• Oil sands country: Remote region at the heart of the Keystone controversy

    The Keystone pipeline, a project to transport heavy crude from Canada to the Gulf Coast, is expected to provide thousands of temporary construction jobs in the U.S., but critics say the oil it carries comes at a terrible cost. NBC's Anne Thompson reports.

    By Anne Thompson, chief environmental correspondent, NBC News

    While the possible construction of the Keystone XL pipeline has made for contentious disagreements from the halls of Congress to ranches in Nebraska, the real environmental debate begins in a place most Americans have never heard of.

    Nearly 700 miles north of the U.S.-Canada border sits Fort McMurray, Alberta, the unofficial capital of oil sands country, and the heart of the Keystone controversy.

    Canada's oil reserves rank third largest in the world and sit beneath the vast Alberta forest. Oil mining companies like Shell, Syncrude and Suncor surround the town. They are big industrial operations in an even bigger forest.

    Oil here is not the liquid black gold you think of in Texas or Oklahoma or the Gulf of Mexico.  It is a tar-like substance called bitumen.  It is excavated by mining or steam assisted drilling, where it is literally melted a quarter mile beneath the earth.  This oil is so heavy it must be upgraded or diluted before it can transported.

    At Shell's Jackpine Mine in the oil sands, the company digs 24 hours a day, 365 days a year. Twenty-eight trucks burning 45 gallons of diesel fuel an hour transport the goods once lifted from the ground.

    The whole operation is a carbon intensive process sending more global warming gases into the atmosphere. How much depends on your point of view. The oil industry downplays the impact, but opponents claim it is up to 37 percent more carbon intensive to produce a barrel of crude from oil sands.

    The State Department, in its review of Keystone, says the oil from this area produces 17 percent more greenhouse gasses than conventional crude.  Those emissions are the heart of the environmental debate in Alberta, and a big reason why opponents call this "dirty oil."

    Jeff Mcintosh / AP file

    This Sept. 19, 2011 aerial photo shows an oil sands mine facility near Fort McMurray, in Alberta, Canada.

    The oil sands industry here plans to more than double its production by 2030. Shell Vice President Tom Purves explains, "We have a massive resource here that's oil from a country that's very stable, it's a democratic country. We're able to transport this oil on pipelines safely to the US and other parts of the world, other parts of North America. And I think we'll be using fossil fuels for a long time - this will be an important part of it."

    Opponents say this is not about stopping development. They realize this is a natural resource crucial to Canada's future. For them, it's about the pace, the scale and how it adds to Canada's carbon footprint. They worry approval of the Keystone pipeline will turbo-charge growth.

    Eriel Deranger of the Athabasca Chipewyan First Nation understands the booming industry brings modern conveniences. It also brings, she says, modern problems threatening the forest and wildlife that are still part of the First Nations culture and have been for centuries.

    "There has to be a balance, and respect for human - fundamental human rights and the rights to human subsistence and survivals. What we're seeing is that balance is out of whack here in Alberta. I think we're seeing development take precedence over the preservation of peoples and people's basic right to human survival," she said.

    At the Pembina Institute, an environmental think tank, the focus is about carbon dioxide.  If things continue the way they are, says Jennifer Grant, Pembina's Oil Sands director, Canada will not meet its goals to reduce greenhouse gas emissions.

    "Right now between 2005 and 2020, we're expecting 67 million tons of reductions from other sectors in Canada's economy.  During that same timeframe we're expected to see 72 million tons oil sands greenhouse gas emissions growth," Grant said.

    Todd Korol / REUTERS file

    Oil, steam and natural gas pipelines run through the forest at the Cenovus Foster Creek SAGD oil sands operations near Cold Lake, Alberta, in a July 9, 2012, photo.

    Aware of the concerns in Canada and in the U.S. about climate change, the industry is quick to point out it has reduced carbon emissions intensity – that is, the emissions created per barrel – 26 percent from 1990 to 2009. But overall emissions are still growing because of increases in production. Shell hopes to have the ability to capture some of the carbon emissions at one of its facilities by 2015.

    But there is no perfect way to extract oil. Cenovus, a Canadian company which drills for oil, uses natural gas to make steam. Al Reid, vice president of Cenovus' Christina Lake operation, says reducing the amount of natural gas it burns shrinks the carbon footprint and helps the bottom line. But he admits there's only so much they can do.

    "With today's technology, we will not get emissions down to zero. Can we continue to decrease them? I think that's very possible and that's something that we work on every single day," he said. "And over time there may be a technology that allows us to do that but we don't have that technology today."

