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System Analysis of Keystone XL Pipeline

Gabriel Martinez

Arman Yosal

Tommy Kurniawan

Josia Tannos

CEE 3000

Team 15

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Introduction

This report focuses on fourth phase of the Keystone Pipeline, named Keystone XL. The Keystone XL phase takes the exact same trip as the first phase of the Keystone Pipeline from Alberta, Canada to Steele City, Nebraska, but it takes a more direct route going through the Great Plains of South Dakota and then the Sand Hills of Nebraska. The purpose of the Keystone XL is to be able to respond to an increasing market demand for crude oil. The fourth phase would offer to transport a substantially larger amount of crude oil, 830,000 barrels per day (bpd) compared to 590,000 barrels per day, faster and safer to refineries in Steele City and, eventually, the Gulf Coast (Walker, 2014). This report provides a system analysis of the Keystone XL phase. This includes an analysis of the system’s purpose, functional characteristics, and impacts.

Characterizing the System

Background and Purpose

TransCanada’s Keystone Pipeline is oil pipeline system that transports crude oil from the Western Canadian Sedimentary Basin (WCSB) in Alberta, Canada to several refineries in the U.S. This pipeline consists of four phases (Figure 1), of which only the fourth phase is not operational. Keystone XL pipeline is the fourth proposed phase of the Keystone pipeline. The proposed phase spans 1,897 kilometers from Alberta to Steele City and has the capacity to deliver 830,000 bpd of crude oil. Keystone XL is estimated to transport about 730,000 bpd from WCSB and another 100,000 bpd from the Bakken Shale. (Walker 2014). The Keystone XL phase has been proposed since 2008 and a final EIS (Environmental Impact Statement) was released in August of 2011 (Walker 2014). The project immediately attracted negative attention from environmental agencies and the situation quickly escalated. The Nebraska Department of Environmental Quality (NDEQ) reviewed the 2011 EIS and found that the proposed route ran through a particularly sensitive ecosystem known as the Sand Hills region of Nebraska (Walker 2014). After the NDEQ released their report, Keystone filed for another presidential permit with a new proposed route in early 2012. One big difference between this new proposed route and the previous one is that it did not include the path from Steele city to the Gulf Coast, instead it terminated at Nebraska. Keystone notified the Department of State that it considered the Gulf Coast Project a separate utility and, without the need for a Presidential permit since it does not cross international borders, this portion of the

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original Keystone XL proceeded. Another difference is that it avoided the NDEQ identified Sandy Hills region in Nebraska. The Department of State released another final EIS in 2014 with the new route that avoids the Sandy Hills region (Figure 2). Keystone also released a supplemental EIS, because this project had the potential of having a significant environmental impact. The presidential permit is still being reviewed by the current administration.

The main purpose of this system is to respond to increase demand in the oil market.

Much of this demand is centered on the Gulf Coast near Houston, Texas. There has been an increase in demand for heavy oil (bitumen), which is the kind of oil extracted from the Alberta Tar sands. Keystone XL will connect to the Gulf Coast project via the refinery at Steele City. While most of the demand relating to the oil industry is light crude oil, more U.S refineries want more of the bitumen that Canada extracts from their tar sands (Walker, 2014). Keystone will facilitate the transportation of this kind of oil, as opposed to conventional rail systems, by providing a cheaper cost to oil sands producers. This will also help this specific market grow by cutting shipping costs and encouraging producers to sell more.

Currently, the project is still waiting for federal approval of the new route. This project got caught in political firestorm, which has delayed constructions for over four years. As it stands, the project is being put on an indefinite hiatus. Functional Characteristics

The proposed pipeline will extend from Morgan, Montana to Steele City, Nebraska. This pipeline will extend 1,897 kilometers with 914 millimeters of diameter and will allow delivery of up to 830,000 barrels per day of crude oil. (Walker, 2014) The Keystone Pipeline will include eight pump stations in Canada and 33 in the United States. (TransCanada, 2013) Approximately 15,394 acres of land would be disturbed during the construction. (Walker, 2014) There land will be used to build the pipeline, additional temporary workspace areas, pipe stockpile sites, rail sidings, contractor yards, construction camps, pump stations, delivery facilities, and access roads. (Walker, 2014) TransCanada stated that the Keystone XL Pipeline will use the 41 electric powered pumps, located approximately 80 km intervals, to move oil through the line. The pumps and supporting

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equipment will be located in a small pump station. The pump station will facilitate the movement of the oil along the pipeline.

