Assessing the impact of the Keystone decision

That decision to pick another route for the Keystone XL pipeline from Alberta to Texas might have enormous repercussions in BC.

That decision by the U.S. State Department to pick another route for the controversial Keystone XL pipeline from Alberta to Texas might have enormous repercussions in British Columbia.

The whole issue centered around the environmental impact of the pipeline across fragile land on its way to Texas. But the decision to delay until at least 2013 can’t help but been seen as a political one. No doubt President Barack Obama is more than relieved to see that great big elephant moved out of the room, far enough away to put it behind the 2012 U.S. election.

TransCanada Corp based in Calgary has been pushing to build the $7-billion pipeline for the past three years to carry Alberta oilsands bitumen from Hardisty to the Texas coastline. The proponents argued there are lots of incentives for the go-ahead, none the least of which would be thousands of jobs and oil from a friendly, trouble-free neighbour. Then there are all those millions of dollars flowing back to the oil patch. TCC executives must have been pretty grim-faced last Thursday when the decision to delay came down.

The 2,673-kilometre long pipeline, which would carry 830,000 barrels of crude oil per day from northern Alberta, would enter Saskatchewan then go south into Montana, South Dakota and Nebraska where it would link with an existing Keystone pipeline. It would then continue into Oklahoma and on into Texas. The problem is, the proposed route goes through some sensitive and critical regions best left undisturbed.

The pipeline would be laid underground but one of the biggest concerns is that it will cross through the ecologically sensitive Sandhills of Nebraska as well as the Ogallala aquifer, a massive underground lake almost as big as Nebraska supplying drinking water to about 1.5 million people in eight states.

The pipeline would run through rich farm and ranch land in six states and cross numerous rivers and aquifers. The vision of an oil leak anywhere along the route has drawn the wrath of so many, not to mention the staggering carbon footprint the project leaves behind.

The opponents aren’t your typical tree-huggers. They include Nebraska’s governor and others in that state’s legislature worried about the impact on their agricultural economy. Joining them are U.S. Vice President Al Gore, land owners, farmers, ranchers, folks on the Hollywood A list and Canadian activists.

The economics of the pipeline for Canada and the United States are huge. The construction  could employ some 13,000 workers; another 7,000 will find jobs in pipeline manufacture, and the project could generate some 118,000 in secondary jobs. These are employment numbers not to be sniffed at.

PM Harper and Finance Minister Jim Flaherty were not impressed. Harper’s been pushing hard on this project. He considers its endorsement a no-brainer. But the delay may now open up other issues much closer to home.

Canada could look to sell its oil elsewhere. Asia heads the list which means that Alberta oilsands crude could be pipelined 1,177 kilometres underground to Kitimat. That Northern Gateway project might just be bumped to the head of the line.

That means jobs, a boosted economy – and a made-in-Canada environmental conflict on the pros and cons of 525,000 barrels of diluted bitumen a day flowing through B.C. while, along a parallel pipeline, 193,000 barrels of condensate flow back to Alberta to dilute the next batch of oil. Then there’s the testy issue of the movement of supertankers, the what-if’s of an oilspill and a seismic seabed. And according to Environment and Sustainable Development Commissioner Scott Vaughan, the feds aren’t ready to respond to a major oil spill in Canada.

No doubt Keystone conflicts will keep flowing for some time yet.

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