    There's no question the debate in the U.S. over Keystone is having an impact in Canada. This month, Alberta's government floated the idea of raising its price on carbon to force the industry to do more to reduce emissions. Will that be enough to convince President Barack Obama to approve a pipeline that carries oil with a bigger carbon footprint?

    It's not just the environment. There are issues of energy security and economic impact. The State Department says the extension would provide 3,900 construction jobs over a  1 to 2 year period  and another 38,200 positions associated with the construction over the same time frame. Once built it says the pipeline would create 35 permanent jobs and 15 temporary ones, according to the government study released last month. It is multifaceted issue that will dominate discussion for months to come.

     

  • State Department admits Keystone environmental impact but says there's no better way

    TransCanada Corp. via Reuters file

    The Keystone XL oil pipeline, pictured under construction Jan. 18, 2012, in North Dakota.

    By M. Alex Johnson, staff writer, NBC News

    This story has been updated to reflect a correction.

    Construction of the controversial Keystone XL pipeline would create "numerous" and "substantial" impacts on the environment, the State Department said Friday in a draft environmental impact statement. But the project is a better bet than any of the alternatives, it said in essentially clearing the project to go ahead.


    The report concluded that the Canadian synthetic crude oil the pipeline is slated to transport into the U.S. produces 17 percent more greenhouse gases than natural crude oil already refined here. In addition, it said the construction phase of the project would result in carbon dioxide emissions equiavalent to about 626,000 passenger vehicles operating for a full year.

    Without directly saying so, the report signaled the State Department's belief that the pipeline should go ahead, concluding that other modes of transportation would have the same impacts and that proposed alternatives — including an above-ground route and a smaller-diameter pipe — "were not reasonable."

    And on a central issue of discussion, it concluded that blocking the pipeline wouldn't make any difference in the U.S.'s high consumption of oil.

    Reaction from environmental groups was swift.

    "The Sierra Club is outraged by the State Department's deeply flawed analysis today on Keystone XL," the Sierra Club tweeted.

    Gene Karpinski, president of the League of Conservation Voters, said the report failed to appreciate the pipeline's potential effect on climate change.

    "People who think our climate wouldn't be negatively impacted by Keystone XL have their heads in the (tar) sands," he said in a statement. "... LCV will work to ensure that the millions of Americans opposed to this dangerous pipeline have their voices heard during the comment period and that Keystone XL is rejected once and for all."

    But House Speaker John Boehner, R-Ohio, welcomed the report, which he said "makes clear there is no reason for this critical pipeline to be blocked one more day."

    "After four years of needless delays, it is time for President Obama to stand up for middle-class jobs and energy security and approve the Keystone pipeline," Boehner said.

    The environmental statement is only a draft, not a final decision whether to greenlight the project. A public comment period of 45 days is next.

    A final decision on the $5.3 billion pipeline, a project of TransCanada Corp., has been pending for more than four years as environmental activists battle to kill it, contending that it contributes to the U.S.'s dependence on "dirty fuel" that generates higher emissions than crude oil refined in the U.S.

    The pipeline would transport synthetic crude oil from oil sands in northeastern Alberta to refineries running along the spine of the U.S. all the way down to Texas. Along the way, the 2,000-page report said, it could also:

    • Disturb highly erodible soil along nearly half of the 875-mile U.S. segment — including 4,715 acres of "prime farmland soil."
    • Degrade streams and other surface water.
    • Encroach on the habitats of 13 federally protected species or species being considered for that designation, including the whooping crane and the greater sage grouse.
    • Be susceptible to potentially disastrous leaks and spill.

    On the other side of the balance, the report noted the potential for economic development and growth in impoverished communities along the pipeline's pathway, saying it could create about 42,000 jobs during the construction period, about 3,900 of them directly employed in construction activities. The report noted that after construction is completed, the project would generate 35 permanent and 15 temporary jobs, primarily for routine inspections, maintenance and repairs.

    President Barack Obama will have the final say on the project, which is being reviewed by the State Department, not the Environmental Protection Agency, because the pipeline would cross national borders. Obama signaled his support for the southern section of the line last year, but he gave environmentalists a measure of hope in January, when he promised to do more to fight climate change in his inaugural address. 

    Tens of thousands of protesters jammed the National Mall in Washington on Feb. 17 to urge Obama to reject pipeline. They adopted the slogan "Forward" — cribbing Obama's own campaign slogan.

