Keystone pipeline

Should President Barack Obama give the green light to TransCanada Corp.'s request to build the Keystone XL pipeline?

The debate is heating up again, following the State Department's recent release of a Draft Supplemental Environmental Impact Statement, which indicated the pipeline would result in no substantial change in greenhouse gas emissions and have little impact on most environmental resources if the company takes steps to protect them.

Many environmentalists remain opposed to the pipeline's construction, while pipeline supporters argue in favor of its economic benefits. All sides continue to state their case to Secretary of State John Kerry, who will make a recommendation to President Obama. Meanwhile, two bills — one in the House, one in the Senate — have been introduced in Congress to transfer the permit approval authority from the president to Congress.

As the now four-year-old debate over the pipeline's future continues, the lack of adequate pipeline infrastructure has helped keep the railroad industry hard at work transporting more of the crude oil that's being drilled out of tight-rock formations in North Dakota and Texas. Carload traffic reflects the surge: Crude oil and petroleum products accounted for the biggest increase in rail-car loadings among commodities in 2012, according to the Association of American Railroads.

So, what impact would construction of a Keystone pipeline have on railroad traffic? Would rail continue to have a role to play in transporting crude oil from shale formations to the refineries if the pipeline gets built? Those questions are behind this week's poll question on progressiverailroading.com. Let us know what you think by voting and/or by responding to this blog post.

2 Replies

  • Unfortunately, the path of the Keystone XL takes it through environmentally sensitive areas and Indian reservations, increasing potential damage from leaks and spills.  Private farmers and ranchers also oppose and resent eminent domain being used for the benefit of a private company.  I wouldn't expect the State Department to publish a more critical and unbiased report on the environmental issues and not side with a foreign government and industries.  

    Certainly, a pipeline would offer a lower cost than rail and be more profitable for the benefiting oil companies compared to costs from other sources; but that cost advantage ignores the public exposure and risk costs.  It's ironic that a substantial tar sand oil field is being developed in West Texas closer to Cushing, OK and Gulf export ports.

    Part of the economic incentive to developing this dirty oil is the government subsidy to the oil industry that puts clean energy sources at a disadvantage.

    Contrary to the hyperbole about energy self-sufficiency, much of the Keystone XL and rail capacity is destined for export.  I don't see export as a bad thing for US and Canadian oil in the overall scheme of sharing the world's resources.

    Just to keep things in perspective, 1b bbls a day already ate moving out of North Dakota alone compared to a capacity of only 0.1b bbls for the Keystone XL.  Now rail certainly isn't exempt from derailments and spills; but it does exploit mostly existing infrastructure and supports other traffic, notably grain and drilling supplies.

  • In reply to HarveyK400:

    I don't think there is any reason, other than other transportation means, for not building the new extensions to the Keystone pipeline.

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