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2|Page . It runs from the Western Canadian Sedimentary Basin in Alberta to refineries in Illinois and Texas. Nebraska. Keystone XL. and on to Wood River Refinery in Roxana.147 mi) to the junction at Steele City. and also to oil tank farms and an oil pipeline distribution center in Cushing. Oklahoma. They are:  The Keystone Pipeline (Phase I).  The Keystone-Cushing extension (Phase II). completed in February 2011. and a lateral pipeline to refineries at Houston. Oklahoma. Illinois. Three phases of the project are in operation.456 kilometres (2. The pipeline came to the a greater prominence of attention when a planned fourth phase.  The Gulf Coast Extension (Phase III). completed in June 2010. became a symbol of the battle over climate change and fossil fuels. Illinois.Introduction The Keystone Pipeline System is an oil pipeline system in Canada and the United States. over 3. Texas was completed in January 2014. running 784 kilometres (487 mi) from Cushing to refineries at Port Arthur. and in 2015 was rejected by United States President Barack Obama. commissioned in 2010. running 468 kilometres (291 mi) from Steele City to storage and distribution facilities (tank farm) at Cushing. going online the following year. attracted growing environmental protest. Alberta. delivering oil from Hardisty. and Patoka Oil Terminal Hub (tank farm) north of Patoka. Texas and a terminal will be completed mid-2016.

after more than six years of review. with a shorter route and a larger- diameter pipe. 2015. On January 9. 2015 the House Oversight Committee threatened to subpoena the State Department for the latter's withholding of records relevant to the process since March 2015 and calling the process "unnecessarily secretive". the Senate held a vote and failed to override President Obama’s veto of the bill. starting the official ten-day count towards the bill becoming law without presidential signature. On November 2. the Obama administration announced that the review of the controversial Keystone XL oil pipeline has been extended indefinitely. the Nebraska Supreme Court cleared the way for construction. 3|Page . the project requires presidential permit prior to construction. On January 29.The proposed Keystone XL Pipeline (Phase IV) would have essentially duplicated the Phase I pipeline between Hardisty. his administration's rejection of the fourth phase. The Keystone XL Pipeline bill was not officially sent to President Obama. Despite some records being posted by consulted agencies such as the EPA. water resources and special areas". President Barack Obama rejected the application amid protests about the pipeline's impact on Nebraska's environmentally sensitive Sandhills region. The Keystone XL proposal faced criticism from environmentalists and a minority of the members of the United States Congress. President Barack Obama announced on November 6. 2015. Alberta. In January 2012. 2015. 2015. Nebraska. On February 11. and Steele City. pending the result of a legal challenge to a Nebraska pipeline siting law that could change the route. 2015. the vote was 62 to 37. the Keystone XL Pipeline was passed by the Senate 62-36. TransCanada Corporation changed the original proposed route of Keystone XL to minimize "disturbance of land. On February 24. It would run through Baker. Republicans delayed delivering the bill over the Presidents Day holiday weekend to ensure Congress would be in session if the president were to veto the bill. On June 15. and failed to reach the two-thirds majority required to override a presidential veto. On April 18. where American-produced light crude oil from the Williston Basin (Bakken formation) of Montana and North Dakota would be added to the Keystone's current throughput of synthetic crude oil (syncrude) and diluted bitumen (dilbit) from the oil sands of Canada. 2014. the bill was vetoed and returned for congressional action. the State Department has not responded to the request. Montana. TransCanada asked the Obama administration to suspend its permit application for the Keystone XL. The review by the State Department is ongoing. 2015. Because the XL pipeline crosses the US/Canada border. 2015. However. until February 24. On March 4. the new route was approved by Nebraska Governor Dave Heineman in January 2013. the Keystone XL Pipeline was passed by the House of Representatives with the proposed Senate Amendments 270-152. and on the same day the House voted in favor of the pipeline. Timeline The Canadian National Energy Board approved the Keystone XL pipeline in March 2010. 2015.