The pump station will be driven by a 6,500­horsepower electric motor, with each pump station initially having up to 32,000 horsepower of pumping power. (TransCanada) The location of the pump station is determined by pipeline hydraulics and taking account factors such as proximity to local lands, utility power lands, environmental situation, landowner agreements, and land use. The pump stations are designed to be controlled by machine and monitored 24 hours a day, seven days a week. There will be technicians performing routine maintenance during normal working hours. (TransCanada) In ensuring the safety of the project, TransCanada implements new technology for the project. (John, 2013) TransCanada will use high­quality carbon steel with special features that will reduce corrosion and enhance strength and pliability. The pipeline used must be able to withstand impact from a 65­ton excavator with 3.5­inch teeth. (John, 2013) In addition to using carbon steel, the pipelines are protected with fusion­bonded epoxy (FBE) coatings to prevent corrosion. (John, 2013) During pipeline operation, a low­voltage electric current will be applied to the pipe. This electric current called cathodic protection will connect the pipeline to a more easily corroded metal. (John, 2013) This technology is used in bridges, boats, and cars to protect from corrosion. There will also be routine maintenance to check the system performance. The maintenance will include corrosion surveys every six months, airplanes patrol at least 26 times a year, inspection of the pipeline to collect and analyze sediment and water, and internal and external annual report to U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration (PHMSA). (John, 2013) TransCanada will use horizontal directional drilling that allows pipeline construction to take place under areas such as rivers, steep slopes, structures, roads or railway crossings. (John, 2013) By using this technology, TransCanada can prevent damage from flooding or spring run­off. TransCanada will also use automated shut­off valves to protect water crossings. The valves can be closed remotely on either side of the line to prevent contamination. (John, 2013) All pump stations will be located above ground, so they can be easily accessed for maintenance and repairs. TransCanada will also use latest ultrasonic inspection and standard X­ray inspection to confirm the quality of every weld. (John, 2013) Last, TransCanada will use satellite monitoring and leak detection systems to monitor the system. The pipeline will have more than 13,500 sensors to send the flow rates of the oil. The system also includes a back­up computer system in case there is a failure in main system. (John, 2013) Impacts

Environmental

If the Keystone Pipeline project is approved, crude oil will be transported through vital and sensitive ecosystems, such as Ogallala Aquifer in Nebraska. The Ogallala aquifer is, in fact, the largest resource of freshwater in the United States (Walker 2014). The oil will be delivered through the pipeline at a temperature range between 130 to 159 degrees Fahrenheit (Public Citizen 2013). In a ten year study of a pipeline network, California regulators found that the pipeline operating in the range of 130 to 159 degrees Fahrenheit were nearly 24 times more likely to leak than pipelines operating at 70 degrees Fahrenheit (Swift 2013); this is caused by the external corrosion of the pipelines. During the operation of the Keystone Pipeline, the

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chances of oil leaks are not insignificant and, if the pipeline leaks, the water and soil will be contaminated. Moreover if more tar sands are processed and transported, then more greenhouse gases will be produced, since the process to convert tar sands into crude oil sends more carbon dioxide into the atmosphere than conventional oil. As a result, the Earth’s temperature will increase and lead to a climate change. Economic

Keystone XL has several negative and positive impacts. The most important impact it would have on the United States is increased energy security.. This pipeline would help the United States rely less on its oil partners overseas, namely Saudi Arabia, which would drive prices down and create a stable supply of oil. Negative impacts from the project include the disproportionate effect it would have on low income families. The job growth from the Keystone Pipeline will mainly consist of minimum­wage jobs. Even though the Keystone Pipeline is projected to create thousands of jobs, most of those jobs are temporary and will disappear when the pipeline is fully constructed and operational. Social

