Pipelines?! We don’t need no stinkin’ pipelines!

rail or pipelinesFirst, my apologies to B. Traven for my appropriating (and mutilating) the classic quote from his 1927 novel, “Treasure of the Sierra Madre”.    However, the similarities of both treasure and derisive response regarding policy were begging to be put into context via that oft-quoted line.   In this case, instead of gold dust from sands in the Sierra Madre, the treasure is oil in the Canadian “tar sands”.  And the contemptuous retort?   Instead of gold miners demanding to see identification from bandits pretending to be Federales, it’s the “oil miners” thumbing their noses at the political inaction revolving around the Keystone XL pipeline.

With all due respect to those who are desirous that heavy crude from Canada remain in the ground, it’s just not going to happen.  If the hope was that killing the Keystone XL would attain that goal, then that hope will go unfulfilled.  Without a doubt, Canadian heavy crude is coming out of the ground, and will make it to terminals by one method or another, and a variety of producers have simply said that if the Keystone XL doesn’t materialize, then expanding transport by rail would be a priority.  TransCanada has already stated that it is evaluating rail terminals in Alberta and Oklahoma should the Keystone be further delayed or not approved, and now Exxon has flatly stated that it is already working to move up to 100,000 barrels per day of Canadian oil using a new rail terminal that should be up and running by 2015.

With the seemingly growing number of transport rail accidents over the last year, it would seem that opponents of the Keystone XL may have made a critical error with their efforts to stop the pipeline, and exacerbated the problem by now pushing the inevitable crude onto a more risky transportation platform.   However, perhaps faced with choosing the lesser of two evils (from an environmentalist’s point of view), the current administration will opt to “clear the rails” (pun intended) for the approval of the Keystone XL.

With the recent report from the State Department that the construction of the Keystone XL would likely not have any net adverse effect on the climate (along with the roughly 40,000+ direct and indirect jobs the project would create), the pressure is now on the administration to approve the project.   At this point, it would seem that a variety of negative outcomes will impact the future should the pipeline be further delayed, or never approved.   Aside from the potentially riskier method of transport by rail, and the loss of the potential jobs, another side effect is that significant amounts of heavy crude will be shipped to China, where global emissions will actually be higher due to less stringent refining regulations within Chinese refineries.

So, is the statement “We don’t need no stinkin’ pipelines!” really just a bluff from the producers?  Perhaps, but it’s certainly one that carries serious implications for all parties involved if called.  Over the next three months, roughly eight different federal agencies will now have an opportunity to weigh in following the State Department’s report.

For those Humphrey Bogart fans who have seen the 1948 movie adaptation of the Traven novel, you’ll remember that at the end of the story the bandits scatter the gold dust, thinking it was worthless sand, and then the real Federales capture and execute them.   Perhaps there is a moral to that story after all.

 

 

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