Keystone XL: A Pipeline to Big Oil Profits

By Jay D. Jurie / The Rag Blog /

On July 25, 2010, a pipeline linking Sarnia, Ontario to an oil refinery at Griffith, Indiana, spilled more than 800,000 gallons of tar sands crude oil into the Kalamazoo River near Marshall, Michigan. According to environmental reporter Kari Lydersen, this spill was ranked by the EPA as the single largest ever in the Midwestern U.S.

Tar sands crude, composed of tar, silica, clay, and other earthen materials, must be diluted with a natural gas-based solvent so it will become sufficiently viscous to flow through a pipe. In this way, natural gas produced by the environmentally-damaging process known as “hydrofracking” may be linked with tar sands development. As reported by Lydersen, when the Kalamazoo River spill occurred, this “diluted bitumen” or “dilbit” released benzene into the atmosphere, requiring nearby homes to be evacuated, some permanently. Because the “dilbit” resembles a light form of tar more than crude oil, it is nowhere near as responsive to traditional mitigation and restoration measures. Having missed an EPA deadline, clean-up efforts by pipeline owner Enbridge, Inc., on 200 acres near Marshall continue more than a year after the spill.

This sort of scenario may be in store for a much larger swath of the Central Plains states and Texas if the Keystone Extra Large (XL) 36″ diameter pipeline with a capacity of 500,000 gallons per day is approved later this year by President Barack Obama. Snaking its way from Hardisty, Alberta, through a corner of Saskatchewan Province into Montana, the pipeline would pass through South Dakota, Nebraska, and Kansas before arriving at terminals in Port Arthur, on the Texas Gulf Coast. Nebraska’s Republican Governor Dave Heineman is among those who have asked President Obama to veto the pipeline, as it would be built over the Ogallala Aquifer, a major plains water source.

Historically known as tar sands, industry now prefers the comparatively sanitized term oil sands. Huge deposits of this naturally-occurring bituminous material are located in the northeastern boreal forest and peat bogs of Canada’s Alberta Province. Most are found along the Athabasca River and in the nearby Peace River and Cold Lake deposits. Estimates of the potential oil reserves range from equal to eight times those of Saudi Arabia.

Unlike conventional Saudi-style petroleum that can be pumped to the surface through wells, tar sands must be extracted through strip mining. Since these deposits are found underneath about 54,000 square miles of Alberta, this process potentially exposes a huge amount of land and water to substantial and lasting environmental damage. As with mountain-top removal, “remediation” in the best post-mining scenario is only an approximation of the original topography and ground cover. Covering some 120 square miles, Syncrude Corp. operates the single largest mine of any sort in the world. This mine and others have already turned sizable chunks of Alberta into toxic, oily moonscapes.

Through the various phases of mining and processing, tar sands production releases considerably more greenhouses gases than does conventional petroleum. Due to operations presently under way, Canada has already raised its gas emissions substantially, and is consequently out of compliance with the Kyoto Protocol, to which it is signatory. Under the conservative Stephen Harper government, this may help explain why Canada refused to support an extension of the protocol in June of this year. Petroleum exports are not only important to Canadian corporate interests. U.S. Energy Information Administration data shows that in terms of either crude or total petroleum, Canada has become the single largest supplier of oil to the U.S., ahead of Saudi Arabia and Mexico.

Demand for tar sands oil is not driven exclusively by market forces, but is actively promoted by those who have a self-interest in keeping western society on the “hard energy path” for as long as it remains profitable. Tar sands producers include Albian Sands, composed of Shell Canada, Chevron, and Marathon Oil, and Suncor, which involves Shell, ConocoPhillips, Petro-Canada, and Husky. Another major player is Syncrude, Corp., a seven-partner consortium that includes Suncor, Canadian Oil Sands, Ltd., Nippon Oil, Japan’s major oil firm, Sinopec, representing Chinese interests, Imperial Oil, which is a subsidiary of ExxonMobil, and Murphy Oil, which is associated with Wal-Mart.

Involvement of Japanese and Chinese interests with tar sands mining may tie directly into the Keystone XL pipeline. Whereas most of the tar sands crude refined in the Midwest are destined for the U.S. market, according to Texans Against Tar Sands, much of the crude flowing through the Keystone XL pipeline will go to foreign-owned refineries on the Gulf Coast for export.

