February 9, 2015
Will the Keystone XL Pipeline Help the Declining Oil Industry?
TransCanada hopes to bring oil safer to Canadian and U.S. shores through the Keystone XL Pipeline project. The full Keystone project, of which "XL" is its final leg, aims to transport oil from underground, trekking close to 2,000 miles from Alberta, Canada to the Gulf Coast of Texas. While transporting oil underground can avert disasters involving train wrecks above ground, the Keystone XL Pipeline would be carrying one of the world’s dirtiest fuels, which is tar sands oil. According to environmentalists, the pipeline could devastate not only ecosystems but also the most basic sources of human life: water.
Supporters of the Keystone XL pipeline, however, are saying that there are more upsides than downsides to the project. One of them is the generation of new jobs for Americans, which would help in the revitalization of the U.S. economy. The Environmental Assessments (EA) and Environmental Impact Statements (EIS) have both been completed so supporters are saying environmentalists don’t have to worry about the project too much.
But apart from the heat that the project is facing from green groups, it’s also being criticized for its possible effect to current levels of oil prices. Oil prices for the past 7 months have been very low, negatively affecting the petroleum industry. If in case the Keystone XL will be completed, naysayers of the project say that putting oil to a market that’s already saturated would create an unnecessary surplus helping to keep oil prices relatively depressed.
Perhaps the strongest point of the Keystone XL supporters is that while the project may or may not further reduce oil and fuel prices, it will allow oil to flow to refineries quickly and more economically. But whether or not the project will indeed be safe for the environment or not, no one will know until the actual project starts running.
If successful, the Keystone XL project can also become a potential model for companies in the oil and gas business. Unaoil, a firm with major operations in the Middle East, has just opened a strategic operating base in North Rumalia in order to support its growing operations in Iraq. With Keystone XL as its model, the oil and gas firm could supply oil much quicker to its operating bases throughout Iraq in the future.
To date, the US Senate has approved the pipeline. The House of Representatives is likely to do the same in an upcoming vote. President Obama has spoken of a veto, yet it's feasible that the new Congress will find a way around his "No" signature.
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