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Chris Faulkner: Keystone more than a pipe dream





Once again, the State Department has spoken.

The proposed Keystone XL pipeline, which would transport oil from shale deposits in Canada to the U.S. Gulf Coast for refining, would neither significantly increase emissions nor harm the environment. This is the fifth time the State Department has thoroughly researched the question, and the answer has come back the same all five times: Keystone XL will have a negligible effect on the environment.

Since President Obama has long maintained that approval of this long-delayed project is contingent on the determination that it will not be “significantly exacerbating” environmental problems, there is no scientific basis for further delay. Secretary of State John Kerry could do Americans considerable good by pressing the president to move forward swiftly on the final OK.

The State Department’s report responded directly to many of the concerns expressed by American environmental groups. (In fact, all but 1 percent of the 1.9 million public comments the State Department considered were form letters sponsored by NGOs.)

While it’s true, as critics charge, that oil extracted from the Albertan tar sands is relatively dirty, the report notes that it will be brought to market with or without Keystone XL. In other words, just because Americans may be prevented from buying it, don’t expect the rest of the world to shun this energy bounty. Alberta is home to the third-largest oil reserve on the globe.

Furthermore, as the State Department has noted, developer TransCanada has meticulously charted a risk-mitigation plan, taking extraordinary precautions to ensure that even an adverse incident wouldn’t substantially pollute the land or water surrounding the pipeline.

The State Department also finds that the United States may actually do more environmental harm by refusing to build the pipeline. Keystone XL would transport up to 830,000 barrels of oil a day. Existing infrastructure relies on riskier modes of transportation for shale oil. By the State Department’s calculations, if Keystone XL isn’t approved, additional rail, truck and tanker shipping could result in an emissions increase of up to 42 percent.

While oil imported from distant lands brings only 10 cents in economic benefit on the dollar to Americans, oil extracted from our continent brings in between 80 and 90 cents. And by easing the oil-transportation bottleneck, it could also bring down energy prices in some parts of the United States.

While the proposed pipeline wouldn’t much affect the environment, it would have a sizeable impact on the U.S. economy. TransCanada’s $5.4 billion investment would employ around 42,000 Americans, and many of these opportunities would be high-paying union jobs. The pipeline would also result in billions of dollars in tax revenue.

Chris Faulkner is president and CEO of Breitling Oil and Gas.

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Posted: February 28, 2014 Friday 01:00 AM