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Keystone XL Pipeline Protest
Image: picture alliance/AP Photo

Obama vetoes Keystone XL pipeline

Spencer Kimball
February 24, 2015

US President Barack Obama has vetoed legislation that would have green-lighted the Keystone XL oil pipeline. The project has been a bone of contention between environmentalists and the oil industry for years.


After six years of contentious debate and review, US President Obama killed legislation on Tuesday that would have approved the 875-mile (1,408-kilometer) international oil pipeline, using his veto power for the third time since assuming office in 2009.

Exasperated with the approval process, Republicans and conservative Democrats had crafted legislation to circumvent the latest State Department examination of Keystone XL and begin construction.

Under US law, pipelines that cross international borders must be scrutinized by the State Department and approved by the president. Keystone XL, an $8 billion (7.05 billion euro) project of the TransCanada company, would have crossed the US-Canadian border.

Obama refused to back the pipeline before the State Department completed its latest review. So far, the Republican-controlled Congress has proved unable to secure the two-thirds majority needed to override the president's veto.

A recent NBC News/Wall Street Journal poll found that 41 percent of Americans support Keystone XL, while 20 percent are opposed and 37 percent didn't have an opinion. But 61 percent of Americans want to see the review process completed before a decision is made one way or the other, according to a separate poll by ABC News and the Washington Post.

The pipeline would have carried 830,000 barrels per day (bpd) of oil from fields in the Canadian province of Alberta and the US state of Montana to Steele City, Nebraska. At Steele City, the pipeline would have then fed into an already existing portion of the broader Keystone project, bringing oil to refineries on the Gulf Coast.

Impact on unemployment

Supporters of Keystone XL had pitched the pipeline to the public as a major infrastructure project that would create thousands of jobs.

USA Ölprojekt Keystone XL Mitch McConnell und John Hoeven
Senate Republicans, who recently approved the Keystone XL legislation, knew Obama was likely to veto itImage: picture-alliance/AP Photo/J. Scott Applewhite

A State Department report from last year estimated that the project would create or support 42,000 "direct, indirect and induced" jobs during construction. But once complete, the pipeline would support just 50 new permanent jobs, according to the same report.

A 2011 study by the Cornell University Global Labor Institute found that Keystone XL, even in the most optimistic scenario, would have very little impact on US unemployment overall.

"In an economy that has lost millions of jobs since the onset of the recession in 2008, KXL jobs amount to a tiny drop in a very deep bucket," the Cornell report said.

According to Michael Klare, the debate over jobs was mostly for public consumption. The controversy surrounding the pipeline really was a deeper battle over whether environmental concerns should influence American economic and energy policy.

"It's become a rallying cry for those who want to engage in action around climate change," Klare, author of The Race for What's Left, told DW. "It's become the number one target for climate change activists."

"It's become a powerful symbol for Republicans in Congress who view this as excessive intrusion of environmental politics into what should be an economic decision or a national security decision," he said.

Energy independence

For supporters of the Keystone pipeline, expanding oil sands production is one step on the road toward North American energy independence. Canada has 173 billion barrels in known oil reserves, the third largest in the world after Saudi Arabia and Venezuela.

USA Barack Obama Haushaltsentwurf für 2016 2.2.2015
Obama refused to back the Keystone XL legislation, citing environmental concernsImage: Win McNamee/Getty Images

"Canada provides a secure and stable source of oil as opposed to places like Libya, Iraq and the Persian Gulf that are much more politically risky," Ariel Cohen, an expert on energy and geopolitics at the Institute for the Analysis of Global Security, told DW.

"There's a big advantage in developing oil in OECD countries because you have the rule of law, political predictability," Cohen said. "It's a good place to invest."

Some 170 billion barrels of Canada's reserves come from oil sands, a heavier and dirtier form of crude. Canada currently produces 2.1 million bpd of heavy crude from oil sands, a 1 million bpd increase since 2008. By 2020, production is expected to double, totaling 4 million bpd, according to market analysis company IHS.

Climate impact

But for opponents of Keystone, pushing for energy independence by expanding fossil fuel production comes at too great a cost to the climate and the environment. Heavy crude derived from oil sands packs 17 percent more greenhouse gas emissions than normal crude, according to the US State Department's Environmental Impact Assessment.

By contributing to the expanded production of dirty oil sands, Keystone would have an impact on the climate equivalent to putting 5.7 million new cars on the road during its 50-year life span, according to the Natural Resources Defense Council (NRDC).

"It wasn't until Keystone that we were able to bring attention to the fact that the US was basically not even thinking about the climate impact," Danielle Droitsch, Canada Project Director at the NRDC, told DW.

Keystone XL Pipeline
A January 2015 oil spill from a broken pipeline in the US state of MontanaImage: picture alliance/AP Images

Pipeline leaks

The pipeline would also pass through an environmentally sensitive geological formation, the Nebraska Sand Hills and the Ogallala Aquifer. Environmentalists and landowners are concerned about the threat posed to the aquifer by pipeline leaks. The aquifer supports 30 percent of all irrigation in the United States.

In 2010, a pipeline carrying heavy crude from Canadian oil sands leaked more than 800,000 gallons into the Kalamazoo River in Michigan, the largest inland oil spill in US history.

Unlike lighter crude which typically floats on the surface of water, the heavy crude from oil sands sank in the Kalamazoo due to its high density, making it more difficult to clean up. For two years, more than 30 miles of the river were closed off due to the spill.

"We've had to re-write the book on oil spills because they're difficult to impossible to clean up," Droitsch said in reference to heavy crude from oil sands.

Pipeline operator Enbridge has spent some $1.2 billion on the Kalamazoo cleanup and faces a maximum fine of $82 million, according to Inside Climate News.

The already existing leg of Keystone, running from Alberta to Illinois, suffered from 14 leaks in its first year of operation.

"The leak detection system cannot detect leaks that are actually fairly sizeable," Droitsch said. "It's going to be up to landowners to figure out whether that pipeline has leaked."

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