    The final decision will be a crucial one for Canada, which may need to look elsewhere for new energy markets if the pipeline is rejected.

    Tom Capra, Catherine Chomiak and Frank Thorp of NBC News contributed to this report. Follow M. Alex Johnson on Twitter and Facebook.

    Watch US News videos on NBCNews.com

    This story reflects the following correction: This story misstated the State Department's projection of the number of construction jobs the Keystone XL pipeline project would create. The department's draft environmental impact statement said the project could create about 42,000 jobs during the construction period, about 3,900 of them directly employed in construction activities. The report noted that after construction is completed, the project would generate 35 permanent and 15 temporary jobs, primarily for routine inspections, maintenance and repairs.

    This story was originally published on Fri Mar 1, 2013 5:50 PM EST

  • Nebraska governor OKs Keystone pipeline route, but US delays decision

    By Timothy Gardner and Andrew Quinn, Reuters

    WASHINGTON - The Obama administration has delayed a decision on TransCanada Corp's rerouted Keystone XL oil pipeline until after March, even though Nebraska's governor on Tuesday approved a plan for part of the line running through his state.


    "We don't anticipate being able to conclude our own review before the end of the first quarter of this year," said Victoria Nuland, a spokeswoman at the State Department, which had previously said it would make a decision by that deadline.

    She said the department would take into consideration approval of the line by Nebraska Gov. Dave Heineman.

    Interest in the fate of the $5.3 billion pipeline that would link Canada's oil sands to refineries in Texas has been heightened after President Barack Obama promised to fight climate change.

    Obama said in his inaugural address on Monday the United States will respond to the threat of climate change and that failure to do so would "betray our children and future generations.

    The Keystone pipeline is staunchly opposed by environmentalists, who say it will lock the United States for 50 years into dependence on fuel that has higher emissions than average crude oil refined in the United States.

    They want the State Department to re-examine the climate impact of the line after it previously said the project would not result in additional emissions because the oil would find its way to market even if Keystone were not built.

    It was the latest delay on the pipeline, which has been pending for more than four years.

    Last year Obama threw his support behind the southern section of the line, which is now being built and would help drain a glut of crude in the nation's midsection resulting from new oil drilling in North Dakota.

    The State Department will rule on a final permit for the northern section of the line because it would cross the national border.

    It expects to issue a draft environmental assessment of the Keystone line in the near future and before the end of March, a second official at the department said. That report will have a public comment period before the department makes a final decision on the line.

    Nebraska approves pipeline section
    Nuland's comments came shortly after Nebraska's governor approved a revised route in his state for the Keystone XL pipeline.

    Heineman, a Republican, sent a letter to President Barack Obama on Tuesday that said TransCanada would adhere to 57 safety conditions. Those include rigorous pipeline design, testing and the reporting of leaks. It would also avoid Nebraska's ecologically sensitive Sandhills region.

    TransCanada had submitted a new route for the northern pipeline, expected to transport 830,000 barrels per day of oil, after the Obama administration had rejected an initial plan. Environmentalists had complained it would cross ecologically sensitive regions in Nebraska.

    Heineman said TransCanada would provide evidence that it is carrying $200 million in third party insurances to cover any cleanup costs from leaks.

    He approved the line even though his state's environmental regulator said this month it would still cross a section of the massive Ogallala aquifer, an important source of irrigation and fresh water to the Great Plains states.

    Nuland said Nebraska's decision was important but gave no clues about what the State Department's review would say. "Our processes move in parallel," she told reporters. "We obviously want to take the Nebraska environmental study, we want to compare it with the work that we've done."

    TransCanada confident
    TransCanada's CEO Russ Girling, who attended Obama's inauguration, said he was not worried by the president's latest comments, and that the Nebraska decision was "hugely positive step forward."

    Regarding the State Department's eventual decision, he added: "I'm still optimistic that this thing can be done in a relatively short period of time."

    Girling said work on the southern section of the pipeline, now called the Gulf Coast project, is on schedule.

    Robert Johnston, a risk management analyst at the Eurasia Group, however, has warned that the decision could be delayed until the summer as environmentalists push for public hearings and a review by the Environmental Protection Agency.

    Many Republicans in Congress support the pipeline for the jobs it would bring to their states. Senator John Hoeven of North Dakota said he is making preparations to reintroduce legislation enabling Congress to approve the line if Obama does not. He could attempt to attach the measure to a must-pass bill. Similar attempts have failed in the past.