The Keystone XL pipeline will have both positive and negative impacts on the United and Canada. This pipeline will further strengthen the relationship between the American and Canadian government. It will also ensure a consistent supply of oil for the United States (Terry 2012). However, this project will also have negative impacts on people who live near the pipeline, such as farmers and aboriginal tribes (Parfomak 2013). The pipeline will also interfere with the farmers’ and ranchers’ activities, which could lead to some economic hardships. There is also a potential of damaging recreational areas, national historic trails, and state parks during construction (Skinner 2012) Moreover, this project will lead to fossil fuels dependency in the future, which is not sustainable for the future. Political

Domestically, the Keystone Pipeline has garnered a lot of political attention, due to its controversial environmental implications. Having a democratic controlled executive branch, the Obama administration has spoken out against this project. The Obama administration has made it clear that climate change is a priority, so if it exacerbates carbon dioxide pollution the project will probably not receive approval (Green 2013). On the other side, Republicans have been pushing ahead with their usual oil interests and have tried to force the President’s hand on more than one occasion. This rift in interest, within the main branches of government, not only creates more conflict within the already divided federal government, but it also sends the public mixed messages about climate change. Environmental movements have started to gain momentum ever since Al gore’s Nobel Prize winning climate change presentation, An Inconvenient Truth , so the public sphere is, naturally, struggling with this. Even in red states, such as Nebraska, there are environmental groups fighting against the pipeline (Stangler, 2014). While the controversial nature of the pipeline definitely works against having a sound scientific environment within the

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public sphere, it also helps environmental movements get their voice out there and reach out to groups, such as Millennials.

Foreign relationships are also at stake here. Canada and the United States have had

healthy relationship thus far, especially due to the North American Free Trade Agreement (NAFTA). Canada is not a big player in the geopolitical stage, so having a partner, such as the United States, gives it some leverage. Unlike the U.S, Canada is eager to take advantage of this economic gold mine and has already approved this project. If the U.S were to turn this project down, it could strain relationships between these bordering countries since the U.S is Canada’s biggest trading partner and the tar sands of Alberta is its biggest economic asset (Bridges, 2013). Evaluating the System Performance

Technical Evaluation

This system consists of the Alberta tar sands facility, Steele City, and the multiple pump stations in between these two locations. There are 29 proposed pump stations from Alberta to Steele City (Walker, 2014). Pump stations are designed to increase pressure within the pipeline in case oil slows down too much or gets stuck. Oil is eventually going to lose momentum as it travels down the tube; pump stations are there to help the product move along the pipe.

The Alberta tar sand deposit is the largest known deposit of crude bitumen, or heavy crude oil, in the world. A facility extracts the crude oil from the tar sands to then export it. Steele City serves as to join the first Keystone Pipeline and the Keystone XL to then transport that oil through the Cushing refineries in Oklahoma and then it goes to the Gulf Coast.

The history of oil spills in the past plagues the future of Keystone Pipeline. Many pipelines around the country continue to burst, leak, spill and seep their toxic, corrosive content into the environment. Poor construction practices and ignorance of engineering codes and regulations will make leaks more likely. However, TransCanada CEO promised that the construction and operation of the Keystone Pipeline system would meet or exceed world­class safety and environmental standards. He stated that a very high degree of safety would be applied in the construction of Keystone Pipeline.

Environmental Evaluation

The Keystone Pipeline project has both positive and negative impacts on environment. This subject led to deep discussions between the United States and TransCanada, whether the impacts benefit the United States’ environment or not. Some of the major impacts on environment are climate change, potential oil spills from the pipeline and the effects on water resources and soils and forest.

Climate Change

Since 1880, the Earth’s temperature has increased by 1.5 degrees Fahrenheit (Walker 2014). This is due to the increase in greenhouse gas emissions.