TransCanada CEO Russ Girling has described the Keystone Pipeline as "routine". "We can expect no fewer than 2 major spills per state during the 50-year projected lifetime of the pipeline. Stansbury. John Stansbury conducted an independent analysis that provides more detail on the potential risks for the Ogallala Aquifer. which crosses the Ogallala Aquifer in Colorado. Oklahoma. and the Ogallala Aquifer. In his analysis. According to Dr. Critics say that a major leak could ruin drinking water and devastate the mid-western U. The main issues are the risk of oil spills along the pipeline. western Nebraska. and politicians have raised concerns about the potential negative impacts of the Keystone XL project. and Kansas. government to use thinner steel and pump at higher pressures than normal. Opponents claim that TransCanada applied to the U. economy.Issues and Controversies surrounding Keystone XL Environmental Issues Different environmental groups. one of the largest reserves of fresh water in the world. Kansas. TransCanada agreed to change the route and skip the Sandhills. These spills could release as much as 180 thousand barrels of oil each Pipeline industry spokesmen have noted that thousands of miles of existing pipelines carrying crude oil and refined liquid hydrocarbons have crossed over the Ogallala Aquifer for years. which would traverse highly sensitive terrain. and 17% higher greenhouse gas emissions from the extraction of oil sands compared to extraction of conventional oil. and supports $20 billion in agriculture. After opposition for laying the pipeline in this area. under a permit from the Federal Energy Regulatory Commission.3 magnitude earthquake as recently as 2002. The Ogallala Aquifer spans eight states. Its original route plan crossed the Sandhills. in southeast Wyoming. and the Pony Express pipeline. the large wetland ecosystem in Nebraska.S. The Pioneer crude oil pipeline crosses east-west across Nebraska. and Texas. Portion of the pipeline will also cross an active seismic zone that had a 4. Dr. noting that TransCanada has been building similar pipelines in North America for half a century and that there 4|Page . was being converted as of 2013 from natural gas to crude oil. provides drinking water for two million people. eastern Colorado and New Mexico.S. Stansbury concludes that safety assessments provided by TransCanada are misleading. citizens. Nebraska. University of Nebraska professor Dr. Potential for oil spills A concern is that a pipeline spill would pollute air and critical water supplies and harm migratory birds and other wildlife.

It also states that the project will 5|Page . to increase its energy security and reduce its dependence on foreign oil. Anthony Swift of the Natural Resources Defense Council asserted that all but a few of these conditions simply restate current minimum standards.  California bitumen is more GHG-intensive than the oil sands.S. rapid response is key.000 km) of similar oil pipelines in the United States today. This is a debate about whether you want to get your oil from Canada or Venezuela or Nigeria. Canada's Minister of Natural Resources. TransCanada claims that they will take 100% responsibility for any potential environmental problems. one of the dirtiest. We conduct regular emergency exercises. an independent study conducted by the Cornell ILR Global Labor Institute refers to some studies (e." However. In a speech to the Canadian Club in Toronto on September 23.g. most carbon-intensive fuels on the planet" is a step in exactly the wrong direction. arguing that:  The total area that has been affected by surface mining represents only 0.  The oil sands account for about 0. NASA climate scientist James Hansen stated in 2013 that "moving to tar sands.are 200. sharply criticized opponents of oil sands development and the pipeline. According to their website. making it "the safest pipeline ever built. If anything happens on the Keystone XL Pipeline.1% of global greenhouse-gas emissions. We’re ready to respond with a highly-trained response team standing by. while TransCanada had asserted that a set of 57 conditions will ensure Keystone XL's safe operation. However.000 miles (320. and why we practice them regularly. That’s why our Emergency Response plans are approved by state and federal agencies.S. Geopolitical issues Proponents for the Keystone XL pipeline argue that it would allow the U. and aerial surveys every two weeks." Potential for increased carbon emissions Environmental organizations such as the Natural Resources Defense Council (NRDC) also oppose the project due to its transportation of oil from oil sands. regulators so far.S.” The House Energy and Commerce Committee's chairman at the time. "It’s our responsibility – as a good company and under law. Representative Henry Waxman. "indicating either that governments don't understand the situation or that they just don't give a damn. had also urged the State Department to block Keystone XL for greenhouse gas emission reasons. Joe Oliver. needs 10 million barrels a day of imported oil" and the debate over the proposed pipeline "is not a debate of oil versus alternative energy. generate almost 40 times more greenhouse-gas emissions than Canada's oil sands (the coal-fired electricity plants in the State of Wisconsin alone produce the equivalent of the entire GHG emissions of the oil sands).  Electricity plants powered by coal in the U. TransCanada CEO Russ Girling has argued that "the U. 2011. a 2011 study by Danielle Droitsch of Pembina Institute) according to which "a good portion of the oil that will gush down the KXL will probably end up being finally consumed beyond the territorial United States".1% of Canada's boreal forest.S. He also stated that the Keystone Pipeline will include 57 improvements above standard requirements demanded by U.

