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Sean Hackbarth Opponents of the Keystone XL pipeline join the Cowboy and Indian Alliance in a march on the National Mall in Washington, D.C.Opponents of the Keystone XL pipeline march on the National Mall in Washington, D.C. Photographer Pete Marovich/Boomberg.

Opponents of the Keystone XL pipeline want you to believe that stopping the project will ensure that Canada won’t develop its oil resources. Well, someone forgot to tell Canada. From Reuters:

Canadian crude exports to the United States topped 3 million barrels per day last week for the first time, suggesting delays to new export pipelines such as TransCanada Corp's Keystone XL were failing to check oil sands development.

Environmental groups are fiercely opposed to new pipeline projects connecting Alberta's oil sands to the United States and the east and west coasts, reasoning that without market access crude production will slow.

But the latest weekly data from the U.S. Environmental Information Administration shows Canadian crude exports are ramping up rapidly despite the pipeline impasse.

Canada, the No. 1 supplier of crude to the United States, exported 3.248 million bpd of crude to its southern neighbor in the week ended Oct. 3, up 18 percent from the previous week and up 35 percent from the same period a year earlier.

The four-week average to Oct. 3 was 2.977 million bpd.

"It's a pretty clear indication that crude will find its way to market around various constraints," said Sandy Fielden, analyst at RBN Energy.

The State Department came to the same conclusion in its economic analysis of the Keystone XL pipeline:

[A]pproval or denial of any one crude oil transport project, including the proposed Project, is unlikely to significantly impact the rate of extraction in the oil sands or the continued demand for heavy crude oil at refineries in the United States based on expected oil prices, oil-sands supply costs, transport costs, and supply-demand scenarios.

Much of this oil is moving by rail right now, but plans are in the works for additional pipeline capacity. Earlier this year, the Canadian government approved a pipeline to transport oil west from Alberta to British Columbia. It awaits approval from Aboriginal groups. Then there’s the proposed Energy East pipeline:

The proposed $12 billion project would send 1.1 million barrels per day of western Canada’s oil-sands crude 2,900 miles east to Saint John, New Brunswick, on the country’s North Atlantic Coast. The project would convert a 1950s-era underutilized natural gas pipeline and add extensions to each end: one to a terminal south of Alberta’s oil sands in the oil town of Hardisty and the other extending the reach of the pipeline from Montreal to a refinery in Saint John, which has supertanker access that would allow the crude to be transported globally, including to the refineries in Louisiana and Texas that the Keystone XL pipeline would be intended to serve.

It’s obvious that Canada will get oil to hungry global markets anyway it can. It continues making the case for the Keystone XL pipeline because it's a valuable conduit, but at the same time, it’s not waiting for a decision by the President.

The fact of the matter is while Canada continues developing and transporting its oil, America is losing out on the jobs, economic growth, and local tax revenue that would be generated by the Keystone XL pipeline.

Pipeline opponents are so rigidly fixed to their anti-energy ideology that they reject the economics and science surrounding the pipeline. Facts don’t matter to them. President Obama should ignore their hysteria and approve the Keystone XL pipeline.

Sean Hackbarth Power lines covered in snow and ice.

“This country did not just dodge a bullet ― we dodged a cannon ball.”

That’s how Nicholas Akins, CEO of American Electric Power (AEP), described the situation last winter when the polar vortex hit the United States and put tremendous strain on the power grid.

John Kemp at Reuters writes how the power grid barely held up to the cold temperatures and notes how a reduction in fuel diversity played a role:

Since the late 1990s, most new power generating units have been built to burn natural gas. Unlike coal or oil, gas is not usually stored on site, so generators rely on real-time deliveries from the gas pipeline network.

In many cases, generators relied on purchasing extra gas in the spot market to meet peaking electricity demand. But with gas consumption also hitting record levels, generators were unable to contract for sufficient volumes and arrange for delivery through an already congested pipeline network.

The increase in gas-fired generation has introduced an unanticipated and dangerous link between the gas and electricity systems - with the risk of common failure.

According to NERC [North American Electric Reliability Corporation], gas supply problems led to losses of 620 MW of generation in the Midwest, 3,300 MW in the Northeast, 11,000 MW in the Middle Atlantic states, 2,000 MW in the Southeast and around 2,000 MW in Texas.

Thankfully coal-fired power plants were still available to support the grid, as I wrote in April [emphasis mine]:

AEP generates electricity in the region, and company CEO, Nicholas Akins told shareholders on a conference call last week that 89% of his company’s coal-fired plants scheduled to be shut down in 2015 were running during the cold snap.

But what about the next severe cold snap? Federal policies like EPA’s proposed carbon rules could mean those coal-fired plants won’t be there to keep the lights on and heat homes.

This is why electric resource diversity is critical. Since natural gas is used for both electricity and heating, and regions like the Northeast have natural gas “infrastructure constraints,” killing coal use will put more stress on natural gas infrastructure and make the power grid more vulnerable.

The lesson to be learned from the polar vortex, FirstEnergy CEO Tony Alexander told an audience at the U.S. Chamber in April, is “We need to maintain a diverse fleet – including real generating assets such as coal, nuclear and natural gas – to ensure reliable, affordable service over the long term.”

No matter how the winter will be this year, we need federal policies in place that maintain fuel diversity and the security of our electric grid.

Sean Hackbarth Combine harvesting grain and loading it into a truck.Photo credit: Charles Knowles. Licensed under a Creative Commons Attribution 2.0 Generic license.

Having an outstanding grain harvest is a great… unless you can’t get it to market. The Keystone XL pipeline can help.