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The greenhouse gases help the Earth to trap the external radiation to Earth, causing the planet to have more energy trapped inside than the energy reflected back to space. Figure 3 shows how the atmosphere traps some of the radiated energy from Earth’s surface. One of the main reasons for the increase of greenhouse gases in the atmosphere is the amount of carbon emissions produced from burning fossil fuels. Conventional means of transporting oil usually consists of rail systems, which burn a lot of fuel. As a result of this and other sources, carbon emissions to the atmosphere have increased.

Transportation

Transporting oil through a pipeline produce less carbon dioxide compared to conventional means of transportation. As a result, if the project is approved, this pipeline could reduce the need to transport oil through trains, which would lead to a reduction of greenhouse gas emissions. On average, rails emit 0.0252 kg carbon dioxide per ton­mile (Lee 2013). The amount of oil exported to US is shown in Table 1.

Table 1. (Walker 2014).

Daily Average (oil barrels/day) Daily Average (gallons/day)

January 2014 305,000 12,810,000

February 2014 286,200 12,020,400

March 2014 285,900 12,007,800

April 2014 263,100 11,050,200

May 2014 143,800 6,039,600

June 2014 202,400 8,500,800

July 2014 236,000 9,912,000

August 2014 229,000 9,618,000

September 2014 270,000 11,340,000

October 2014 351,600 14,767,200

November 2014 283,500 11,907,000

Average 259,682 10,906,636

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On average, there are approximately 11 million gallons of crude oil delivered to the US every day, which is equivalent to approximately 42,000 cubic meters. The density of tar sands ranged from 970 to 1015 kg/m^3 (Hamilton 2005). From the density of tar sands, there are approximately 41,000 to 43,000 tons of tar sand delivered to the US every day. The distance from Alberta to Nebraska is approximately 1,179 miles (Stansbury 2011). So, every day, there are 1,200 to 1,300 tons of carbon dioxide, or 438,000 to 474,500 tons every year, emitted to the atmosphere from transporting the oil from the Alberta tar sands to the United States; this does not include the extraction process needed to extract oil from the tar sands. The overall carbon dioxide emissions from the transportation of crude oil can be reduced by transporting more oil through a pipeline as proposed to conventional methods.

Production Process

The construction period of the Keystone XL is estimated to emit approximately 240,000 tons of carbon dioxide every year (Walker 2014). During the operation, approximately 1.44 million metric tons of carbon dioxide would be emitted every year, which is equivalent to carbon emissions from approximately 300,000 passenger vehicles operating for 1 year (Erickson 2013). Also, the production of the tar sands alone produces three to four times more of carbon dioxide emissions than conventional oil due to more use of energy in the extraction and refining process (Erickson 2013). In total, including the construction and operational process, there will be approximately 1.6 million tons of carbon dioxide emitted to the atmosphere at the first year and 1.44 million tons for the following years. The saved carbon emission from the transportation, however, does not even reach 500,000 tons every year. TransCanada states that the Keystone Pipeline would carry approximately 830,000 barrels of oil to the United States, which is equivalent to adding approximately 6 million of cars to United States (Ramseur 2014).

Oil Spills and the Effects on Water Resources and Soil and Forest Destruction

During the proposal of the first phase of the Keystone Pipeline, TransCanada states that the rate of oil spill from the pipeline is 0.22 per year. By assuming that the pipeline will operate for 50 years, there will be approximately 11 spills during the operation (Stansbury 2011). However, there are 12 spills reported occur from the existing Keystone Pipeline before its first year of operation (Stansbury 2011), which is about 50 times more than the predicted number.

The high number of oil spills will contaminate water resources, which will risk the lives of residents that live nearby. The pipeline will cross major rivers in the United States, such as Missouri River, Yellowstone, and Red Rivers; it will also cross major resources of drinking water such as Ogallala Aquifer, which supplies more than two million Americans (Ramseur 2014). The type of contamination could raise the level of carcinogenic compound in these water sources (Marx 2013). If a spill occurs in Ogallala Aquifer or any other major water resources, the US citizens will have less resource of clean water. Furthermore, the bitumen that leaks from the pipeline is more difficult to clean up than conventional crude oil and the existence of such poisons in the water will threaten the survival of aquatic organisms.