In 2004.” Economic issues Russ Girling. Earl Hatley. The US Gulf Coast has a large concentration of refineries designed to process very heavy crude oil. as overall Venezuelan exports have dropped. it will increase gasoline availability to the Northeast and expand the Gulf refining industry. buildings.” Another proposed solution is TransCanada's Aboriginal Human Resource Strategy.S. The U. which could lead to health risks among their communities. The United States is the number one buyer of crude oil exported from Venezuela. the refineries are dependent on heavy crude from Venezuela. issued in March 2013. At present.900 direct jobs and 42. touted the positive impact of the project by "putting 20. and also as Venezuela seeks to become less dependent on US purchases of its crude oil. TransCanada made a major donation to the University of Toronto"to promote education and research in the health of the Aboriginal population.” Indigenous communities are also concerned with health risks posed by the extension of the Keystone pipeline. TransCanada's Girling has also argued that if Canadian oil doesn't reach the Gulf through an environmentally friendly buried pipeline. estimated 3. TransCanada has developed an Aboriginal Relations policy in order to confront some of these conflicts. structures. The Keystone pipeline is seen as a way to replace imports of heavy oil-sand crude from Venezuela with more reliable Canadian heavy oil. that the alternative is oil that will be brought in by tanker.000 direct and indirect jobs during construction. However.” These numbers come from a 2010 report written by The Perryman Group. which was developed to facilitate aboriginal employment and to provide "opportunities for Aboriginal businesses to participate in both the construction of new facilities and the ongoing maintenance of existing facilities. the volume of oil imported into the US from Venezuela dropped in half from 2007 to 2014.increase the heavy crude oil price in the Midwestern United States by diverting oil sands oil from the Midwest refineries to the Gulf Coast and export markets. and locations with traditional cultural value to Native Americans and other groups. TransCanada had said that development of oil sands will expand regardless of whether the crude oil is exported to the United States or alternatively to Asian markets through Enbridge Northern Gateway Pipelines or Kinder Morgan's Trans-Mountain line. Indigenous issues Many Native Americans and Indigenous Canadians are opposed to the Keystone XL project for various reasons. a financial analysis firm based in Texas that was hired by TransCanada to evaluate Keystone XL. president and CEO of TransCanada. The large trade relationship between the US and Venezuela has persisted despite political tensions between the two countries. According to the Final 6|Page . demolition or removal of "prehistoric or historic archaeological sites. pollution. an environmental activist who has worked with Native American tribes has expressed concern about the environmental and public health impact on Native Americans. However. Locally caught fish and untreated surface water would be at risk for contamination through oil sands extraction. including possible damage to sacred sites. and water contamination. TransCanada's Pipeline Permit Application to the South Dakota Public Utilities Commission states project impacts that include potential physical disturbance. a mode of transportation that produces higher greenhouse-gas emissions and that puts the environment at greater risk. objects. State Department's Preliminary Supplemental Environmental Impact Statement.000 US workers to work and spending $7 billion stimulating the US economy. including crude from Venezuela’s own massive Orinoco oil sands. districts. and are central to the diets of many indigenous peoples.

The expected lack of volume combined with extensive construction cost overruns has prompted several petroleum refining companies to sue TransCanada. TransCanada.S. and is scheduled to take office on January 20. Donald J. Trump was elected as the 45th U. This decision was a major symbolic step in the legacy that Mr. His surprise win in the general election. 2017. “TransCanada remains fully committed to building Keystone XL.” Trump said during a speech on his energy policies to oil-industry workers in North Dakota. oil pipelines to the U.” Trump has vowed that as president he would work with the company on a reapplication for a border- crossing permit. but I want a piece of the profits. defeating Democratic nominee Hillary Clinton. the Pipeline will only create 35 permanent jobs.Supplemental Environmental Impact Statement (SEIS).” Mark Cooper. Glen Perry. After completion of the Keystone XL line.179-mile oil conduit from Alberta to Nebraska. government could get a share of its revenue. has warned that including the Alberta Clipper pipeline owned by TransCanada's competitor Enbridge. the jobs and the tax revenues this project brings to the table. In the United States. said in a statement. announced plans on November 9th to meet with Trump officials to once again pitch the pipeline. Change in Administration As the President. Democrats are concerned that Keystone XL would not provide petroleum products for domestic use." 7|Page . Obama was trying to build on climate change and a sign that he was willing to risk the anger of the Senate to push his environmental agenda. 100 per cent. 2016 has already resuscitated plans to build the Keystone XL pipeline. may run nearly half-empty. “I want it built.S. a spokesman for the company. stating that he would "absolutely approve it. there is an extensive overcapacity of oil pipelines from Canada. a petroleum engineer for Adira Energy.” Trump said in May that he would support the pipeline if the U. held on November 8. “That’s how we’re going to make our country rich again. but simply facilitate getting Alberta oil sands products to American coastal ports on the Gulf of Mexico for export to China and other countries. president in the 2016 election on the Republican ticket.S. Barack Obama rejected the Keystone XL pipeline citing that the environmental concerns could not be compromised with and the multiple issues described above were not projected to be dealt with by TransCanada in a satisfactory manner. the company behind the proposed 1. “We are evaluating ways to engage the new administration on the benefits.

