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US, in Reversal, Issues Permit for Keystone Oil Pipeline

US, in Reversal, Issues Permit for Keystone Oil Pipeline thumbnail

The Trump administration announced on Friday that it would issue a permit for construction of the Keystone XL pipeline, a long-disputed project that would link oil producers in Canada and North Dakota with refiners and export terminals on the Gulf Coast.

The announcement, by the State Department, reversed the position of the Obama administration. It followed a 60-day review that was set in motion as one of the first acts of President Trump’s tenure.

The pipeline has been the focus of a long fight between environmentalists and the project’s advocates, who say it would further the goals of energy independence and economic growth. When President Barack Obama rejected the project in late 2015, he said it would undermine American leadership in curbing reliance on carbon fuels.

The announcement on Friday said the State Department “considered a range of factors, including, but not limited to, foreign policy; energy security; environmental, cultural and economic impacts; and compliance with applicable law and policy.”

The new secretary of state, Rex W. Tillerson, formerly chief executive of Exxon Mobil, had recused himself from the decision. The announcement said the permit was signed by the under secretary of state for political affairs, Thomas A. Shannon Jr.

The pipeline still faces hurdles before it is built. It needs the approval of the Nebraska Public Service Commission and local landowners who are concerned about their water and land rights. Protests are likely since the project has become an important symbol for the environmental movement, with the Canadian oil sands among the most carbon-intensive oil supplies. Mining the oil sands requires vast amounts of energy for extraction and processing.

In addition, interest among many oil companies in the oil sands is waning amid sluggish oil prices. Situated in the sub-Arctic boreal forest, the oil sands are expensive to extract. Statoil and Total, two European energy giants, have abandoned their production projects. In recent weeks, Royal Dutch Shell agreed to sell most of its oil sands assets for $8.5 billion. And Exxon Mobil wrote down 3.5 billion barrels of reserves, conceding they were not economically attractive to develop for the next few years at least.

Nevertheless, Canadian production continues to grow as projects conceived when prices were higher continue to come on line. And the Keystone effort is central to the future of TransCanada, the pipeline builder and a major force in the Canadian oil patch.

The United States Chamber of Commerce and other business groups applauded the administration’s action. Jack Gerard, the president and chief executive of the American Petroleum Institute, the primary industry lobbying arm, said the decision was “welcome news” and “critical to creating American jobs, growing the economy and making our nation more energy secure.’’

Opponents said the pipeline was unnecessary at a time when American oil production was soaring and future demand had been put in question by increasingly efficient cars, electric cars and growing concerns over climate change.

“The Keystone pipeline would be a straw running through the heart of America to transport the dirtiest oil in the world to the thirstiest foreign markets,” said Senator Edward J. Markey, a Massachusetts Democrat.

Originally planned to open in 2012, the Keystone XL would transport up to 830,000 barrels a day of Canadian and North Dakota crude to Steele City, Neb., where it would connect with existing pipelines to deliver the sludgy oil to refineries in Texas and Louisiana for processing. Most of the refined product would probably be exported, or it might enable domestic producers to export more oil produced in Texas, Oklahoma and Louisiana.

When the project was in the planning stages, the United States was highly dependent on oil from the Middle East. But in recent years, domestic production has nearly doubled, and the United States now exports increasing amounts of oil and natural gas. Oil prices have been slashed in half over the last three years, although many analysts predict that petroleum prices will rebound in the next decade, when the pipeline would come on line.

For Canada, and especially Prime Minister Justin Trudeau, the pipeline represents a mixed blessing. Mr. Trudeau publicly supports the pipeline as a tool to boost Canada’s economy, but an increase in oil sands production could undercut his commitment to cut greenhouse gas emissions as promised in the 2015 Paris climate agreement.

Protests helped sway the Obama administration to reject the project, and environmentalists have been further emboldened by demonstrations last year in North Dakota, mostly by Native American groups, that have delayed another project, the Dakota Access Pipeline.

Environmental groups are already promising to aid local groups in blocking the Keystone pipeline’s construction. “We’ll use every tool in the kit to stop this dangerous tar sands oil pipeline project,” said Rhea Suh, president of the Natural Resources Defense Council.

The project would provide for thousands of construction jobs, and has attracted the support of several labor unions.

President Trump has made infrastructure building a centerpiece of his efforts to spur economic growth. At the beginning of his term he instructed the Commerce Department to establish a plan that requires that new pipelines be constructed with American-made materials like steel. But the White House has since suggested that the Keystone project would not be subjected to those rules since it is not a new project.

