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Domestic Leg of the Keystone XL Pipeline Moves Ahead

But Obama Administration Must Ensure It Is Built Safely and Responsibly

SOURCE: AP/Nati Harnik

Though it denied the Keystone XL permit's route through Nebraska (sandhills near Mills, Nebraska pictured here) in January because there wasn't enough time to analyze the impact, the Obama administration now supports TransCanada's plan to build the pipeline from Cushing, Oklahoma to the Gulf of Mexico, which will “modernize our infrastructure, create jobs, and encourage American energy production.”

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White House Press Secretary Jay Carney expressed support late last month for Canadian pipeline company TransCanada’s plans to build a domestic leg of its controversial Keystone XL pipeline from Cushing, Oklahoma, to the Gulf of Mexico. Carney said that this “will help address the bottleneck of oil in Cushing that has resulted in large part from increased domestic oil production, currently at an eight-year high.”

The Obama administration supports this new leg of the controversial pipeline because moving oil from the Midwest to the world-class, state-of-the-art refineries on the Gulf Coast will “modernize our infrastructure, create jobs, and encourage American energy production.” The oil glut in Cushing, however, has kept gasoline prices a bit lower in the Midwest. Bloomberg determined that once the Cushing-to-Gulf of Mexico leg is completed, this glut and the low prices could end. The Bloomberg report cautions that “TransCanada Corp.’s Keystone XL oil pipeline…risks raising prices as much as 20 cents a gallon in the Midwest, Great Plains and Rocky Mountains.” At the same time, there may be a decrease in gasoline prices in the Gulf region because of the increase in oil supply there.

The administration’s support for building the southern leg is no surprise since President Barack Obama has indicated support before—when rejecting the complete Keystone pipeline in January. After denying the permit in January because there was no time to analyze the impact on air and water pollution from an unknown route through Nebraska, he said, “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.”

Many environmentalists are legitimately concerned that the plan is just a ploy by TransCanada to build the pipeline one piece at a time. Susan Casey-Lefkowitz, director of the International Program at the Natural Resources Defense Council, notes that the pipeline company could “split the Keystone XL tar sands pipeline in two in order to get around the U.S. process to review international pipelines for their national interest.” She is rightly concerned that by splitting the project into two pieces, the environmental impact evaluation required for the international leg of the pipeline will not include a review of the environmental consequences of completing the southern leg.

Importantly, the Keystone XL pipeline project in the end must serve the national interest. This is the standard President Obama is required to ask Secretary of State Hillary Clinton to use when deciding whether to issue the international permit allowing the Keystone pipeline to cross the Canadian border into the United States. And that’s the silver lining in the administration’s reaction to TransCanada’s decision to build the Cushing-Gulf pipeline segment—the administration reiterated that it will make the ultimate decision on Keystone based on a thorough review of its impact on the health and safety of Americans.

Administration spokesperson Carney said February 27 that the administration will ensure that the construction and operation of the Cushing-to-Gulf of Mexico leg proceeds in an environmentally sensible way. In his statement, Carney said he looks forward to working with TransCanada to ensure that it is built in a safe, responsible, and timely manner.

This is consistent with the approach the president applied when denying the international pipeline permit last November and then again this January. He wants to ensure there is “a full assessment of the pipeline’s impact, especially the health and safety of the American people, as well as our environment.” But there are still a number of critical questions to answer during the eventual evaluation of the new route through Nebraska once it is chosen:

  • Will the pipeline construction cause significant air pollution?
  • Will a leak from the pipeline still threaten the Ogallala Aquifer—the lifeblood of Midwestern agriculture?
  • Will a new route jeopardize the Missouri River with potential leaks of thick, dirty tar sands oil?

These and other potential pollution problems of a new route, as well as the impact of the entire project, require a complete evaluation before the president decides whether to approve the permit.

So far, President Obama’s approach to the Keystone XL pipeline has focused on ensuring there is a thorough, independent assessment of the consequences of its construction on air and water quality. This process has already led to two permit denials. This kind of rigorous assessment must continue through the construction of the Cushing-Gulf of Mexico portion of the pipeline, as well as through the comprehensive evaluation of the still-undetermined route from Alberta through Nebraska to its connection with the existing pipeline. Americans deserve no less.

Daniel J. Weiss is a Senior Fellow and the Director of Climate Strategy at American Progress.

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