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Keystone XL Pipeline Construction

THE ISSUE: Keystone XL pipeline construction

BACKGROUND: The Keystone XL pipeline is a $5.3 billion project that could transport up to 830,000 bpd of crude oil from Canada and the northern U.S. to the oil trading hub of Cushing, Okla., and on to the U.S. coast of the Gulf of Mexico, where the majority of U.S. refining assets are located. Before Keystone XL can be built, the U.S. State Department must approve the project because it crosses the U.S. border with Canada.  The State Department’s Final Environmental Impact Statement, published in August 2011, concluded there would be no significant negative impact from the project. However, a few months later, the State Department announced that it would delay its decision on the pipeline.

On February 1, 2014, the State Department released its final supplemental environmental impact statement on the proposed Keystone XL pipeline and found no major climate change or security concerns. This was viewed as a positive development for the beleaguered project, since the administration indicated it would only be approved if it did not drive up greenhouse gas emissions.

The statement started a national interest determination process at the State Department that included a 30-day public comment period and 90-day period for at least eight other federal agencies to weigh in. But the review process set no deadline for the secretary of state to make a final recommendation to President Obama. Congress has demonstrated strong support for approval of the pipeline project. Both chambers have submitted bipartisan letters of support for the pipeline project.

MPC’S POSITION: We support approval of the Keystone XL pipeline.

WHY WE TOOK THIS POSITION: Additional crude oil supplies from Canada – a stable, friendly neighbor that is the United States’ largest trading partner – enhances our nation’s energy security. Also, pipelines are by far the safest method of transporting crude oil, and the safety of modern pipelines is better than ever. Keystone XL’s performance will be regulated by the federal Pipelines and Hazardous Materials Safety Administration, which requires rigorous safety protocols.

From an economic standpoint, an independent study found that construction of Keystone XL should provide significant, positive contributions to U.S. energy security and the U.S. economy valued at more than $20 billion. The study further concluded that once the pipeline is operational, the states along the pipeline route are expected to receive an additional $5.2 billion in property taxes during the estimated operating life of the pipeline. The pipeline project is expected to directly create more than 20,000 high-wage manufacturing and construction jobs across the U.S., stimulating significant additional economic activity.