, whether Keystone XL is built or not, the oil-sands industry in Canada is projected to expand next year (even if oil prices stay low). Maybe they'll ship some of that oil via Keystone. Or they'll use rail and other pipelines instead. And in response, environmental groups will turn their attention to rail regulations and possibly blocking other pipelines. The fight over how to deal with the ongoing North-American fossil-fuel boom will continue.
As for global warming, this issue will ultimately be resolved by whether we can reduce our demand for oil, gas, and coal — and scale up workable alternative energy sources. That's a gargantuan task, and the seemingly endless argument over the pipeline is just one small piece of that.
Further reading: How important is Keystone XL in a world of low oil prices?