These headlines illustrate the situation Great Plains farmers face:

Williston Herald: “Local farms feeling the pressure of delayed shipments” The Hill: “ND oil trains cause large backlogs for grain shipments” Reuters: “Trains for grains scarce on the U.S. Plains” New York Times: “Grain Piles Up, Waiting for a Ride, as Trains Move North Dakota Oil” Seattle Times: “Oil trains crowd out grain shipments to NW ports

With its delays, the Obama administration has created a situation where farmers watch in frustration as oil cars loaded with Bakken and Canadian crude pass by as their grain sits in silos.

On the recent Keystone XL Lost Opportunities Tour, Mona Madler, executive director of the Southeast Montana Area Revitalization Team (SMART) in Baker, MT--where a pipeline that will carry Bakken oil will connect to the Keystone XL-- told me that farmers are “dumping grain on the ground,” because they can’t get it to market. Tom Kauer a community leader in Winner, SD said, “Millions of bushels are sitting on the ground.”

Senators Thune and Klobuchar have asked Secretary Vilsack to look into the backlogs agricultural producers have faced, but part of the answer has been staring at us in the face for six years: Approve the Keystone XL pipeline.

Heritage Foundation economist Nicolas Loris explains:

The Keystone XL pipeline, in particular, would help carry significant amounts of crude oil. According to the North Dakota Pipeline Authority, “Bakken rail outflow capacity totaled 965,000 barrels per day (bbl/d) at the end of 2013, compared to 515,000 bbl/d of pipeline capacity.” Keystone XL would help to minimize this problem.

TransCanada has said that Keystone XL could accept up to 100,000 barrels of Bakken oil for transport.

Will building the Keystone XL pipeline solve all these transportation problems? No, but it can be part of a solution. Until the pipeline is approved, millions of bushels of grain continue sitting in silos. Talk about a lost opportunity.

 

Sean Hackbarth United Mine Workers president Cecil Roberts speaking in front of EPA headquarters in Washington, DC.United Mine Workers president Cecil Roberts in front of EPA headquarters. Photo credit: United Mine Workers' Twitter feed.

As it has developed its proposed carbon regulations, EPA has avoided states like West Virginia that depend on coal not only for electricity but for jobs. Because the agency has ignored them, a few hundred coal miners and their supporters marched to EPA in protest of proposed regulations.

“They won’t come to the coalfields, so we need to continue to bring the coalfields to them and let them know the amount of unemployment we’ve seen,” United Mine Workers president Cecil Roberts said.

More than 500 active and retired coal miners from West Virginia and other parts of Appalachia delivered that message to Washington Tuesday. The protest is the most recent demonstration against the clean power rule which would change the rules for emissions on existing coal fired power plants in the United States.

Mine Workers President Cecil Roberts said their message is the new regulations are crippling the economy of Appalachia, but it will also stunt growth nationally.

Last night, Roberts debated EPA’s proposed carbon regulations with MSNBC’s Chris Hayes. In June, the union estimated that that 75,000 coal mining jobs would be lost by 2020.

Union opposition to EPA’s proposed carbon regulations sprouted up from the moment they were released. Union leaders like Edwin Hill, president of the International Brotherhood of Electrical Workers (IBEW) have pointed out that the proposed regulations will mean a less-reliable electrical grid, and in July, thousands of union workers traveled to Pittsburgh to speak out against the proposed regulations.

Coal is an abundant, affordable, reliable fuel. We can't afford to push it out of our energy mix.

.@MineWorkers tell @GinaEPA that @EPA rules put seniors at risk. Our statement: https://t.co/b1XySlqtCq pic.twitter.com/WYAaYnJ9fR

— America's Power (@AmericasPower) October 7, 2014

Thomas J. Donohue U.S. Chamber President and CEO Tom DonohueU.S. Chamber President and CEO Tom Donohue. Photo credit: Ian Wagreich / © U.S. Chamber of Commerce.

It’s been six years since TransCanada submitted its first application to the U.S. State Department to build the Keystone XL pipeline. The administration’s delays and the opposition’s distortions have made national headlines and have been fodder for Washington politics. But what’s actually happening in the communities along the planned route? How are they being impacted by the pipeline limbo that the administration has subjected them to for the past six years?

To find out, the U.S. Chamber sent a team to travel the 875-mile route in the United States and talk to people along the way. The team started in Morgan, Montana, where the pipeline will cross the Canadian border and ended in Steele City, Nebraska, where it will connect to America’s existing pipeline network. In every community, the message was the same: Keystone delays equal lost opportunities.

Delays equal lost property taxes. The State Department estimates that rural counties in Montana, South Dakota, and Nebraska would collect more than $55 million in property taxes in the first year of the pipeline’s operation. Anticipating the influx of revenue, city officials planned and voters approved a brand new elementary school in Glasgow, Montana. But with Keystone revenue in doubt, the school still hasn’t been built. The story is the same all along the route—projects to improve infrastructure and education have been put on hold or jeopardized.

Delays equal lost jobs and growth. In the three pipeline states, the project would generate 11,600 direct and indirect jobs, $391 million in wages, and $648 million in economic activity, according to the State Department. Businesses have been counting on new workers with good incomes to help lift their economies and invigorate their communities—they’re still waiting.

Delays equal lost economic development potential. Several places see Keystone as their chance to become something more. Baker, Montana, near the Bakken shale boom, believes that a planned on-ramp for shale oil to the pipeline will help cement the town’s role as a regional energy hub. Winner, South Dakota, hopes that electricity infrastructure needed for Keystone will attract new businesses and allow for wind power so that it can diversify its economy.

These communities are acutely aware of what’s at stake—but Keystone delays have implications for all of us. Nationally, 42,000 new jobs and $3.4 billion in economic activity are on the line. Our ability to enhance energy security and reduce our reliance on foreign oil is at stake.

All of these opportunities can still be seized. But first we’ve got to approve and build the pipeline. 

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