Iowa Public Television


State Department Avoids XL Pipeline Green Light

posted on March 7, 2013

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Economic uncertainties – both at home and abroad – are depressing crude oil prices. In fact, oil prices are near their lows for the year due to lingering concerns about global economic growth and ample crude supplies in the U.S.

Prices at the pump also are on the decline. The national average price of regular unleaded gasoline fell Friday to a 3-week low of $3.71 per gallon.

And proponents of the Keystone XL pipeline say their project will enhance U.S. energy security and create more than 50,000 U.S. jobs. Last week, the proposal moved one step closer to becoming a reality when the Obama Administration announced the controversial project poses little threat to the environment…

The U.S. State Department is the latest government agency to weigh-in on the controversial Keystone XL Pipeline. While federal officials had no major objections they fell short of giving a green-light to the project.

While not recommending approval of the pipeline, the report concluded the project was “unlikely to have a substantial impact” on the environment or oil sands production. Despite the neutral response those opposed to the project continued to express their concern.

The originally proposed route was nearly 1,700 miles long and crossed the environmentally sensitive Ogallala Aquifer in Nebraska. Last year, the state’s Republican Governor Dave Heineman was joined by several Cornhusker state residents who strongly objected to the proposed pathway.

TransCanada, the Alberta based oil company that owns the pipeline, decided to split the project into two sections to avoid further delays. The newly proposed route, truncated by nearly 50 percent, is expected to move tar sands crude 875 miles from Alberta, Canada to Steele City, Nebraska. From the stateside terminal the sour crude will move to Cushing, Oklahoma via the 2-year old central leg of the XL project. The Cushing terminal will pump the estimated 800,000 barrels per day of tar sands oil from Canada and the Bakken in North Dakota to refineries in the Gulf of Mexico via the endeavors southern leg. If all goes according to plan, the project will be completed sometime late this year. Because the newly proposed route through Nebraska avoids the sensitive aquifer Governor Heineman has withdrawn his objection to the pipeline.

The State Department issued the 2000 page opinion because the pipeline would cross an international border. The report concludes the $3.3 billion project would create more than 42,000 U.S. jobs during the two-year construction period. In addition to construction of the pipeline, new electrical transmission and power substations would be required. The project is expected to generate an estimated $65 million in use and sales taxes in the states crossed by the pipeline.

TransCanada has applied for a Presidential Permit which, if granted, would authorize the proposed pipeline to cross the United States-Canadian border. The last permit was denied by President Obama at the beginning of 2012.

A recent Fox News poll shows support for the project reached a new high as 70 percent now support construction and 23 percent are against it. The increase is up from a 67 percent approval rating a year ago.

With the publishing of the report, a 45-day comment period begins allowing the public to have its say on the project.

Tags: Bakken oil reserve Barack Obama Keystone XL Pipeline shale oil tar sands TransCanada Corp. XL pipeline