Market News

 June 13, 2013
Keystone XL: the 'Kim Kardashian of energy'?

 Keystone XL plays an outsize role in US energy discourse, earning the nickname "the Kim Kardashian of energy" from one US senator. But Keystone XL serves as an important touchstone for both its supporters and detractors.

If oil pipelines had personalities, the proposed Keystone XL would be a Hollywood starlet. It's always elbowing into the spotlight.

Never mind that the Canada-Texas line would create only about 35 permanent jobs. Or that the tar sands (or oil sands) bitumen flowing through the pipeline would create, by one estimate, a significant but not enormous 17 percent more greenhouse gases on a life-cycle basis than the average barrel of oil. As a political symbol, Keystone XL is hugely important for environmentalists and the energy industry.

"It's the Kim Kardashian of energy," Sen. Heidi Heitkamp (D) of N.D., reportedly said at a conference in Washington Wednesday, referring to the reality TV star. "I don't know why we care."

Those living in the path of the proposed pipeline certainly have reason to care about Keystone XL. For the energy industry, the proposed 1,179-mile oil pipeline represents an opportunity to create jobs and supply the United States with oil from a friendly neighbor. For environmentalists, it's a litmus test for the administration's and America's resolve to cut greenhouse gas emissions.

The furor is likely to persist well beyond the US State Department's release of its final environmental review of the project.

The Sierra Club filed a lawsuit Tuesday against the State Department, accusing the agency of withholding documents from its draft Environmental Impact Statement. Those documents, the suit alleges, demonstrate financial ties between the third-party contractor hired by the government to review the project and TransCanada, the Canadian company behind Keystone XL.

The Sierra Club is one of several environmental groups that have lobbied against the pipeline since 2008, when TransCanada first applied for the presidential permit it needs to begin the transnational infrastructure project.

The pipeline would transport oil from Canada's energy-intensive tar sands (also known as oil sands), which environmentalists say will have disastrous consequences for the planet if mined. Since the pipeline would cross a major aquifer and other ecologically sensitive areas, there's also concern over the possibility of a leak.

Keystone's backers contend its design would make it the safest of its kind, and transporting oil via pipelines emits less net greenhouse gases than the tankers currently bringing crude to Gulf refineries from Venezuela, Mexico, and Saudi Arabia. The project would inject a much needed economic stimulus, TransCanada and oil groups say, and provide a more secure source for fulfilling the country's energy demand.

Those arguments, among others, were on display at a debate between Massachusetts Senate candidates Ed Markey and Gabriel Gomez in Springfield, Mass., Tuesday.

"The Canadians are mining the dirtiest oil in the world," Mr. Markey said, as reported by Politico. "They want to build a pipeline across the United States, where we would run the environmental risk of that pipeline, and then they want to bring that oil down to Port Arthur, Texas, which is a tax-free export zone. And then, they want to export the oil out of the United States while saying that they want to protect the national security of our country by having North American energy independence."

Mr. Gomez, who supports the pipeline, attacked Markey for taking campaign contributions from California billionaire Tom Steyer, a major anti-Keystone activist.

It's a dizzying back and forth for a project that will ultimately result in 42,100 temporary construction jobs, 35 permanent operations jobs, and the equivalent of 626,000 passenger vehicles in carbon dioxide emissions, according to the State Department. Of course, these estimates vary depending on whom you ask.

Keystone isn't likely to get its own reality TV show anytime soon, but its understandable why Senator Heitkamp might liken it to a celebrity whose every move is plastered across headlines. It leaves only one question: If Kim Kardashian is Keystone XL, who is Justin Bieber?