The Consequences of Obama’s Punt on the Keystone Oil Pipeline

Canada—not Saudi Arabia or Iraq—is the single-largest provider of America’s imported crude oil and refined oil products. In 2010, it supplied nearly 27 percent of net U.S. petroleum imports and 21.4 percent of all U.S. crude oil purchases abroad, more than the entire Persian Gulf region (18.4 percent), and far more than second place Mexico (12.5 percent) and third place Venezuela (9.9 percent). (By the way, remember those claims that the United States invaded Iraq for its oil? Well, in 2010 Iraq accounted for a mere 4.5 percent of U.S. crude oil imports and only about a quarter of its crude exports went to the United States, less than went to China!) In 2010, the United States imported about 46 percent of its total crude oil consumption (and 49 percent of all petroleum products) and hence Canada supplied about 8 percent of America’s crude oil, almost every twelfth barrel.

The existing Keystone pipeline carries crude oil from the Athabasca oil sands in Alberta to Illinois (since June 2010) and to Oklahoma (since February 2011) and its capacity is about 30 percent of Canada’s total crude oil exports to the United States (or almost 600,000 barrels a day). Its extension, Keystone XL, has been under consideration since 2009 and it received the approval of Canada’s National Energy Board in March 2010. It would transport oil from Alberta by crossing first to Montana and then to Nebraska, where it would connect to the existing Keystone line to Oklahoma and a further extension would then reach the Gulf Coast refineries in Texas. The XL line would have a capacity of 700,000 barrels a day and hence the entire Keystone system would move 1.3 million barrels a day, equal to about 13 percent of the country’s total imports of petroleum products and just over 6 percent of its total crude oil consumption in 2010.

Construction of the pipeline has been opposed on a variety of environmental grounds. The planned XL route was to cross assorted “sensitive” areas; a catastrophic rupture would contaminate Ogallala, the country’s largest aquifer; and, most notably, the pipeline would move “dirty” crude derived from Alberta’s oil sands, whose extraction and upgrading uses considerably more energy, and hence emits more carbon dioxide than, the production of conventional liquid oil. As a result, protests against the XL pipeline have been portrayed as protecting a planet in peril and helping to avert catastrophic climate change.