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Soil and Forest Destruction

The tar sands are located underneath the world’s largest intact ecosystem, the Boreal Forests of Alberta (Neuman 2014). This forest serves as an important carbon sink and also supports the populations of many species. This serves as a buffer against climate change as well as food and water shortages (Neuman 2014). However, during the process of pulling the tar sands up to the ground, some parts of the soils are destroyed. In the long run, this process destroys the forest and endangers all the organisms in the forest. The overall anthropogenic activity further disturbs the ecosystem by negatively impacting caribou population around the area (Wasser et. al, 2011). Furthermore, if the project is approved, TransCanada will need more tar sands oil to produce due to the objective of transporting 830,000 barrels of oil every day. The current production is only 260,000 barrels per day. So, more tar sands oil will be pulled up from the Boreal Forest of Alberta, increasing the amount of soil broken up due to this process. In the end, the forest will no longer be a buffer against climate change.

From an environmental point of view, the Keystone Pipeline does not give enough advantages for the project to be approved. On one hand, it reduces the carbon emissions by using other means of transportation. On the other hand, it leads to a huge addition of carbon emitted to the atmosphere. Also, if the project is approved and the pipeline is built, it allows more oil to be transported every day, which could lead to the contamination of water and soil. Approval would also mean that there would be more activity in the Alberta tar sands, which could lead to further degradation of the area. All things accounted for, the project will end up emitting more greenhouse gases than it saves.

Economic Evaluation

The economic impacts of the Keystone Pipeline system must be analyzed through costs and benefits analysis. To determine whether the system is sustainable, from an economic point of view, all economic benefits must outweigh all costs so that the system will have a strong economic basis. The estimated cost of building the Keystone XL pipeline according to TransCanada Corp is 5.4 billion USD. However, the projected cost could increase because of labor agreements, inflation, and pipe maintenances (Droitsch, 2011).

There are several main benefits of this system to both the United States and Canada. The proposed Keystone XL pipeline is designed to link the Alberta tar sands to a new market on the Gulf Coast, which will enable greater access to a global market. This would raise the cost of oil for all Canadian crude, providing a market signal for continued and increased production (Droitsch, 2011). Upon completion, the pipeline will be able to carry 830,000 barrels per day to the United States refining hubs (Walker, 2014). A study from researchers at Cornell University points out that the system will give United States a more stable supply of oil and cheaper source of fuel. By having a more secure source of oil, this pipeline will also make the U.S less reliant on foreign imports, namely from Middle Eastern countries. A steady supply of easily accessible oil will drive down prices for gasoline and other consumer staples (Bradley, 2011). Moreover, there is also economic benefit of keeping domestic fuel prices in check which would help to ease the financial burden on hard­working American families and small businesses.

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Figure 4 illustrates the number of jobs created in each state from constructing the Keystone Pipeline. A huge number of jobs will be during the project’s construction phase. Looking at the economic impact of the pipeline to the communities where this pipeline infrastructure will be built, this project is going to provide these communities both short­term and long­term benefits. The presence of the pipeline construction workers in these communities will stimulate local small businesses, which will, in turn, boost the GDP of both the United States and Canada (Elsevier, 2012). In addition to that, the Department of State estimated that the pipeline would create approximately 42,100 direct and indirect jobs to the communities. Figure 5 illustrates many jobs will be available in each state during the construction of the Keystone XL.

The available jobs from the Keystone project are not only construction jobs, but also include jobs in lodging, food services, transportation, warehousing, and several other segments

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of US economy (Graves, 2013). Figure 5 shows the variation of jobs created from the project. During construction, the spending on the pipeline construction would support approximately $2,050,000,000 in earnings throughout the United States. This project will also generate an estimated $138.4 million in annual property tax revenue for state governments and local entities where the pipeline is located. Other than those benefits, as the United States is the primary consumer of tar sands and the prospect of extensive growth in Canadian exports to Asian markets is a mid­term option at best, Keystone XL is far more likely to drive upstream production than speculative Asian markets (Erickson P, 2014)

While the Keystone Pipeline offers plenty of benefits to the United States and Canada economy, this project also comes up with some disadvantages. It is true that the Keystone pipeline will create a huge number of both direct and indirect jobs to the communities. However, the jobs created from this project are mostly temporary, just as all infrastructure jobs are temporary. The economic impact to the communities who live near the area of the construction will not last forever (Green, 2013).

