Important Keystone Report Issued, Still No Sign of Decision

Late last week, the U.S. State Department issued its supplemental environmental impact statement on the proposed Keystone XL pipeline. The Keystone XL pipeline would transport petroleum from Canadian oil sands to refinery operations around the Gulf of Mexico. While the report stopped short of offering a recommendation to the Administration, advocates on both sides are using its findings (or lack of findings) in the report to support their positions. The State Department will now allow for a 45-day comment period and is intending to schedule a public hearing in Nebraska.

Industry was pleased with the report's stance on climate change and impact on jobs. It indicated that building the pipeline would create 42,100 jobs during the one- to two-year construction period; however, once built the pipeline would have "negligible" impact on the economy and would only support 35 permanent jobs for its operation. In all, the project would generate approximately $2 billion in construction revenues with another $3.3 billion in other spending.

Environmentalists were upset by the report's description of the project's impact on climate change as it noted that the development of the Canadian oil sands will occur regardless of the completion of the Keystone pipeline and so the project has little impact on the issue. The report also avoids an assessment of the project's impact on water quality, another key issue for environmentalists.

For its part, the Administration noted that the report is a draft document to enable public feedback and was looking forward to the comment period.