By Andrew J. HawkinsKeystone XL pipeline could be the Keystone between Canada and the Arctic, with the first shipment of oil from the proposed $7.8 billion project expected to start arriving in 2018.
Keystone has already won the approval of the U.S. Federal Energy Regulatory Commission to begin construction of the controversial pipeline that would cross through four states and travel 4,700 miles from Hardisty, Alta., to Kitimat, B.C., before starting a journey across Canada’s Arctic.
A key component of the pipeline would be the 1,200-mile long (2,100km) Keystone-Crosstown pipeline that will carry tar sands crude oil from Alberta, Canada, through Nebraska and Wyoming, before returning to refineries along the Gulf of Mexico.
The Keystone XL pipeline would provide a much-needed source of energy to the U,S.
and Canada as well as to the world’s biggest energy producer, which relies on the energy it generates to supply electricity and heating to about half the world.
But while the pipeline is a major piece of the energy puzzle for the U., it is facing stiff competition from cheaper alternatives such as oil sands and shale.
A report released this week by the National Academy of Sciences, a research organization that promotes a more sustainable future, said the Keystone XL project could provide Canada with between 4 million and 8 million barrels of oil a day (bpd) from 2020 to 2026, about the same as a year and a half of existing production.
But that is less than a quarter of the oil currently being produced in the United States.
Canada is the only country in the world that imports the vast majority of its oil from oil sands, said Steve Linton, director of the Center for Energy Policy and Finance at the Union of Concerned Scientists in Washington.
“The Keystone pipeline is an energy security issue, but it’s an energy crisis issue as well,” he said.
The pipeline’s proponents have argued that it would allow Canada to diversify its energy supply by shipping its oil to markets that currently export to the United Nations and Europe.
“There’s a lot of work to do in terms of what happens with Keystone,” said Linton.
“But it is a really important piece of energy infrastructure.”
According to the Energy Information Administration (EIA), the Keystone pipeline could produce about 800,000 bpd of oil annually by 2026.
The Keystone XL is a bit more than half of that.
The EIA said the pipeline’s construction could be completed in a matter of years, and that the first shipments would be shipped from Hardestisty to Kitinat in 2021.
The Energy Department expects the pipeline to carry 8.5 million bpd from Hardstisty through 2020, with more shipments expected in the future.
But with Canada’s tar sands and oil sands producing at about 70% of the global oil output, Linton said the project could have a significant impact on the U’s ability to compete globally.
“In my opinion, the Keystone Pipeline will not be able to supply Canada with the energy that it is looking to get, which will ultimately hurt Canada,” he added.
“If we’re looking at getting energy from the tar sands or the oil sands that we are exporting to Europe, we need to get that from somewhere else.
It will be a challenge.”
In addition to its oil and natural gas reserves, the United Kingdom is the world leader in oil sands production, producing about a third of the world production.
It is also home to the largest number of oil refineries, and its oil sands have also been a major driver of the construction of new pipelines and oil infrastructure.
In 2010, British Columbia became the first province to approve a $3.5-billion plan to export oil from its tar sands reserves.