Photo: AP Images
The U.S. and Canada are still awaiting a decision on the construction of Transcanada’s Keystone XL pipeline, which would deliver cheap Canadian crude oil to the midwest and the Gulf Of Mexico ports.The latest word from Sec. of State John Kerry is that a decision will come the “near term.”
The pipeline comes with the promise of more jobs and higher tax revenues.
However, it’s unclear if it’ll bring oil prices down and increase American energy independence.
However, it also comes with serious environmental risks that have high powered financiers like GMO’s Jeremy Grantham worried.
This pipeline has the country divided.
We want to bring you up to speed on the state of the debate.
Keystone XL offers a way to get that oil to the rest of the world. Much of the pipeline is either already built or underway.
The pipeline will extend from the top to the bottom of the country. Two sections starting from Steele City, Nebraska were completed years ago, and Keystone broke ground on the third one that will extend to the Gulf last year.
But one section — the longest — hasn't been built yet because it crosses the Canadian border, and the State Department and President Obama must approve any trans-national infrastructure projects.
And the State Department has been sympathetic to concerns about the environmental impact of the pipeline.
Among other things, environmentalists are concerned that the pipeline will cross up to 2,000 waterways...
The pipeline would also encourage more development of tar sands, which some view as a highly toxic process...
It's worth noting that Keystone wouldn't really reduce our dependence on Middle East oil, since much of the product would be exported...
However, there are plenty of positive reasons for building the pipeline and unlocking the abundant Canadian crude.
Transcanada claims the Keystone will generate 20,000 jobs, $585 million instant tax revenue and $5.2 billion in property taxes over the life of the project.
Montana, Nebraska and South Dakota already have or are presumed will eventually approve their portions of the controversial section. Nebraska's approval came just a few weeks ago.
Gas prices could increase temporarily in the Midwest, because the additional mid-continent supply would be met with a spike in global demand.
Keystone would have little impact on global Brent oil prices. It would mostly affect WTI (crude) prices.
In sum, the promise of more jobs and higher tax revenue is being pitted against some serious environmental risks.
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