Damned if we do, damned if we don’t – this is the CliffsNotes version of the ongoing Keystone XL pipeline debate. President Barack Obama recently halted TransCanada’s proposed Keystone XL tar sands pipeline project, which would bring tar sands crude, or dilluted bitumen (“dilbit”) from Alberta through the heart of the U.S., to Gulf Coast refineries near Port Arthur, Texas, where the oil would then be exported to the global market.
Most environmental organizations declared victory and suggest the Keystone XL pipeline is dead. Unfortunately, this is far from the case. Republican House Majority Leader John Boehner (R-OH) recently told The Hill he may attempt to rope the pipeline into the next payroll tax extension. Furthermore, a recent Congressional Research Services (CRS) paper said that under a little-used Consitutional clause, the two chambers of Congress, rather than the White House, could have the final say on the pipeline’s ultimate destiny. CRS explained,
[I]f Congress chose to assert its authority in the area of border crossing facilities, this would likely be considered within its Constitutionally enumerated authority to regulate foreign commerce.
Because the pipeline crosses the U.S.-Canada border, many thought that the U.S. State Department, and by extension the White House, had the final say in the manner. This may no longer be true.
On the other hand, even if the Keystone XL becomes a “pipe dream,” the grass isn’t necessarily greener on the other side.
Enter TransCanada’s “Bakken Marketlink Project”
Two days after Obama’s Keystone XL announcement, the Oil and Gas Journal discussed another possible TransCanada pipeline proposal involving the Bakken shale formation. Below is an excerpt (emphases mine):
TransCanada Corp. is considering possibilities for moving Bakken shale crude south to the US Gulf Coast via a stand-alone system following the US rejection of the company’s permit application for the Keystone XL crude oil pipeline. TransCanada had originally envisioned moving Bakken crude south as part of Keystone XL, concluding a binding open season for its Bakken MarketLink Project in early 2011.
Options for moving Bakken crude south could include…modification of Bakken MarketLink plans to route Bakken production to the existing Keystone pipeline, already delivering Canadian crude to Cushing, Okla. TransCanada declined to comment on specific possibilities, saying that discussions need to occur with customers and nothing has been finalized.
The Bakken Marketlink Project was originally intended to connect the Alberta tar sands to the Bakken Shale oil and unconventional gas production project, via the Keystone XL Pipeline.
Keystone XL would have carried a dirty trio of oil, unconventional gas, and bitumen to a refinery in Cushing, OK, a current key pitstop for TransCanada’s existing Keystone Pipeline. From Cushing, the oil and gas would travel via pipeline to Port Arthur, TX refineries and export terminals and on to the global market.
In his January 18 statement on the Keystone XL, President Obama indirectly mentioned the Bakken Marketlink project, as well as the idea of extending the existing Keystone pipeline from Cushing to the Gulf, stating,
In the months ahead, we will continue to look for new ways to partner with the oil and gas industry…including the potential development of an oil pipeline from Cushing, Oklahoma to the Gulf of Mexico…and invest in alternatives like biofuels and natural gas.
The Bakken Marketlink would fulfill both the Cushing extension and the fracked natural gas prongs of the Obama statement.
Some day maybe we’ll pursue a real clean energy future. Until then, it’s “pipe dreams” for the foreseeable future.