To decide whether a project is sustainable or unsustainable from an economic point of view, the sum of all benefits must outweigh all the costs. From cost benefit analysis, the Keystone Pipeline offers more benefits than costs. The amount of oil in the world is finite and the future relationship between the United States and countries with major oil reserves, such as Russia, Saudi Arabia, and other countries in the east, is unpredictable, so building this pipeline is a would benefit the United States since it would secure oil with historically close partner. For example, if relationships between the United States and eastern major oil exporting countries breakdown, there will be a significant negative impact to the economy of the United States. Building this pipeline could provide the United States energy security in the future. Overall, the benefits from Keystone Pipeline project outweigh all costs. The system is profitable and sustainable from an economic perspective.

Social Impact Assessment

Farmers/ Ranchers

The Keystone XL Pipeline will cause several social issues for people who live near the pipeline. Farming, ranching, and tourism are major sources of employment along the Keystone XL pipeline’s proposed route (Skinner 2012). There are approximately 571,000 workers are working in agricultural sector in the six states along the route. In Nebraska, 93 percent of total land used by the pipeline is used for farming. Total agricultural output for these states is about $76 billion annually. The pipeline will also cross waterways that are used for drinking water and crop irrigation. If the spills from the pipeline caused contamination of major source of water, it will damage the farmers’ economy severely.

The pipeline construction will also disrupt the farmers’ and ranchers’ activities (Skinner 2012). There will be bulldozers and backhoes to construct the pipeline, which will take time and resources away from farmers and ranchers. After this process, the farmers need to restore the land in order to replant and reuse the land, which could take weeks. Moreover, the farmers might

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lose its organic certification if chemicals used during the construction process, contaminate the land.

Tourism

The pipeline will “cross approximately 90.5 miles of recreational and special interest areas in Montana, South Dakota, Nebraska, Oklahoma, and Texas” (Skinner 2012). The recreational and special interest areas include state public land, state parks, state forests, national historic trails, wildlife management areas, and wildlife refuges. About 780,000 workers are employed in the tourism sector in the states along the Keystone XL pipeline and tourism spending in these states totaled more than $67 billion in 2009. “Keystone XL will also cross six historic trails (including Lewis and Clark, Pony Express, Oregon, and El Camino Real de los Tejas) and two scenic byways that draw tourists from around the world (Big Sky Back Country Byway and Historic Route 66)” (Skinner 2012).

Aboriginal / Land owners

TransCanada will need to deal with some opposition from Aboriginal groups (Hoberg 2012). In this issue, the federal government needs to talk with the tribal councils since the construction of the pipeline will potentially affect culturally or historically significant areas. TransCanada will also have to deal with private land owners in the area. The pipeline will cross over 1,286 miles of private land (93 percent of total route). First Nations and aboriginal groups in Canada oppose this proposal, because a large portion of the pipeline route passes through their territory (Parfomak 2013). The risk of oil spills outweigh the compensation proposed for many First Nation communities along the proposed route. First Nation Rights and Titles are protected by the Canadian Constitution and if the pipeline is approved, First Nation will challenge the infringement of their Rights and Title and oppose the project (Hoberg 2012). Rosebud Sioux Tribe, a Native American tribe from South Dakota, strongly opposed this project (Wheeler 2014). The leader of Rosebud Sioux Tribe stated that this project is an act of war. The proposed route of the pipeline will cross the Ogallala Aquifer, which is the largest North America’s largest fresh water aquifer and it will threaten the lives of the Native American (Wheeler 2014).