NY Times



30 Comments on "US, in Reversal, Issues Permit for Keystone Oil Pipeline"

  1. Midnight Oil on Fri, 24th Mar 2017 10:18 am 

    Oh my, poor Dr Hansen and Mr.McKibben looks like life imprisonment for this one. Hope they get to March in Washington DC to protest this April 29th!.
    Of course, the “Don” will be in Palm Beach hosting rounds of golf with Tar Sands Executives, just like Obama did on the President’s Day protest in Washington DC a number of years ago.
    Outta site, outta mind…
    It’s all just a HOAX..REALLY

  2. BobInget on Fri, 24th Mar 2017 10:36 am 

    “Real” reason for XL; shipping oil to Venezuela!

    Authored by Nick Cunningham via OilPrice.com,

    Venezuela’s economic crisis continues to deepen. The South American OPEC member is thought to be sitting on nearly 300 billion barrels of oil, far more than any other country in the world, including Saudi Arabia (estimated at 268 billion barrels). But the economy has been in freefall for several years, with conditions continuing to deteriorate.

    The economic crisis has morphed into a full-blown humanitarian disaster. Just this week the Wall Street Journal reported on Venezuelan women traveling to neighboring Colombia to give birth because the state of Venezuela’s hospitals are horrific, with shortages of medical supplies and trained staff. Infant mortality is worse than in war-ravaged Syria.

    Food and other essential items are also painfully scarce, leading to long lines at shops. Tensions run high because there is not enough to go around.

    Now even gasoline is running low in Caracas, Reuters reports, an unusual development for the capital city.

    Gas shortages suggests problems for Venezuela’s state-owned oil company PDVSA are deepening. The government depends on oil production for more than 90 percent of its export revenues, and the collapse of oil prices back in 2014, coupled with a long-term slide in output, have ruined the company’s finances.

    That, in turn, puts even more pressure on PDVSA. A shortage of cash is straining the company’s ability to import refined products as it falls short on bills to suppliers. PDVSA needs to import refined products to dilute its heavy crude oil, but without enough cash, tankers are sitting at ports unable to unload their cargoes. Reuters also says that “many tankers are idle because PDVSA cannot pay for hull cleaning, inspections, and other port services.”

    Separately, Bloomberg reported that Venezuela’s largest port at Puerto Cabello is quiet, with satellite imagery showing no vessels arriving or departing. “If you can see a country’s economic decline from space, you know it’s in big trouble,” Graham Stock, the head of emerging-market sovereign research at BlueBay, told Bloomberg on March 19.

    The economic malaise has Venezuela’s cash reserves plunging to $10.4 billion, according to the latest estimates, which is equivalent to only 10 percent of the country’s outstanding debt. Graham Stock told Bloomberg that he puts Venezuela’s odds of a default this year at 50 percent.

    Inflation is likely over 700 percent annually, but in February the central bank decided to stop publishing money supply data, which surely doesn’t bode well. “If they are not publishing, you know it must be skyrocketing,” Aurelio Concheso, director of the Caracas-based business consultancy Aspen Consulting, told Reuters in an interview.

    The economic meltdown and humanitarian crisis has sparked anger across the country, and opposition to the incompetent management of President Nicolas Maduro is growing. That has been met with a clenched fist by the Maduro government, which has jailed political prisoners, weakened the National Assembly and indefinitely delayed gubernatorial elections. In response, 14 Latin American nations plus the United States and Canada are pushing a resolution in the Organization of American States calling on the Maduro government to hold elections and back off his nationwide crackdown. The efficacy of such a move is uncertain, but for a dozen nations in Latin America to intervene in such a way is a testament to how far Venezuela’s stock has fallen. “It’s one more step in the increasing isolation of Venezuela,” Javier Corrales, a professor and Latin American expert at Amherst College, said in a WSJ interview. “It’s a very important step in a region that realizes one of its members is in violation of the democratic precepts of the OAS charter.”

    Venezuela’s predicament has ramifications for the oil market. The South American nation was desperate for collective production cuts from OPEC members, and has enthusiastically supported the deal. Venezuela pledged output cuts of 95,000 bpd from October levels, promising to average 1.972 million barrels per day between January and June. Early data shows that Venezuela has not yet followed through on those cuts – Reuters says it is achieving only a 7 percent compliance rate. But the government has ordered cuts from some PDVSA operations in Orinoco Belt, a sign that the Maduro government has intensions to follow through on its pledge. Non-compliance could rattle the resolve of other OPEC members, ultimately leading to an unraveling of the deal, which would likely push oil prices much lower and worsen Venezuela’s crisis.