    Copyright 2013 Thomson Reuters. Click for restrictions.

  • Rice under fire from left as Kerry's name won't go away

    By Domenico Montanaro, NBC News Deputy Political Editor

    It’s not just Benghazi anymore.

    One of the most controversial energy projects in the nation also has become a flash point in the drama surrounding who may become the next secretary of state – and it’s coming from the left instead of the right.

    Back on Nov. 28, “OnEarth,” published by the Natural Resources Defense Council, dug into U.N. Ambassador Susan Rice’s financial disclosures and found that she and her husband have a stake in TransCanada, the company pushing for the Keystone XL Pipeline to be built.

    NRDC officials say it's an important issue that must be discussed during the nomination process. But the timing of the report raises questions, as it is being surfaced by an environmental activist community that has previously given support to another potential secretary of state candidate – Massachusetts Sen. John Kerry.

    NBC News' Mark Murray explains why the partisan divide over the potential nomination of U.N. Ambassador Susan Rice is intensifying.

    The decision on whether to approve the pipeline goes through the State Department.

    “If confirmed by the Senate, one of Rice’s first duties likely would be consideration, and potentially approval, of the controversial mega-project,” Scott Dodd at “OnEarth” wrote. “Rice's financial holdings could raise questions about her status as a neutral decision maker.”

    Dodd noted that “Rice owns stock valued between $300,000 and $600,000 in TransCanada, the company seeking a federal permit to transport tar sands crude 1,700 miles to refineries on the Texas Gulf Coast, crossing fragile Midwest ecosystems and the largest freshwater aquifer in North America.”

    Bill McKibben, an anti-pipeline activist, told the publication: “It’s really amazing that they’re considering someone for Secretary of State who has millions invested in these companies. The State Department has been rife with collusion with the Canadian pipeline builders, and it’s really distressing to have any sense that that might continue to go on.”

    Susan Casey-Lefkowitz, the NRDC's director of international programs, sounded a less strident tone a day later: "What's most important is that she rid herself of her holdings in TransCanada and other tar sands-related companies, and we're confident she will do that ... What's most important is that we have a good, thorough review done.”

    Danielle Droitsch, a senior attorney for the NRDC and director of the Canada Project, told First Read: “We think Ambassador Rice has the credentials to be secretary of state, but if she were nominated, and then appointed, these holdings would have to be addressed.”

    She added that “high-level officials dealing with Keystone should not have any conflicts of interest.”

    The likelihood is that, if nominated, Rice will have to divest herself of her TransCanada investment to avoid a conflict of interest.

    Will new Obama appointments come this week? Is there a way to get both John Kerry and Susan Rice into the Obama cabinet? NBC News' Chuck Todd and Time's Joe Klein join the discussion.

    The environmental group’s effort to shed light on Rice’s financial interest in TransCanada could be just an attempt, if Rice is nominated, to get a “thorough review” and make sure it has a staunch ally in trying to thwart the project, as Casey-Lefkowitz said.

    But could it also be a signal that the NRDC prefers another candidate for the job – Kerry, the other of the final two candidates reportedly being considered for the post?

    After all, environmental groups have strongly supported Kerry in the past and have a long working relationship with him. Like they would for most Democrats in a presidential election, for example, the NRDC and the League of Conservation Voters, among others, ran ads in the 2004 election boosting Kerry.

    LCV even endorsed Kerry before the New Hampshire Democratic primary that year, although it has notably not spoken out about Rice.

    Droitsch, however, would not address whom the NRDC prefers for the job.

    “We’re trying to signal that the pipeline decision has to be conflict-free,” Droitsch said. “That would pertain to any potential nominee. The president has the prerogative to nominate the person he believes is best for the position.”

    The Senate will then raise questions, however, she said. And “now is important to raise the issue ... We want to make sure that anyone who’s being considered would be free of those conflicts. That’s our primary interest right now.”

    The NRDC, which has been very involved in efforts to block Keystone, is the environmental interest group most pressing the issue of Rice’s financials.

    But others might not be as keen to see Kerry leave Capitol Hill. After all, consider that green groups already spent a lot of money trying to oust Republican Scott Brown from the Senate – and were successful.

    But if Kerry becomes secretary of state (or even defense secretary), his seat would become vacant, raising the potential for a costly and competitive special election.

    “Who cares if the U.N. ambassador has a TransCanada stock. Who cares if the head of the FDA has TransCanada stock,” said a Democratic strategist and ally of the administration who is a veteran of confirmation battles.

