Controversial decision awaits as hearings on oil sands pipeline end

McClatchy NewspapersOctober 7, 2011 

WASHINGTON — With the formal debate over on Friday, a decision on an oil pipeline that will cross America's heartland and open up a greater market for Canada's oil sands now rests with Secretary of State Hillary Clinton.

In the last of nine public hearings, people got three minutes each to tell two State Department officials their views about whether the pipeline from the oil sands to Texas refineries is in the nation's best interest.

They spoke of the nation's dependence on oil, the need for a secure source, the risks of pipeline spills, the benefits of pipeline construction jobs, the health risks at both ends of the pipeline and the effects of a relatively high-pollution form of oil on climate change.

For President Barack Obama, the debate also has political weight for the 2012 election. Environmentalists have accused him of going back on promises of cleaner energy and political transparency. They also say that emails and other examples of how Washington works show bias at the State Department in favor of the oil industry.

One speaker on Friday who summed up the pro-pipeline side was Kim Rickard, an official from Montana with the Laborers' International Union of North America. The union wants the $7 billion pipeline because its workers will get jobs building it.

"The reality is, we need the oil, we need it from a friendly nation we can trust, and we need jobs," she said to the cheers of dozens of her union's workers in orange T-shirts.

Alaura Luebbe, 16, urged the two State Department officials to think about jobs from her point of view. A pipeline spill on her family's ranch near Stuart, Neb., "will take away all that we work for," she said.

Others spoke of water pollution threats to people who live downstream from the oil sands, air pollution problems in Texas near the refineries, the mining residues left in large ponds in the oil sands and the destruction of the forest from surface mining or drilling for the oil. Part of the Keystone XL pipeline would cross the Ogallala Aquifer, the source of water for 30 percent of U.S. irrigation and agriculture.

Another area of debate is whether the oil is needed. Oil use has declined in the U.S. from its 2005 peak.

Lester Brown, president of Earth Policy, a research group that champions sustainable energy, wrote in a recent essay that the decline will continue as cars become more efficient or use electricity. He also said that people would drive less as populations grow in cities with mass transit and consumers try to save money by buying less gasoline. He also suggested that the rising popularity of social media and cellphones will cut driving as people socialize electronically.

Still, Americans use far more gasoline than people in any other country — more, in fact, than the next 16 countries combined, including China, Brazil and Mexico, Brown wrote, citing international data.

Canada is the No. 1 U.S. oil supplier. About 9 percent of the 11.8 million barrels a day imported from Canada last year — or about 1.1 million barrels per day — was from the oil sands.

Canada's oil industry projects that oil sands development will grow. The region has 170 billion barrels of recoverable oil worth trillions of dollars.

The Keystone XL pipeline would link the oil sands to the Gulf Coast refining hub for the first time. It would increase the capacity of the existing Keystone pipelines from 591,000 barrels per day to 1.29 million barrels per day.

The refined products, such as diesel, could be sold in the United States or exported.

The pipeline also could be used to transport oil from the Bakken formation in Montana and North Dakota.

Ray Perryman, a Texas economist who spoke at the hearing, said the lower risk and big supply from Canada would help push prices down. Perryman wrote a report for the oil and gas lobby, the American Petroleum Institute, that said the Keystone XL pipeline would produce 20,000 jobs. The State Department's estimate was 5,000 to 6,000.

For environmentalists, a top issue with Keystone XL is the effect of fossil fuel use on the Earth's climate system and oceans. Oil from the oil sands requires more energy to extract and refine than other forms of oil, and so it produces more carbon emissions that warm the Earth and make the oceans more acidic.

The State Department concluded in a report that Keystone XL wouldn't have any effect on the amount of greenhouse gas emissions. It reasoned that the oil sands production would expand anyway because other ways to get the oil to markets would be found.

However, plans for other pipelines to the Canadian West and on to Asia are still on the drawing boards and face strong opposition in Canada. Opponents predict it would take at least 10 years before a pipeline to western Canada would be built. There's strong opposition to it in Canada. Nearly all oil sands exports now go to the U.S.

Environmental groups have charged the State Department with bias, citing emails uncovered by the environmental group Friends of the Earth that suggest exchanges of inside information and cozy relationships between lobbyists and State Department officials.

The group says its "smoking gun" is an email exchange between Marja Verloop, a State Department official in charge of energy at the U.S. Embassy in Canada, and Paul Elliott, a former top official in Hillary Clinton's presidential campaign who became a TransCanada lobbyist. Verloop wrote "Go Paul!" after Elliott told her he'd gotten the support of Sen. Max Baucus, D-Mont., for the pipeline.

Environmentalists also claim that State Department studies are biased because the federal government used the same contractors that oil companies use to do the work.

The energy consulting company that the State Department hired to write its environmental impact statement on the pipeline, Cardno Entrix, also works as a consultant for TransCanada. The environmental report this summer found no significant reasons not to go forward with the pipeline. Cardno Entrix also was hired to run the hearings and collect comments from the public sent by email.

MORE FROM MCCLATCHY

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Check out McClatchy's politics blog: Planet Washington

McClatchy Newspapers 2011

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