Wednesday, 14 Nov 2018
Business

Why is the Keystone XL Pipeline Project so controversial?

Keystone XL, a long-time member of TransCanada Corp. is an $ 8-billion project to build a pipeline from Alberta to Canada to American refineries on the Gulf Coast. He faces years of objections from environmentalists, but was eventually approved by US President Donald Trump. The project now faces another obstacle: the American courts.

1. What is the project?

The Keystone XL pipeline is expected to travel 1,179 miles (1,897 kilometers) from Alberta via three states – Montana, South Dakota and Nebraska – before connecting to an existing oil-to-gas system to the Gulf Coast. . The line would transport up to 830,000 barrels of oil a day.

2. Why do environmentalists object?

Partly because of the nature of fuel – derived from what oil executives call "oil sands" and "bitumen" to geologists. Its production and extraction emit more greenhouse gases than conventional oil and, according to environmentalists, would contribute unacceptably to global warming. They also highlight the risks to the water supply and the general environment of the oil pipeline across the United States. More generally, the Keystone XL pipeline, paving the way for increased bitumen production, would help maintain oil dependency for decades and delay a transition to renewable energy.

3. When did Trump approve the project?

In 2017, his predecessor, Barack Obama, rejected a permit for the project in 2015 after eight years of heated debate. Then, just days after taking office, Trump announced actions to move the pipeline forward. This was not the end of the battle, however. The enemies of the environment have promised to put pressure on the courts. In addition, TransCanada requires government approvals to begin work.

4. Who objects?

Nebraska created legal hurdles for TransCanada during the initial project review. But it was a Montana federal court that suspended the project in November, saying it needed a new environmental review from the US State Department. The decision was taken as a result of lawsuits filed by the Indigenous Environmental Network, the River Alliance and the Northern Plains Resource Council. TransCanada is joining the litigation to defend the permit approval.

5. What is Canada's position?

Prime Minister Justin Trudeau is in favor of building new pipelines – including Keystone XL – but has also taken steps to do more for climate issues in the hopes of defeating opponents of the oil sands and pipelines. Canadian oil has to sell cheaper than US crude because of transportation constraints.

6. How dirty is the fuel?

Fuel produced from oil sands bitumen releases more carbon than conventionally produced fuel, in part because it requires more energy for extraction and refining. The Pembina Institute, a Canadian clean energy group, said the difference could reach 37%; the industry and the government of Alberta say it's more like 6%. Oil companies say that coal plants emit much more carbon dioxide into the atmosphere; Environmentalists say the comparison is appropriate for conventional oil because, unlike coal, both types of crude are used primarily to make fuel for transportation.

7. What is Trump's position?

At the time of his decision in Keystone, Trump had stated that it was "a step in simplifying the process" for oil companies and all those who want to do business in the United States. .

– With the help of Dan Murtaugh.

To contact the reporters on this story: Grant Clark in Singapore at gclark@bloomberg.net, Andrew Harris in Washington at aharris16@bloomberg.net

To contact the editors responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net, Ramsey Al-Rikabi, Paul Geitner

© 2018 Bloomberg L.P.

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