“generate $20 billion in economic impact in the United States.S.000 barrels of oil per day to the US via the existing Keystone Pipeline. Many of North America's oil refineries are based in the Gulf Coast. there are multiple reasons why the bill for the construction of the pipeline was passed by the Senate and why it would be beneficial to the U. economy. The oil fields in Alberta are landlocked and as they are further developed. An increased supply of oil from Canada would mean a decreased dependency on the oil from Venezuela. Middle Eastern Countries and Africa. including $99 millions in local government revenues and $486 million in state government revenues during construction. The infrastructure project would create 42. economic output by $45 billion per year until 2035 and that one out of every three jobs created by oil sands development will be in the United States. Canada already sends 550.Benefits from Keystone XL While the construction of the Keystone XL pipeline is plagued by multiple issues and controversies.000 jobs over a two-year construction period.S.” TransCanada has posited that both the XL and Gulf Coast Pipeline projects are anticipated to have a positive impact on the economy and will. and industry groups on both sides of the border want to benefit. require means of access to international markets. The Canadian Energy Research Institute estimates that the increased production from Canada will “increase U. the US State Department estimates . The numbers shown in the figure are supply of crude in Millions of Barrels Per Day 8|Page .35 of which would remain after the pipeline is built.

decrease USA’s dependency on OPEC countries and lead to creation of thousands of jobs over a two year period. The same poll found the pipeline favored by majorities of men (69%). At this point. 22% government should not approve  USA Today (January 2014): 56% favor. Republicans (82%). 30% oppose  Washington Post-ABC News (April 2014): 65% government should approve. and with the U. Is there an alternate route from Alberta to Cushing. independents (64%). If the pipeline follows the same disputed route through Nebraska. with a change in the presidency. What should be the actions of President elect Trump after taking office to ensure maximum benefits for USA? 2. education. 28% oppose Conclusion The Obama administration removed the hopes of the construction of the Keystone XL taking place. are valid. Deliverables 1. The only group identified by the Pew poll with less than majority support for the pipeline was among those Democrats who identified themselves as liberal (41% in favor versus 54% opposed). 41% oppose  CBS News – Roper (May 2014): 56% favor.Public opinion Public opinion polls taken by independent national polling organizations have shown majority support for the proposed pipeline in the US. The overall results of polls on the Keystone XL pipeline taken by independent national polling organizations are as follows:  Gallup (March 2012): 57% government should approve. economic status. but also handing green advocates one of their biggest victories in recent history. 29% government should not approve  Rasmussen (January 2014): 57% favor. debate over the economics of the project and jobs creation.S. while bringing a huge loss to TransCanada and the economic profits to be gained by both sides. lawmakers set to pass the bill again. Democrats (51%). as well as by those in every division of age. and geographic region. we can agree on the fact that the increased transport of Canadian Oil through American land would lead to increased profitability for both the countries. However. 28% oppose (of likely voters)  Pew Center (September 2013): 65% favor. The reasons for not constructing the pipeline – the potential for multiple oil spills in the Sandhills region and the above the Ogallala aquifer. the possibility of the Keystone XL seeing light at the end of long tunnel seems very likely. but HOW to do it without compromising the future of the planet. geopolitical issues and damage to Native American culture. women (61%). At the same time. A September 2013 poll by the Pew Center found 65% favored the project and 30% opposed. Oklahoma while avoiding geologically and indigenously sensitive areas? 3. we as responsible members of the Oil & Gas industry need to ask ourselves not IF Keystone XL should be constructed. what should be the safety procedures adopted and standards upheld to minimise damage to the Sandhills region and the Ogallala aquifer? (Hint: Use data from the previous pipelines in the area) 9|Page .

while maintaining the same profitability? You are advised to use data and information available in the public domain to come up with creative and innovative solutions to the case study. 4. economic and indigenous issues mentioned above can be eliminated? If yes. Shortlisted candidates will be notified and will be asked to give a presentation of their analysis. Can you think of an alternate method for Canadian oil companies to transport its crude to Asian and European markets. bypassing the American Gulf Coast Refineries. 10 | P a g e . You have to make an abstract consisting of the deliverables of less than 350 words and send it to territude2016@gmail. Do you think the geopolitical. 11:59pm. how? 5.com by 15th November.