Part One – A Summary.
What is the proposed Keystone XL pipeline?
It was the latest project to move DilBit, diluted Bitumen, from Canada to oil refineries in the United States.
What is Bitumen?
Bitumen is tar (think the La Brea Tar Pits) or natural asphalt (it is a key component of the asphalt we drive on). Bitumen after extensive processing and refinement can become a form of fuel oil (gasoline, diesel, jet fuel).
With the high cost (economically and environmentally) of extraction and processing of Bitumen, it has only recently became profitable due to the high price of a barrel of oil.
So why the pipeline?
Canada has one of the world’s largest of deposits tar sands or oil sands, which contain Bitumen. The United States has the refineries to convert Bitumen. It is just a matter of getting it there.
So what’s the deal with Keystone XL?
It is a proposed pipeline to bring DilBit to Texas refineries. In order to cross from Canada into the United States the pipeline must be approved by the President.
What’s the problem?
Earlier President Obama had approved similar cross-border pipelines. The Keystone XL project was slowed to be approved because of its proposed route through the Sand Hills, an environmentally sensitive area. Located in Nebraska, the Sand Hills lies just above the largest source of water in the Midwest. A leak would prove to be an environmental disaster.
In November of last year, after years of battling with environmentalist and Nebraska politicians (the Republican Governor and a Republican Senator), TransCanada, the builders of the pipeline agreed to move the route away from the Sand Hills.
Problem solved, right?
All that was needed now was a review of the new proposed route by the State of Nebraska.
OK, so after this review the President would approve the pipeline?
Most likely the President would have approved the project.
Why didn’t the President approve the project?
In December of 2011 (just days after the agreed change to the route) the Republican Congress passed legislation to require the President to approve or deny Keystone XL as is within 60 days.
On January 18th the President denies the permit citing inadequate environmental examination (the new route through Nebraska).
Part Two: What You Need to Know about Bitumen
Part Three: The Money and Politics of Tar
Part Four: The Future Collapse of the Oil Industry
Mike James is an irregular contributor to the O.B Rag. Mike began his research on Keystone XL to better understand and address the recent rhetoric surrounding the President’s denial of the project.