Others involved include the Koch Brothers. Environmental writer David Sassoon has pointed out that Koch Industries, through its subsidiary Flint Hills Resources Canada, Ltd., imports about 250,000 barrels of tar sands oil per day to the Pine Bend Refinery it owns near St. Paul, Minnesota. Pine Bend processes approximately 25% of the tar sands crude the U.S. currently receives from Alberta. According to Sassoon, Koch Industries is poised to become a major beneficiary of the Keystone XL pipeline if it is completed.

ConocoPhillips and TransCanada are partners in the construction of the Keystone XL pipeline. Estimates for the construction cost of the pipeline range from 7 to 13 billion dollars. Political observor Joe Jordan, and others, have pointed out the influential role Paul Elliott, TransCanada’s main Washington, DC, lobbyist, played in Hillary Clinton’s 2008 presidential bid. In December 2009 Elliott was named as a director of the Canadian American Business Council, which also included ExxonMobil and Shell. On August 26, 2011, under now-Secretary of State Hillary Clinton, the U.S. State Department found that the proposed Keystone XL pipeline would have a “minimal” environmental impact.

Former NASA scientist Jim Hansen has argued that if tar sands development continues and the pipeline is built, it is essentially “game over” for climate change and efforts to slow global warming. Reflecting the choice between “hard” vs. “soft” energy paths first described by Amory Lovins in the 1970s, Hansen remarked that “…if the United States is buying the dirtiest stuff [tar sands], it also surely will be going after oil in the deepest ocean, the Arctic, and shale deposits; and harvesting coal via mountaintop removal and long-wall mining.”

Construction of the Keystone XL pipeline would more firmly place the U.S on the “hard” path. Not only would this keep consumers enslaved to Big Oil, but in the long run a dependence on conventional fuels, including tar sands, is unsustainable. Rag Blog contributor Roger Baker has frequently warned of the crisis posed by “peak oil,” whereby continued dependence on a dwindling resource is a recipe for economic and environmental disaster. Funding and support would be diminished for the “soft” path of renewable energy, green economy expansion, mass public transportation, and urban redesign.

Most readers of The Rag Blog are doubtless aware of the civil disobedience organized by the environmental group 350.org in front of the White House. At the end of two weeks of protest, 1252 people had been arrested in opposition to the pipeline and over 600,000 had signed a petition against pipeline construction. It is anticipated there will be further protests as the proposal continues to work its way through the approval process.

Coupled with the insistence that tar sands mining and the pipeline be halted and the “soft” path taken, a campaign for the entire energy sector to be placed under public ownership and democratic control must be launched and aggressively waged. In the U.S. today there are abundant examples of successful energy production and distribution in the form of “municipal power.” These public utilities offer a relevant model for energy policy as a whole, though decentralization and democratic control need to be enhanced.

Our shared resources and the future of the planet are far too vital for the private market to irresponsibly squander for the sake of short-term profits.

This article is dedicated to Ted Gleichman, a friend from Portland, Oregon, among those arrested, and to all the “Keystone 1252.”

Sources: “Athabasca Oil Sands” entry, Wikipedia; Enbridge.com; Energy Information Administration, “Crude Oil and Total Petroleum Imports Top 15 Countries,” U.S. Department of Energy, August 30, 2011; Ted Glick, “The Tar Sands Action (smile),” Portside.com, September 5, 2011; Joe Jordan, “The Pipeline, Hillary Clinton, and Nebraska Politics,” Nebraska.watchdog.org, December 15, 2010; David Ljunggren, “Canada Reveals It Expects U.S. Will Back Pipeline,” Reuters, September 1, 2011; Amory B. Lovins, Soft Energy Paths: Toward a Durable Peace, NY: Harper Colophon, 1977; Kari Lydersen, “A Year After Pipeline Spill, Tar Sands Oil Still Plagues a Michigan Community,” Oneearth.org, July 25, 2011; Elizabeth McGowan, “NASA’s Hansen Explains Decision to Join Keystone Pipeline Protests,” Solveclimatenews.com, August 29, 2011; “Oil Sands” entry, Wikipedia; David Sassoon, “Koch Brothers Positioned to Be Big Winners if Keystone XL Pipeline is Approved, Solveclimatenews.com, February 10, 2011; Suncor.com; Texans Against Tar Sands, Facebook group; 350.org; TransCanada.com; Eve Troeh, “Keystone or Bust,” Marketplace, Publicradio.org, July 26, 2011.

[Jay D. Jurie was a student at the University of Colorado at Boulder, a member of SDS, and one of the “Boulder 18” arrested as a result of the ROTC demonstrations. Jay now teaches public administration and urban planning and lives near Orlando, Florida. Read more articles by Jay D. Jurie on The Rag Blog.]

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