Oil and Natural Gas - Energy Policy Analysis: A Conceptual Framework - page 87

2011, and the proposed Keystone XL expansion pipeline to be completed in 2013. The Keystone
Pipeline is 2,447 miles long, and the Keystone XL expansion pipeline will be 757 miles long
(TransCanada Corporation 2008). The diameter of the pipeline is thirty-six inches (TransCanada
Corporation 2008), and it will have a minimum ground cover of four feet of earth on top of it
(Hovey 2008).
Initial capacity of the Keystone Pipeline was 435,000 barrels per day, which will be increased to
590,000 barrels per day (O'Meara 2010). Keystone XL will add 510,000 barrels per day, increasing
the total capacity to 1.1 million barrels per day. Domestic oil will be added to the pipeline at Baker,
Montana and Cushing, Oklahoma to help move the bitumen to Port Arthur, Texas (TransCanada
Corporation 2008). The original Keystone Pipeline cost US$5.2 billion, with the Keystone XL
expansion slated to cost approximately US$7 billion. Upon completion, the Keystone Pipeline
System will provide about 5 percent of 2013 U.S. petroleum consumption needs and represent 9
percent of U.S. petroleum imports (McDermott 2010).
The U.S. Fish and Wildlife Service issued a biological opinion saying that the only threat-
ened or endangered species likely to be affected by Keystone XL is the American burying beetle
( Nicrophorus americanus ), known as the ABB. According to the agency, “After reviewing the
current status of the ABB, the environmental baseline for the action area, the effects of the pro-
posed action, and the cumulative effects, it is the Service's biological opinion that the proposed
project is not likely to jeopardize the continued existence of the ABB. No critical habitat has
been designated for this species; therefore, none would be affected.” Moreover, “the proposed
action would not appreciably reduce the survival and recovery of the ABB because conservation
measures included as part of the Keystone XL Project would likely result in a net increase in
protected ABB habitat” (USFWS 2011, 64, 67). The logic of these two statements is unclear. If
there is no critical habitat designated and it will not be affected, how can that same critical habitat
be increased by conservation measures of the project? If one does not know what the baseline is,
how can one project an increase?
It is unclear what the composition of the material received from the Keystone XL pipeline
will be in Texas. The pipeline environmental impact statement focused on effects of construction
of the pipeline, while largely ignoring its contents (USDOS 2011). Refining heavy oils produces
particulate matter (soot or fly slag) containing unconverted carbon, fused ash, and fused trace
metals, primarily vanadium and nickel. Hydrogen sulfide, ammonia, carbonyl sulfide, hydrogen
cyanide, and sulfur may also be produced while refining heavy oil. If this bitumen was refined in
Alberta, the toxic waste by-products could be returned to the mine site and buried, but there are
no tar sands mine sites for it in East Texas. It is unclear what the benefit is to the United States of
refining Canadian bitumen in Texas.
Bitumen cannot be refined in an ordinary refinery, but requires specialized equipment to deal
with its special characteristics. Merely refining the bitumen in Texas will substantially increase
greenhouse gas emissions and hazardous waste disposal in the United States. Alberta's greenhouse
gas emissions are projected to be nearly six times as large in 2050 as they were in 2006, largely
due to expected development of oil sands (Government of Alberta 2008a), if Keystone XL is built.
One may reasonably wonder why refineries were not proposed to be built in Alberta, alongside
required upgrading facilities, so greenhouse gases and hazardous waste from their bitumen are
emitted there. Moving refined products by pipeline would be much easier, less expensive, and
contribute less degradation of the environment in the United States.
Economist Philip Verleger maintains that construction of the Keystone XL pipeline will in-
crease the dollar costs to American consumers for gasoline and diesel fuel by ten to twenty cents
per gallon, totaling almost $5 billion per year beginning in 2012 or 2013. Most of the increase