International Trade

At Long Last—A Presidential Permit for the Keystone XL

President Trump granted the permit necessary to complete the Keystone XL Pipeline. Traversing almost 1,200 miles between northern Alberta and refineries on the Texas gulf coast, the pipeline is expected to carry up to 830,000 barrels of crude oil daily. Other hurdles still remain for final completion, including approval by Nebraska’s Public Service Commission which is expected in September. However, this is a significant step.

Keystone XL approval has been far too long in coming. It is one of the most studied construction projects in U.S. history having undergone multiple federal reviews. Federal findings refute the arguments made by the pipeline’s opponents, which appear to be more symbolic than real. According to the State Department’s Environmental Impact Statements, the pipeline itself would have little to no impact on Canadian oil sand production rates or on global oil consumption. Even then, President Obama acknowledged that Keystone XL “… became a symbol too often used as a campaign cudgel by both parties rather than a serious policy matter,” conceding that construction would have little effect on climate change one way or the other. In contrast, the reasons to proceed with the Keystone XL are compelling and real.

The Keystone XL Pipeline is environmentally sound. The environmental impact statement released by the State Department in August 2011 observed that the Keystone XL will “have a degree of safety over any other typically constructed oil pipeline under current code and a degree of safety along the entire length of the pipeline system similar to that which is required in High consequence Areas.” And despite the controversy surrounding the project, the Keystone XL would add less than one percent of additional pipeline to the 180,000 miles of petroleum transmission pipeline currently traversing the nation. Not constructing the Keystone XL has forced producers to rely more heavily on older, less reliable pipelines and other modes of transport such as rail and barge. According to Platts Analytics, in 2016 an average of two to three trains daily were used to carry oil out of northern Alberta because of pipeline incapacity that the Keystone XL would rectify. Department of Transportation studies have determined that pipelines are the safest way to convey oil, a fact tragically underscored by train accidents involving oil transports.

Oil sands development is a reality, and Alberta will continue to develop it with or without the Keystone XL Pipeline as long as global oil prices are high enough to make production cost-effective. Fortunately, Canada is an excellent steward of the environment. Boreal forest land used for oil sands mining is reclaimed once mining operations have ceased, and Canada mitigates its carbon footprint by imposing a carbon cap, reinvesting revenues into alternative energy projects.

Canada, our second largest trading partner, has exhibited enormous patience and flexibility in seeing this process through. However relations were unnecessarily strained by the previous Administration’s refusal to issue a presidential permit despite Canadian acquiescence to numerous State Department demands. This back and forth over several years prompted the filing of a damages claim by TransCanada under the North Atlantic Free Trade Agreement (NAFTA). It is definitely not in the national interest to alienate a vital strategic ally over what are largely symbolic attempts to combat climate change.

ALEC applauds the issuing of the presidential permit and looks forward to Nebraska’s decision in the coming months. ALEC supported the completion of the Keystone XL early on as reflected in model policy here. ALEC has also led visits to the oil sands region so that state lawmakers could observe extraction operations and safety measures firsthand. Additional articles ALEC has published on the topic can be found here, here and here.

In Depth: International Trade

International trade creates and supports millions of American jobs that offer higher than average wages and drive economic growth. As a testament to the strength of American entrepreneurship, the vast majority of U.S. exporters are not large corporations but small to medium-sized enterprises. Those that doubt the power of global…

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