U.S. State Department Postpones Decision on Keystone XL Pipeline

The United States State Department announced today that it is postponing a decision on whether to grant approval to the proposed Keystone XL pipeline, which would be used to transport oil from the oil sands of Alberta to refineries on the Texas Gulf Coast.  The State Department stated that the purpose of the delay is to allow the Department to consider alternative routes for the pipeline to avoid the Sand Hills region of Nebraska, a region which contains a number of wetland areas.  The Department stated that environmental assessments of alternative routes would not be complete until 2013.  Thus, a decision on the Keystone XL effectively is being postponed until after the next Presidential election.

State Department approval is required for the pipeline because the pipeline would cross the country's border with Canada.  Environmentalists have opposed the pipeline.  Many have raised concerns about potential pipeline leaks, which they assert could affect the Ogallala Aquifer and sensitive wetlands areas.  But much of the opposition is driven by many environmentalists' opposition to the development of oil sands (also known as "tar sands").   

As explained in the Oil & Gas Law Brief on May 2, 2011, oil sands are a solid-like mix of clay, sand, water, and bitumen (a black, viscous oil).  To commercially develop this energy source, the oil sands are mined, often in a pit mining process.  The solid material can then be transported to a plant where the oil sands are heated by being mixing with hot water.  This separates the bitumen from the sand and clay.  In addition, it makes the bitumen less viscous, in much the same way that heating syrup will make it less viscous so that it flows more easily.  In an alternative method of production, steam is used to heat the oil sands while they still are in the ground. 

Environmentalists object to the mining process and the consumption of the energy required to heat the oil sands.  Also, they raise objections relating to water use.  In the heating process, several barrels of water are needed for every barrel of liquid bitumen that is produced.  After the process is complete, the water contains hydrocarbons and tailings (fine solid materials).  The small solids require a significant time to settle out of the water, which sometimes is held in large settling ponds called tailings ponds.

Supporters of oil sands development note that much of the world's petroleum resources are contained in oil sands.  If society avoids developing those, it is putting a large portion of the world's oil off-limits.  Further, Canada, a friendly neighbor to our immediate north, has large reserves of oil sands.  Many argue that it is better to import oil from Canada than from some of the other countries that export oil.  Moreover, building and maintenance of the pipeline would produce jobs.  In addition, as noted in the Oil & Gas Law Brief on August 26, 2011, the State Department's Environmental Impact Statement (EIS) concluded that the impact of the pipeline would not be severe if it is built along the currently proposed route.  

The Summary of Findings section of the full EIS states that "most resources would not experience significant impacts" from the proposed pipeline.  The same section states that there would be "adverse effects to certain cultural resources along the proposed Project corridor," but that "mitigation measures have been developed ... to address these adverse impacts."  The Summary of Findings also states that there would be adverse effect to the American burying beetle, raising Endangered Species Act issues, but that Keystone has offered to provide money to acquire habitat area for the beetle, and that Keystone and various government agencies have discussed conservation measures that could minimize potential impacts to the American burying beetle.

Finally, some supporters of the pipeline project have noted that developing any source of energy has some environmental impact.  As reported in the Oil & Gas Law Brief on April 4, 2011, some environmentalists even complain about adverse impacts of renewable energy sources such as windmills, hydroelectric generators, and large solar arrays.

A spokesman for Canadian Prime Minister Stephen Harper expressed disappointment with the delay, and stated that he hopes the pipeline eventually will be approved.


Comments (1)

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Obinna - November 11, 2011 4:08 PM

It's so obvious that this is a political decision. President Obama doesn't want to offend his political base. Environmentalists have huge influence in the democratic party and the president calculates that he needs every support he can get. Unfortunately politics got in the way.

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