What are the forces moving the Minnesota economy? Adam Belz tries to identify the trends and show the connections between Minnesota and the larger U.S. and global economies. You can connect with him on Twitter: @adambelz

Canadian ambassador: Keystone pipeline should be approved

Posted by: Adam Belz under Business trends, Economics, Energy Updated: April 19, 2013 - 4:17 PM
As the battle over the Keystone XL pipeline sharpened this week in State Department hearings in Nebraska, Canada’s ambassador to the United States called for the State Department to approve the project in a speech in Minneapolis.
 
Speaking to the Minnesota International Center on the 50th floor of the IDS Center, Gary Doer said the pipeline would produce fewer greenhouse gas emissions than transporting oil by train, and would draw the U.S., Canada and Mexico closer to the goal of North American energy independence.
 
“To us, it’s part of an energy vision,” Doer said. “That will be a huge gamechanger in terms of geo-security issues for the United States and for North America.”
 
Oil from the Middle East and Venezuela would become less crucial, the pipeline would create jobs and allow Canadian firms to get oil to market more easily, and it can be built safely without causing more harm to the environment, he said.
 
The pipeline would travel from the Canadian border at Morgan, Mont., through North Dakota and South Dakota to Steele City, Neb. It would be 875 miles long and carry oil from Alberta and North Dakota ultimately to refineries on the Gulf Coast.
 
The State Department issued a draft of an environmental impact statement last month, finding that blocking or approving the pipeline — either way — would fail to substantially affect greenhouse gas emissions or slow the controversial extraction of oil from northern Alberta’s tar sands. The report also said aquifers on the Great Plains would not be at risk from the pipeline, and the project would create 42,000 jobs directly and indirectly.
 
Environmental groups like the Natural Resources Defense Council have rejected some of the State Department’s findings, arguing that the pipeline would lead to a spike in oil extraction from Alberta, where the oil that’s pulled from the sand produces 17 percent more greenhouse gases per barrel over its life cycle than an average barrel of oil.
 
Doer said Friday that he sides with the State Department’s report. The State Department held hearings over the pipeline in Nebraska this week, and eventually will decide whether the project moves forward. 
 
“The State Department correcly pointed out that oil from Canada will not increase greenhouse gases if the pipeline’s approved, because it’s now basically coming down on train,” Doer said. “In fact, trains will have an 8 percent higher greenhouse gas (emissions) than a pipeline. So this is part of making the United States energy independent from the
Middle East, it’s part of displacing unreliable oil from Venezuela, it creates 42,000 jobs, and in Minnesota, a lot of your oil comes from Canada.”
 
Alberta oil sands operations have greatly cleaned up their process in recent years, Doer said. 
 
“We believe in clean air and clean water, and we’re going to have to keep working on it,” he said.
 
The rapid rise of oil shipment by rail has complicated the argument over the pipeline, and has clear Minnesota implications. Canadian National and Canadian Pacific, two railroads with big stakes in Alberta, both have U.S. entry points in Minnesota. Both railroads have been investing in tank cars and oil-loading terminals. Canadian National increased its oil shipments six-fold in 2011. Excluding those two railroads, U.S. petroleum shipments by rail have spiked 56 percent so far in 2013, to 202,173 carloads through April 13, according to the Association of American Railroads.
 
This increase in rail oil traffic has risks. A Canadian Pacific train carrying oil from Alberta derailed about 20 miles north of Alexandria, Minn., on March 27, spilling roughly 350 barrels of oil into the snow. The Wall Street Journal reported 112 oil spills in the U.S. between 2010 and 2012, up from 10 in the previous three years, though the volume of spilled oil has declined since 2008.

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