Republicans today argued that the promise of lower gasoline prices should spur the Obama administration to swiftly approve a controversial oil pipeline project that would bring more Canadian tar sands crude into the U.S.
At issue is the proposed Keystone XL pipeline, which would allow oil sands crude from Alberta to be delivered to Gulf Coast refineries nearly 2,000 miles away. The $13 billion project would double the capacity of an existing TransCanada pipeline network that now ends in Cushing, Okla.
Supporters say the Canadian crude infusion could slash the amount of oil the U.S. imports from less friendly foreign nations, including Venezuela.
Republicans are pushing legislation that would give President Barack Obama a Nov. 1 deadline to decide whether to grant or deny a permit for the pipeline. At a House Energy and Commerce subcommittee hearing Monday, they argued the administration had dragged its feet in considering the project.
“In a time of oil hovering at $100 due to geopolitical unrest, high unemployment, and $4 gasoline, a pipeline that can eliminate our Middle East imports and create tens of thousands of jobs should be a top priority for any administration,” said Rep. Ed Whitfield, R-Ky., head of the Subcommittee on Energy and Power. “Unfortunately, this has not been the case.”
Rep. Fred Upton, R-Mich., the full panel chairman, said the “project remains held up by bureaucratic indecision and stagnation in the Obama administration.”
TransCanada asked for U.S. approval to build the project nearly three years ago. After environmental studies, the State Department now is accepting public comments about the proposed 36-inch pipeline and is on track to make a final decision about whether approving it is in the nation’s interest by the end of this year. In a draft statement earlier this year, the State Department concluded the pipeline’s construction and operation would result in “limited adverse environmental impacts.”
Democrats argued that Congress shouldn’t short circuit the government’s review process. Rep. Henry Waxman, D-Calif., said the State Department should evaluate the proposal on its merits, “not be ramrodded by Congress into approving a boondoggle for the oil industry.”
Environmentalists say the pipeline would expand the marketplace for a particularly heavy crude that has traditionally been extracted from tar sands through open pit mining, although oil companies are refining less invasive in situ techniques. And they say the pipeline that would carry the crude through the U.S. would snake through Nebraska’s Sand Hills and Ogallala Aquifer — areas where a spill could be devastating.
“Canadian producers must burn vast quantities of natural gas to extract tar sands sludge and then use a lot more energy to process it into something approximating conventional crude,” Waxman said. The result is an oil that, over its life cycle, may emit 40 percent more carbon dioxide than other crude, he said.
Canada is estimated to have 175 billion barrels of recoverable crude oil — more than eight times U.S. reserves and a supply that puts it third worldwide, behind Saudi Arabia and Venezuela. Right now, almost all of Canada’s oil sands crude goes to the U.S. — about 1.1 million barrels per day in 2010.
The proposed pipeline expansion initially would allow an additional 700,000 barrels per day of crude oil to flow into the United States.
That “would provide more flexibility to the U.S. supply system and allow pipeline infrastructure to begin to catch up with . . . the growing flow of Canadian oil and increasing production in the upper Midwest,” said James Burkhard, managing director of IHS Cambridge Energy Research Associates.
But Jeremy Symons, a senior vice president for the National Wildlife Federation, said the project “will do nothing to reduce our reliance on oil from hostile nations.”
Instead, Symons said, the Keystone XL pipeline would give oil companies an avenue for exporting the Canadian crude to energy-hungry China.
“The pipeline will take Canadian oil that is already flowing to America away from U.S. refineries in the Midwest and send it instead to foreign-owned refiners on the Gulf Coast for export,” Symons said.
TransCanada has already acknowledged that the project could limit the ability of “oversupplied” Midwest refiners to negotiate a price discount for accepting the tar sands crude, by creating competition with refineries in Texas that already process similar heavy forms of oil.