Research & Commentary: Keystone XL Pipeline

Published July 26, 2011

The Keystone XL Project is an approximately 1,661-mile pipeline expansion project that will transport crude oil from Canadian oil sands to U.S. refining markets. The pipeline, three feet in diameter, would extend from Alberta, Canada to Texas, tapping into existing pipeline infrastructure in Nebraska and Oklahoma.

TransCanada Keystone Pipeline, LP applied to the U.S. Department of State in September 2008 for a Presidential Permit. This process, in addition to other federal permits, triggered the State Department to lead an environmental review under the National Environmental Policy Act (NEPA). NEPA is a procedural statute and does not mandate that an agency base decisions on their environmental impact, only that the impacts of that action and any alternatives be considered. The Presidential Permit requires only that the proposal be in the national interest.

Some environmental groups oppose the pipeline expansion, arguing it will increase Canadian oil sand production. A study commissioned by the U.S. Department of Energy determined, “production levels of oil sands crudes would not be affected by whether or not [the pipeline expansion] was built.” The likely alternative to the Keystone XL Project is a series of pipelines to the British Columbia coast. The Energy Department study concludes those pipelines would open Canadian oil sands to Asian markets and substantially increase U.S. dependence on Middle Eastern and African crude oil.

The recent pipeline spill into the Yellowstone River has evoked concerns about the project. The State Department’s Draft Environmental Impact Statement, however, concludes, “the probability of a large spill occurring is very low, and, consequently, risk of environmental impacts is minimal.” Supporters of the bill refer to it as a “jobs bill” because of the private-sector investment it will enable. TransCanada estimates the $7 billion project will directly create 15,000 manufacturing and construction jobs in 2011–2012. The value to be added to the economy as a whole from the project is estimated to be $20 billion.

The following documents provide additional information about the safety and benefits of the Keystone Pipeline.

Keystone XL Assessment Prepared by EnSys Energy for the U.S. Department of Energy (“EnSys Study”)
This exhaustive government-procured study analyzes the projected impacts of the Keystone XL Project on U.S. refining, oil markets, and import dependency. The study finds a combination of increased Canadian crude imports and reduced U.S. product demand could essentially eliminate Middle East crude imports in the long term.

Keystone Pipeline Project: Key Issues
A Congressional Research Service study describes the Keystone XL Project, the regulatory background, and arguments for and against the pipeline.

Supplemental Draft Environmental Impact Statement Executive Summary
The U.S. State Department executive summary details the findings of its second round of environmental review of the Keystone XL Project. The supplemental review reiterated the need for and potential impacts of the project discussed in the draft environmental impact statement.

EPA Comments on Supplemental Draft Environmental Impact Statement
Responding to the State Department’s review of the Keystone XL Project, the U.S. Environmental Protection Agency stated it has “insufficient information” to ascertain the environmental impact of the action.

TransCanada’s Keystone XL Pipeline Website
TransCanada, the pipeline’s commercial operator, addresses commonly held myths about the pipeline and the crude oil it will transport.

Allow Keystone Oil Pipeline Expansion
The USA Today editorial board argues the Keystone XL Project project should move forward and that environmental concerns, while valid, should be viewed in historical context and compared with other pipeline projects.

Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this and other topics, visit the visit Environment & Climate News Web site at, or The Heartland Institute’s Web site at, and PolicyBot, Heartland’s free online research database, at

If you have any questions about this issue or the Heartland Web site, contact Heartland energy and environment legislative specialist John Monaghan, at 312/377-4000 or [email protected], or Heartland Senior Fellow James M. Taylor, at 312/377-4000 or [email protected].