    However, production cuts also run the risk of exacerbating the economic depression that Venezuela finds itself in. Lower production means much less revenue. On top of that, Reuters says that some of the cuts will affect joint ventures that PDVSA has with Eni and Rosneft, two partners that won’t be too happy about being ordered to reduce output.

    The bottom line is that Venezuela’s oil output might be heading down whether or not President Maduro wants it to. Fitch Ratings says that a default on PDVSA’s debt is “probable” this year, with an estimated $10 billion in debt payments falling due and only $2 billion in cash on hand. And the company would need much higher prices in order to boost production at any point in the near-term. “Giving the tight liquidity, prices need to be significantly higher to revive output,” Lucas Aristizabal, a senior director at Fitch, told Bloomberg in February. “At least more than $100 to start with.”

    (and you thought living under Trump was bad)

  3. rockman on Fri, 24th Mar 2017 10:48 am 

    MO – It certainly is. As we say in Texas: “All hat and no stock”. IOW a pretend cowboy…no real substance. LOL.

    “Canadian production continues to grow as projects conceived when prices were higher continue to come on line. And the Keystone effort is central to the future of TransCanada”. More BS. First, the production surge is over. Second, they contradict themselves in the same sentence: how could imports have grown to record high volumes without the border crossing section on KXL? Easy answer: with the permit delay multiple other methods of shipping the oil were developed. And now one of the big efforts to increase the import capacity is about to start moving oil in a week or so: the Dakota Access Pipe Line. The DAPL that probably would not been built if the permit had been approved a few years ago.

  4. BobInget on Fri, 24th Mar 2017 10:55 am 

    Adding to Venezuela’s troubles, China, Russia.
    China is getting impatient for Venezuela to begin servicing $47 Billion in overdue loans, with oil of course. Instead, Venezuela needs to export to the US to service its refineries and CITGO retailers. Only with USD’s can Venezuela obtain partes needed for survival.

    Russians too are looking for some payback for their
    ‘investments’.

    Venezuela with all that (heavy) oil IMO will be the next
    non Muslim war over oil.
    China, Russia and of course the US will soon find Venezuela worth fighting over. The losers, like in Syria, will be the people of Venezuela.

    In ten or twenty years, someone here please post on
    ‘messagestodead.com’ the outcome.
    thanks, bob (don’t expect return text)

  5. Midnight Oil on Fri, 24th Mar 2017 11:18 am 

    Rockman, now we know why where you are from is

    A new national study says Texas has the lowest education standards in the nation — giving the state a D+.

    Your continue affirmations reflects the above.

  6. BobInget on Fri, 24th Mar 2017 11:46 am 

    Not only are MNO’s comments unwarranted but also reflect on our esteemed sectaries of Energy and State.

    Can’t recall a single time Rex Tillerson, Rick Perry or Rockman made a nasty personal remark, intended to weaken this board.

    Besides oil, Texas leads in alternative energy.
    Not because alt energy might delay climate change but because it makes good economic sense.

    We will get cleaner air too someday once people realize burning FF’s poisons their kids, not just
    hastening Climate Change.

  7. Midnight Oil on Fri, 24th Mar 2017 11:52 am 

    What about Bob?
    Sorry, but I did not make it up.
    Now if Rockman wants to play witty,
    so be it.
    Now when did Tillerson or Perry make one comment on this board? Nasty or otherwise?
    You are just bitter because you can’t face the facts and blowing smoke out of you hole, both!

  8. BobInget on Fri, 24th Mar 2017 11:56 am 

    Oh midnight, go to bed earlier.
    Leave comedy, parody up to professionals.

  9. Midnight Oil on Fri, 24th Mar 2017 12:00 pm 

    OK, Momma, and this place does host many clowns! Thanks for admitting it. Texas is doing what it does best.

  10. Davy on Fri, 24th Mar 2017 12:20 pm 

    “China, Russia and of course the US will soon find Venezuela worth fighting over. The losers, like in Syria, will be the people of Venezuela.”