    “If she [Rice] were to be nominated, she would go through a process by which we look for financials conflicts. Maybe this stock would be identified as something that posed a conflict, and she would sell," the strategist said. "But she hasn't gone through that process, because she's not a nominee to anything. If they want to say that if she is the nominee, she should sell the stock, that's fine. But you can't legitimately hit her for having it now. And that is likely why NRDC backed off and no other environmental groups have piled-on.”

    What really is going on here likely has less to do with Rice and whether she should ascend to secretary of state, and more with the NRDC leveraging pressure on the president and the administration to make sure the pipeline is rejected again once it comes up for approval. And that could be soon.

    The next step in that approval phase, in fact, could come as early as next week, Droitsch said. TransCanada has applied for a shortened pipeline in hopes of having that approved – something the NRDC strongly opposes. A Supplemental Environmental Impact Statement could be released by the State Department as early as next week, Droitsch said.

    “It is critically important for there to be independent decision-makers, free of conflict of interest, who can take an independent view,” she said.

    She then tied the administration’s decision on the pipeline to climate change, an issue that has regained prominence as a result of Hurricane Sandy. In the days following Sandy’s landfall, in fact, New York Mayor Michael Bloomberg endorsed President Barack Obama for his leadership on climate change.

    How Obama decides on the pipeline “signals where the U.S. is headed in terms of importing dirty fuels, inconsistent with an administration that is committed to fighting climate change,” Droitsch said.

    “We’re confident President Obama understands the seriousness around the issues surrounding this pipeline. Approving it sends the wrong signal about our country’s commitment to climate change. Yes, he’s under a lot of pressure, but the public is very concerned about this. It’s not a decision I know he’ll view lightly.”

  • Part of Keystone pipeline to go ahead, company says

    MSNBC panelists debate whether or not the pipeline is a "no-brainer."

    By msnbc.com staff

    The company behind the controversial Keystone oil pipeline between Canada's Alberta oil fields and the United States on Monday said it would start construction of a southern leg while studying ways to address environmental concerns in the key central portion.

    The central stretch has been blocked by the U.S. State Department due to its potential impact in Nebraska, where Republicans as well as Democrats have raised concerns.

    TransCanada Corporation said it intends to apply in the near future for approval of the central section once it works out an alternative route. "We would expect our cross border permit should be processed expeditiously and a decision made once a new route in Nebraska is determined," TransCanada President Russ Girling said in a statement issued by the company. 

    In the meantime, the company noted Monday, the section from Cushing, Okla., to the Texas Gulf Coast will be built. The $2.3 billion section should be in service by late 2013, it stated, and will help to move crude oil backed up in Cushing.

    The section north of Nebraska is currently being built and the entire $7 billion pipeline, if approved, would stretch 1,700 miles.

    The project has become a lighting rod over energy policy, with Republicans claiming that President Barack Obama is undermining efforts to secure oil and natural gas from friendly sources.

    Republicans earlier passed a bill that imposed a Feb. 21 deadline to approve or deny the project, but the Obama administration is waiting for Keystone's alternative before it makes a decision.

    THE BOTTOM LINE: How Keystone could raise oil prices for some

    The Obama administration had suggested development of an Oklahoma-to-Texas line to alleviate an oil glut at a Cushing storage hub.

    White House press secretary Jay Carney said Obama welcomed the announcement.

    "Moving oil from the Midwest to the world-class, state-of-the-art refineries on the Gulf Coast will modernize our infrastructure, create jobs, and encourage American energy production," Carney said in a statement. "We look forward to working with TransCanada to ensure that it is built in a safe, responsible and timely manner, and we commit to take every step possible to expedite the necessary federal permits."

    TransCanada itself noted that the Obama administration had not ruled out the pipeline. "Reapplying for the Keystone XL permit is supported by words used in President Obama's statement January 18, 2012 when he said the denial of the permit was not based on the merits of the pipeline but rather on an imposed 60-day legislative timeline to make a decision on the project," it stated.

    The overall project stalled at the State Department level in January as environmental objections over the pipeline's route and increased development of the Alberta oil sands boiled over, raising difficult political problems for Obama as the election year got under way.

    Environmental groups have fought the pipeline tooth and nail, arguing that it would increase pollution from Canada's oil sands production and that jobs estimates are inflated.

    The State Department is involved because the project would cross into the U.S. from another country.

    Reuters and The Associated Press contributed to this report.

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