Keystone Pipeline

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The following is some rudimentary research I did on the Keystone Pipeline. This is just a starter page sharing that past research, and will be improved upon.

1. Rather than a new pipeline, the Keystone XL would be an expansion of the existing Keystone Pipeline which already goes through Canada (specifically the Alberta, British Colombia, and Saskatchewan provinces) and down through much of the midwestern U.S. including North Dakota, South Dakota, Nebraska, Kansas, Oklahoma, Missouri, and Illinois. keystone-pipeline-map-264.jpg

Oil pipelines are already responsible for 70% of oil shipments in the U.S. according to James Conca of Forbes.

"In the U.S., 70% of crude oil and petroleum products are shipped by pipeline. 23% of oil shipments are on tankers and barges over water. Trucking only accounts for 4% of shipments, and rail for a mere 3%. In Canada, it’s even more lopsided. Almost all (97%) of natural gas and petroleum products are transported by pipelines (Canadian Energy Pipeline Association)."

2. The existing pipelines actually spill less oil than the tanker cars also being used to transport oil into the U.S. according to The pipelines would actually reduce oil spill by transporting the oil in a safer fashion. The oil would be transported regardless but if via rail there would be more oil spills and danger then the pipeline, not less. I'd actually expect this to be better for the environment, not worse, then the alternative method of rail transportation.

Rather than the horror stories Democrats present about what would happen if the pipeline would be built, the existing pipeline is already proving a safer, more environmentally-friendly form of transportation than rail.

3. Many of those states which the existing pipeline runs through are seeing massive job creation due to the oil industry. Many of them have the highest employment rates in the United States, such as North Dakota (1), South Dakota (2), Nebraska (4), and Oklahoma (12). In fact, 3 of the top 4 states with the highest employment rates are existing pipeline states whose job creation is due heavily to the oil industry.

Unlike the broader U.S. which has struggled with unemployment, those pipeline states are trying to attract more workers to their states. North Dakota for example is running an $800,000 ad campaign trying to attract 20,000 workers to the state (which has a 2.8% unemployment rate). According to a CNN article,

"In a new recruiting campaign to be rolled out in May, the North Dakota Economic Development Foundation is aiming to fill more than 20,000 jobs -- ranging from truck drivers and oilfield workers to receptionists and food servers. North Dakota's huge oil boom has spurred thousands of job seekers to flock to the state for years now. In some cities, the population has quadrupled. Yet, the growth continues and companies are still so desperate for workers that the state is teaming up with oil giant Hess Corp. (HES) to launch an $800,000 campaign to attract new talent... Over the past few years, the flood of workers moving to the state -- specifically to the Northwest corner where oil activity is greatest -- has caused a severe housing shortage. In Williston, a town at the center of the boom, home prices have more than tripled and rent there is currently the highest in the nation, according to a new report from Apartment Guide, a website for finding apartment rentals. Even though many employees are now raking in six-figure salaries, they are essentially homeless, living in their cars in parking lots, in other peoples' basements, in RVs or even in churches."

South Dakota in 2012 ran a similar ad campaign seeking to lure workers to the state, with its 2nd lowest 3.4% unemployment rate.

It's hard for me to ignore that the best employment in the U.S. is being caused by the oil industry. Maybe having a pipeline expansion through some additional rural states would boost employment there like it is currently being boosted in North Dakota, South Dakota, and Nebraska. More oil shipped more easily, more refining, not to mention all the other jobs which spring up like restaurant work as well.

4. Low overall cost. Rather than a pricey trillion dollar stimulus bill, the Keystone XL expansion would cost $7 billion, less than 1% of the cost of the stimulus. And it is also well below the cost of the bailouts (which by the way were primarily passed by Democrats, not Republicans). In light of a $3.6 trillion U.S. budget, this would seem like money well spent for job creation. It is not a big spending item like the stimulus bills, the omnibus, or the bailouts of the banking/auto industries, all of which Democrats spent countless trillions on.

5. American energy independence. This would help reduce American dependence on foreign oil. The U.S. actually produces all the oil it needs, and exports more oil than it imports, yet still imports/buys 7 million barrels of oil per day. There is currently a glut of oil in Alaska due to the problems of shipping it to the rest of the United States. No longer would we have to rely on oil from the middle east, enriching those countries at our expense, but the country would become more self-sufficient. This would help us transport Alaskan oil to the rest of the United States.

Countries the U.S. imports oil heavily from include the Cayman Islands, the Persian Gulf, Saudi Arabia, and Venezuela.

6. Should reduce gas prices for Americans. I expect to see lower gas prices throughout the U.S. if such a pipeline were to pass. By reducing the shipping costs for oil you reduce gas prices. I would also expect oil from Alaska and nearby Canada to be more affordable than oil imported from abroad, thus also reducing gas prices. Some of the highest gas prices in the U.S. are in the southwestern U.S.

I would predict gas price decline in states neighboring the area the Keystone would go through such as Wyoming, Idaho, and Colorado, which currently have high gas prices. I also notice that Wyoming and Utah each have 5 oil refineries already, while California has almost as many as Texas. The Keystone XL might pave the way for further pipeline expansion to the western U.S. where gas prices are highest.

7. Would benefit Americans. Rather than the scenario Obama is presenting of oil flowing straight across the U.S. without stopping, the current Keystone Pipeline transports crude oil from Canada to refineries in the U.S. in places like North Dakota, South Dakota, Oklahoma, Kansas, southern Illinois, and Texas where it's then transported for sale across the United States. The reason gas prices are so low in those areas appears to be due in large part to the already-existing Keystone Pipeline transporting oil to their refineries for processing so it can be sold to Americans.

The fact that a major leg of the existing Keystone Pipeline goes through Missouri to Southern Illinois refineries shows me the oil will be distributed to all parts of the U.S., rather than being sent outside the U.S. Checking a map of the Keystone shows it transports oil to refineries in southern Illinois for sale to the broader U.S., which destroys the Obama claim that it is only intended for sale outside the U.S.