    How is that going to happen bob? Can you splain the mechanics of that statement? Is China and Russia going to meet the US on a great battlefield? Bob, you have some wild off the friggen wall ideas and you think Trump is off his rocker. Look in the mirror

  11. Plantagenet on Fri, 24th Mar 2017 1:19 pm 

    The pipeline isn’t great but the huge oil trains were dangerous (ie. they had a nasty habit of exploding) and the large amounts of CO2 released by oil trains were creating global warming.

    Cheers!

  12. Sissyfuss on Fri, 24th Mar 2017 2:19 pm 

    Trump is now officially proclaimed the asteroid.

  13. BobInget on Fri, 24th Mar 2017 2:58 pm 

    Davy,
    Like almost everything connected with energy,
    “who knew oil supplies was that complicated”
    1) Venezuela, up to the eyeballs in debt to BOTH China and Russia. (in excess of 50 Billion$)
    2) Crude Production dropping precipitously.
    3) Relations with the US go back prior to WW/2.
    4) Citgo mortgaged to Russia who currently holds
    a court order preventing foreclosure.
    5) Venezuela, for lack of hard currency cannot buy
    needed oil drilling etc supplies.
    6) China either can not or will not keep Venezuela going much longer without 250,000 Bp/d promised
    in the last two billion dollar trunch.

    True to form, Russians and or Chinese are more then likely to intervene ‘to protect their investments’.

    I’ll leave the rest to you. Can any US president tolerate
    an armed force foreign to the region so close to the US?
    Monroe Doctrine;

    The 1823 Monroe Doctrine, which began the United States’ policy of isolationism, deemed it necessary for the United States to refrain from entering into European affairs but to protect Western hemisphere nations from foreign military intervention. In cooperation with and help from Britain, the United States issued the Monroe Doctrine in 1823, warning against the establishment of any additional European colonies in Latin America. Wikipedia

  14. Davy on Fri, 24th Mar 2017 4:05 pm 

    I am going to call you the dancing bob. Answer the question bob not dance around it. How are China and Russia going to battle the Americans over Venezuela? This is a simple question related to your comment. You implied a military situation and this would leave a Syrian situation.

  15. rockman on Fri, 24th Mar 2017 4:27 pm 

    MO – “A new national study says Texas has the lowest education standards in the nation — giving the state a D+.”. The really sad part: most consider the Rockman to be of average intelligence. Which means there are a!most 14 million Texas who are not as smart as him. But I attribute that to all the Yankees that have moved here to find a job. For 6 of the last 7 years Harris County (essentially Houston) has been the fastest growing in the country.

    Maybe we should start thinking about building that Wall on our northern border and not down south. LOL.

  16. rockman on Fri, 24th Mar 2017 4:31 pm 

    Sissy – Did you mean assteroid? LOL.

  17. Midnight Oil on Fri, 24th Mar 2017 7:45 pm 

    Rockman, you are unwise to continue on this topic….
    It is even worse….

    Enrollment in Texas public schools has skyrocketed from about 3.3 million students in 1990 to 5.3 million last year. That number will rise to 9 million by 2050, according to an analysis from Rice University’s Hobby Center for the Study of Texas, of whom nearly two-thirds will be Hispanic

    Over 900,000 students attend failing schools in Texas. Seventy percent of these students are Hispanic or African-American, and 79 percent are economically disadvantaged.
    Disparities in educational achievement have persisted for decades. In the 2015 NAEP assessment for mathematics, fourth-grade Hispanic students in Texas had an average score that was 15 points lower than that of white students. In reading, the gap widened to 25 points.
    If you are poor, disenfranchised, vote with your feet…..leave Texas
    new analysis of data from the US Census Bureau has revealed two major reasons why Texas has the highest rate of residents without health insurance in America: The state’s two largest cities, Dallas and Houston, are the least insured major metropolitan areas in the US.

    The Census Bureau ranked the largest American cities based on the rates of uninsured residents. Houston and Dallas are first and second on the list, and San Antonio — the third-largest city in Texas — comes in fourth, behind Miami.

    The Texas health system was put under the microscope in August after multiple reports showed that its maternal mortality rate has doubled in recent years. The current rate of 30 deaths per 100,000 live births is higher than the national average of 23 per 100,000, and worse than most industrialized countries

    Want more Rockman?…I’ve got plenty…

  18. rockman on Fri, 24th Mar 2017 8:53 pm 

    MO – “Want more Rockman?…I’ve got plenty…”. It’s very curious that you seem to think I would disagree with you or take offense from the facts. You do understand that the educational and financial disparities in Texas are an advantage to the educated and affluent, right? One of the reasons Texas has such cheap labor and housing costs.