TransCanada needs to negotiate with the land owners so the pipeline can cross their lands in exchange for financial compensation. For those land owners who refuse, TransCanada can be given legal power known as eminent domain which can authorize private company, to take the necessary land from private owners with fair compensation, as long as the construction is for public interest (Hoberg 2012). But the use of eminent domain is still questionable since TransCanada is a foreign private company.

Interaction

The United States and Canada have held a, historically, strong relationship. Economically, the two countries interact on a regular basis. There are three types of interaction. First, there are strong links within the energy sector between Canada and United States companies. Both pipelines companies have significant assets in both countries, and there is substantial US corporate ownership of the oil sands (Hoberg 2012). Environmentally, there are some companies who have substantial organizational presence in both countries, such as

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ForestEthics and GreenPeace. Second, both governments’ decision will affect one another. The United States government’s decision in approving this project will affect Canada’s economy in the future (Bridges, 2013). Canada has been actively representing itself in Congress, because this project will let Canada further use their tar sands for economic benefits. Third, President Obama’s decision delaying the approval of the project has influenced the Northern Gateway pipeline, the government of Alberta, and the government of Canada. The Prime Minister Harper is extremely committed to this project in order to have open access to Asian markets. If President Obama approves this project, it will strengthen the relationship between the United States and Canada governments (Bridges, 2013).

Energy Security / Sources

The Keystone XL Pipeline project could help the United States depend less on foreign inputs from Mexico, Venezuela, the Middle East, and Africa. This pipeline will help the United States secure energy. With decreasing production in Mexico and Venezuela, political issues in Middle East, and increasing production in Canada, Canada export the most reliable choice (Terry 2012). About 40 percent of oil used by United States is come from the Middle East, which poses a problem for the United States. In 1973, the Organization of the Petroleum Exporting (OPEC) cut off oil exports for six month because of U.S. military aid to Israel. As a result, goods and food prices increased drastically and many companies went bankrupt (Terry 2012).

Even though increased oil exports from Canada will ensure the oil to the United States, tar sands are non­renewable energy. The renewable energy such as wind and solar energy creates more jobs than non­renewable energy. For every $1 million invested in renewable energy, 16.7 jobs are created. By contrast, for every $1 million invested in fossil fuels, only 5.3 jobs are created (Skinner 2012). Investing in renewable energy will produce three times more jobs than in fossil fuels.

Political Assessment

The political environment that surrounds Keystone XL is very chaotic. Domestically, it involves a standoff between the growing environmental movement and the traditional energy corporations. Internationally, the problem revolves around the political relationships between Canada and the United States. To properly assess the political environment around this project, it is necessary to take a look at the domestic political sphere as well as the foreign political sphere.

Domestic

The political situation in the United States is polarized. The Democratic and Republican bases have taken their usual stances on issues that involve the environment and oil. However, recent polls show that democrats on Capitol Hill might be changing their minds on the pipeline. Republicans have been pushing for the Obama administration to make a choice on the Keystone XL to no avail as it is now indefinitely postponed. Now it seems more unlikely that the Obama administration is going to decide whether to grant a federal permit to Keystone this year due to highly competitive mid­term elections, which might spill into 2015 with some January run­offs. Another reason it will probably not get decided before mid­term elections conclude is that Dave Domina, a well­known activist against Keystone XL, has challenged the a certain piece of

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legislation that passed in Nebraska’s legislature during the hearing process of the project. The case was taken up by the Nebraska’s state Supreme Court and, apparently, the court’s schedule won’t allow them to settle the case before mid­term elections.

This project, like many others, has been used as a platform to speak on behalf of climate change, which is an issue that conservatives and liberals are divided on. This sends the public mixed signals and divides the public sphere along with the political sphere. Usually this would be easily counteracted by simply researching, but opponents of climate change have outdone themselves when it comes to spreading fringe conspiracy theories and supposed scientific literature that debunks the notion of climate change. This could act as a catalyst for further division.

At the same time, this project is also driving environmental movements forward. Environmental movements have been gaining a lot of ground, especially since Al Gore. This project serves gives environmental groups an unprecedented platform to speak on. Examples of this growth can be found in red states, such as Nebraska (Stangler, 2014). Even in these conservative territories, environmental groups, such as Bold Nebraska, are growing.

