For more than ten years, the Keystone XL Pipeline has consistently made headlines throughout the world. Many commentators in the political and economic spheres hailed the enormous project as a critically important economic stimulant for the nation.
On the other hand, those opposed to the project cited land ownership rights and environmental concerns as justifications for not moving further.
The project is currently at a standstill in terms of new developments, but a legal dispute still exists as a result of the back-and-forth agreements made over the project by three US presidents. With this knowledge in mind, it is simple to comprehend why the Keystone XL pipeline is such a contentious subject.
The Keystone XL Pipeline: What Is It?
A contentious international building project is the Keystone XL pipeline. If constructed, the subterranean pipeline would cover a distance of more than 1,000 miles between Canada and the United States and transport crude oil from Canada’s isolated oil reserves in Alberta to already-existing pipelines that lead to the Gulf of Mexico.
There is currently a Keystone pipeline, and the Keystone XL will be a larger version of it that will run parallel to it in some locations. The Keystone XL pipeline’s backers claim that it will help the economy because it would reduce the need for oil imports from the Middle East by increasing the flow of North American crude to the Gulf of Mexico’s more established refineries. Many believe that this shift will result in lower oil and gas prices for the typical North American consumer.
The Keystone XL Pipeline’s past
Although it was a significant problem for three American presidents, the Keystone XL pipeline is ultimately a commercial undertaking. TransCanada Energy, a Canadian energy company, is leading the project, and other American oil companies have also committed to pay for a share of the pipeline’s development. The pipeline has been a contentious political issue for America and Canada even though no government finance was required, as it requires government clearance for a multinational construction project.
The Canadian leg of the pipeline received permission from Canadian energy officials in 2010, but American approval has been a more hazy process. The legislation that would have permitted the Keystone XL pipeline to be built on American soil was vetoed by President Barack Obama in 2015. In his veto, President Obama noted the Environmental Protection Agency’s (EPA) firm stance. The EPA asserted that calculations used to estimate the pipeline’s economic impact were flawed and that the project would irreparably halt efforts to achieve the country’s greenhouse gas emission reduction targets.
President Donald Trump’s government received a revised construction proposal from TransCanada in 2017, and the project was accepted. That choice was short-lived, though, as the permit was cancelled by President Joe Biden in 2021.
TransCanada Energy formally terminated the project in 2021 after a decade of on-again, off-again status with no work being done. Even though the Keystone XL pipeline’s construction will not proceed, the legal dispute still persists. TransCanada Energy declared intentions to demand $15 billion in damages from the United States in July 2021. In November 2021, the business submitted a NAFTA claim. Until NAFTA rules on the issue, TransCanada Energy has explicitly said that it will stop responding to public comments on the subject.
What Is the Controversial About the Keystone XL Pipeline?
Because it affects gas costs, pollution, Native American rights, revenues for multiple big firms, and a lot of politics for two different countries, the Keystone XL project is divisive.
Rising gas prices have been a concern for all of North America throughout the proposed building of the Keystone XL pipeline. The pipeline, according to supporters, would make gas less expensive. Tar sands in Alberta, Canada, may be processed to produce crude oil, but this would only be profitable if a pipeline existed to transport the oil from Canada to the Gulf of Mexico, where there is a larger market. The reasoning was that if more North American oil were available to North American consumers, the continent would be less susceptible to changes in Middle Eastern oil prices. The oil, according to opponents, would be exported rather than sold to American consumers.
Supporters claim that the jobs generated by building the pipeline would stimulate the economies of both Canada and the United States. Some claim that the construction of the pipeline would result in the creation of close to 30,000 jobs, but a Cornell University study found that fewer than 10,000 workers would actually be needed. There were worries that the initiative would leave some American businesses without employees since it would require workers with specific training.
The pipeline’s overall economic impact generated concern as well. There were allegations that it may increase gas prices, at least in the Midwest, rather than cut them. The Midwest of America already relies heavily on Canadian crude oil as a source of gas. The Keystone XL pipeline would make it possible for more Canadian oil to be sold to foreign customers in the Gulf of Mexico, reducing the amount of oil available to the Midwest and probably raising prices.
Several opponents of the project highlighted environmental issues. Because of its unique characteristics, tar sands oil is more likely to leak from pipelines, and TransCanada’s current American pipeline already has leaks. More greenhouse gases are produced during the mining of tar sands and oil production from them than during the production of other fossil fuels.
The projected route of the pipeline and the mining operations that would supply it were expected to disrupt First Nations and Native American tribes’ territory in both Canada and the United States. The pipeline would obstruct in some places tribes’ peaceful use of land they were granted through lengthy treaties.
Political, social, environmental, and economic discussions around the Keystone XL project have taken place. Every disagreement was met with a counterargument from one side or the other. The building of the pipeline appears to be finished at this time. It is uncertain whether it will continue to be that way given TransCanada’s persistence, a forthcoming NAFTA decision, and the recent spike in gas prices.