    Or maybe you haven’t figured out like many here have: I’m not a Texan. LOL.

  19. Boat on Fri, 24th Mar 2017 9:38 pm 

    Midnight Oil,

    You misstated. 30 deaths per 100,000 is better than most industrial countries if you are concerned about over population. Same with health care, less is better if you want a cleaner planet. Now if you and the rest of the world would follow the Texas trend. Take care of yourself or die. No need for government spending for life when the biggest problem is life itself.

  20. Midnight Oil on Sat, 25th Mar 2017 12:21 am 

    Rockman…like I wrote very unwise to continue. Texas is down in the gutter brother

    Lone Star State has the second-highest rate of uninsured children in the nation, totaling 13 percent in 2013. A quarter of the state’s children lived below the poverty line in 2013. Moreover, more than a quarter of the state’s kids (1.9 million) are “food-insecure” – where families often “choose between food and other necessities.”
    The study determined Texas’ ranking by examining the state’s economic well-being, health, education, family and community. Massachusetts topped the list. Mississippi finished last.

    Rockman will spend Trillions building a damn Wall!
    Rockman, that is why they will build TUNNELS.
    Now I know how Dubya got his “smarts” and T Rex thinking he can adapt and engineer, and Rick Perry
    Top environmental officials under Perry have gutted a recent report on sea level rise in Galveston Bay, removing all mentions of climate change. For the past decade, the Texas Commission on Environmental Quality (TCEQ), which is run by Perry political appointees, including famed global warming denier Bryan Shaw, has contracted with the Houston Advanced Research Center to produce regular reports on the state of the Bay. But when HARC submitted its most recent State of the Bay publication to the commission earlier this year, officials decided they couldn’t accept a report that said climate change is caused by human activity and is causing the sea level to rise. Top officials at the commission proceeded to edit the paper to censor its references to human-induced climate change or future projections on how much the bay will rise.

    Yes, a reflection of the lack of basic education. Or maybe the high levels of CO2?

  21. twocats on Sat, 25th Mar 2017 6:37 am 

    MO – hopefully you’re a little more together after a good nights rest. you kind of lost it there a bit. and if you’re trying to get under rock’s skin, well, I think you’d have a better chance of getting under a rock’s skin.

  22. Dredd on Sat, 25th Mar 2017 7:06 am 

    “The shape is shifting” – T-Rex (The Shapeshifters of Bullshitistan – 5).

  23. Midnight Oil on Sat, 25th Mar 2017 8:05 am 

    Twocats…I’ll let the Rockman decide that for himself. As for yourself, I don’t give twoshts what you “hope”.

  24. twocats on Sat, 25th Mar 2017 8:18 am 

    I guess that answers that. and I guess getting under your skin is suuuper easy. ouch.

  25. Midnight Oil on Sat, 25th Mar 2017 8:45 am 

    Twocats you can guess all you like, pussy.
    Remember, there are more ways than one to skin a cat.
    So much fun being here…take themselves sooo seriously, like anything that is posted here matters to ANYTHING!

  26. rockman on Sat, 25th Mar 2017 9:08 am 

    twocats – It might sound strange but I’ve enjoyed MO’s arrival here. But, then again, I enjoy teasing cats with laser pointers. LOL.

  27. Midnight Oil on Sat, 25th Mar 2017 9:14 am 

    Rockman not from Texas, nope, right across the border in Mississippi. He’s got standards that are low expectations, cheaper housing and labor.

  28. Twocats on Sat, 25th Mar 2017 11:57 am 

    Rock, I haven’t really been following the personalities. I didn’t think MO was always this unhinged so I thought maybe he was having a psychotic break. I suppose you are right that the cat doesn’t have that much less of a life for never catching the laseR and it is hi-larious.

  29. Midnight Oil on Sat, 25th Mar 2017 12:06 pm 

    Listen to you two! Sound like a couple of nutty broads analyzing their boyfriends.
    Suppose that’s why you chose your avatar, twocats!
    At least you have them in your apartment to keep you company.
    Believe me, this is hilarious.
    Breakdown…too much…
    Life? Tell that to the regulars that constantly post here, day in, day out, year after year…do I need to name, names?

  30. Dredd on Sat, 25th Mar 2017 3:39 pm 

    crockman is everywhere.

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