Foreign

Canada and the United States have been long time partners under NAFTA, so preservation of this relationship is, needless to say, important to both. Canada has already approved the project and is rather eager to take advantage of one of its most valuable economic resource (Bridges, 2013). The United States is Canada’s top trading partner, especially for oil, so naturally Canada would look in our direction to produce and sell more oil. Canada is the largest exporter of crude oil to the United States, so both sides have an interest in keeping a healthy relationship with the other. Canada doesn’t want to lose its greatest partner, which happens to be the wealthiest country, and the United States doesn’t want to lose their main influx of crude oil, especially since it is cheap due to NAFTA (Bridges, 2013). Rejection of this project could mean lasting negative consequences in this relationship, since it would prevent Canada from taking full advantage of their greatest leverage. This could either further secure energy, which a big issue in the U.S, or it could lead to further dependence for oil overseas.

Sustainability Evaluation

Overall, the system is not sustainable. Keystone XL suffers from too many caveats environmentally and politically. Environmentally, there seems to be too much risk involved in this project. From the Ogallala aquifer the climate change, this project underscores some of the reasons fossil fuels need to be replaced. Like it or not, the world needs to start pulling away from fossil fuels or we risk furthering the pollution of this planet. The extraction process of bitumen from the Alberta tar sands produces a great amount of carbon dioxide and GHGs. These chemicals have a long lifecycle up in our atmosphere, which is why it’s better to not procrastinate as it compounds. Sustainability is often defined as stability for future generations. With this in mind, the long term consequences of this project’s role in climate change are enough to deem it unsustainable as a whole. This is not mentioning other issues, such as a spill near the largest fresh water aquifer the United States. From a political perspective, this project has become extremely chaotic. As people catch on to the facts behind climate change,

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environmentally friendly advocacy grows and with that grows a natural opposition to projects like these. Oil itself is not sustainable resource, so environmental groups are fighting for renewable energy sources for the sake of future sustainability. The United States’ government is stuck between international relationships with Canada and a growing domestic resentment for projects such as these. From a social perspective, the system seems to be unsustainable as well. The proposed route passes over key spots for tourists, aboriginals, farmers, and ranchers. This could hurt any of these groups in a myriad of ways (e.g. financially, culturally, etc.). Even though the U.S would further their goal for energy security, it would not be worth destroying other cultures and other people’s way of living, especially when there are clear energy alternatives that would work. From an economic perspective, the system is sustainable. This pipeline would allow more oil to be transported faster into the United States, which would lead to more profits. This pipeline also cuts the shipping cost of producers, which, not only leads to an increase in profits, but it also helps to grow the market as a whole. The Keystone XL is only sustainable economically, while it is environmentally, politically, and socially unsustainable. The system as a whole is unsustainable.

Improvements to the System

The system is not reconcilable, because it was inherently made to carry an unsustainable source of energy. Assuming that oil was sustainable, improvements would focus improving the extraction method of tar sands as to trap more of the resulting chemicals, so they don’t get to the the atmosphere. Another suggestion for improvement is to take extra precautions, such as extra reinforcement, near environmentally sensitive areas, such as the Ogallala aquifer.

Limitations of Analysis

The main limitation of this report is that the Keystone XL hasn’t been built yet, so the data presented and used are projections instead of real time performance.

Conclusion

The Keystone XL phase is not an overall sustainable system. It carries too much of an environmental risk with climate change and environmentally sensitive areas. It became a big political mess for the current administration; in fact so much so that the decision to grant it a permit was delayed and will probably not be decided those year due to the project’s potential to sway voters one way or the other in mid­term elections. The proposed route goes over lands, where it would interfere with tourism, farmers, ranchers, and aboriginals. Economically it would lead to increased profits, sustainable relationship with Canada, and energy security. Even though the system is economically sustainable, it is environmentally, politically, and socially unsustainable. The system as a whole remains unsustainable.

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