Oil Sands, Not Sand Hills Behind Keystone Opposition

Opposition to the Keystone pipeline project is really about climate politics, not concerns about the pipeline's route through Nebraska's Sand Hills, said energy industry officials during a Tuesday morning sessions at the IHS CERAWeek energy conference in Houston.

Alex Pourbaix, president of energy and oil pipelines for TransCanada, noted that opponents have been using "hyberbole and lies" to try and block the project, and said that allegations that the oil would be corrosive to pipelines and would put out significantly more greenhouse gas emissions than conventional oil were false.

Industry officials also refuted allegations that oil sands divert significant amounts of water from local supplies and away from agriculture needs.

Glen Schmidt, president and CEO of Laricina Energy Ltd., said they are not competing with the agricultural industry for water, as the water used in their operations is deep underground and unpotable. The company also is recycling water.

Pourbaix commented that Keystone is not just an oil sands pipe, but will also help break the transportation bottleneck surrounding Bakken oil production in North Dakota. Bakken production reached 500,000 bpd of production in 2011, but production is trapped due to lack of adequate pipeline infrastructure and limited transportation options with railroad and car.

Canadian oil sands already play an important role in U.S. oil supply; in 2010, Canada supplied 22 percent of the conventional oil that was imported into the U.S. Despite increased development of renewable resources, having access to friendly, reliable oil resources will remain critical as oil and gas will comprise approximately 57 percent of energy used in the U.S.

The belief that significant opposition exists to the Keystone pipeline is a perception, said Martin Durbin, executive vice president of the American Petroleum Institute. Durbin noted that organized labor groups and public officials in the local communities, support construction of the pipeline and the jobs it will bring.

Most people who express legitimate concerns about projects such as Keystone usually come around to understanding the needs and benefits of such projects. However, a large growing group of people do not want any energy infrastructure in their communities, Pourbaix commented.

"They want the benefits of a modern, industrial society but don't want the inconveniences," Pourbaix noted.

TransCanada has decoupled the portion of the pipeline linking Cushing, Okla., to the U.S. Gulf Coast, and is seeking approval for this separate project. The company is working with the Nebraska government on an alternative route to bypass the Sand Hills, and should have a revised route established this fall.

Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at kboman@rigzone.com


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allen | Apr. 30, 2012
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