In 2008, TransCanada Corporation proposed a plan for the longest pipeline in North America, the Keystone XL Pipeline. With a starting point in Alberta’s Oil Sands, the Keystone XL Pipeline would carry the tar-sands crude through the Great Plains to the Gulf of Mexico, bringing an additional 830,000 barrels of oil per day to U.S. refineries.
The pipeline requires approval in two parts: upper and lower. While the upper portion of the pipeline requires U.S. State Department approval since the pipeline crosses an international border, the lower portion will need federal permits for approval. The approval process has been complicated, with environmental, safety and time concerns restricting the project.
In January, President Barack Obama rejected the project, advising the decision was “not based on [the] merits of the pipeline,” but having a short deadline to make a decision on the project. He also cited the need to find a route that would avoid the Nebraska Sandhills region and Ogallala Aquifer, which provides water to eight U. S. states.
TransCanada has been working with the State of Nebraska since November 2011 to find alternate routes that will avoid the environmentally sensitive Ogallala Aquifer and Sandhills, stating it will be reapplying for permission to build the pipeline from Canada to Oklahoma using this alternate route.
Advocates in favor of the Keystone XL Pipeline, argue it will employ thousands of workers, deliver more oil to U.S. refineries in the Gulf of Mexico, reduce U.S. reliance on oil from the Persian Gulf and increase the amount of oil imported from Canada.
While TransCanada pursues a new permit, it will proceed with building the southern portion of the pipeline, from Cushing, Oklahoma to the Gulf of Mexico. This portion is located entirely within the U.S. and therefore does not require U.S. State Department approval.
This 435-mile section of the pipeline is expected to produce several benefits including:
- Moving 700,000+ barrels of oil per day
- Generating approximately 4,000 jobs
- Reducing the large surplus of oil stored in Cushing, OK
With the decision to begin expansion in the south, it is expected pipeline construction will continue on at a steady pace, even during the reapplication process and while alternate route decisions are being made.
If the Keystone XL Pipeline moves forward as expected, U.S. crude imports from Canada could reach 4 million barrels per day by 2020, doubling what we currently import from the Persian Gulf.