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  November 5, 2015

Regardless of Keystone XL, Tar Sands Oil Will Still Flow to the Gulf

DeSmogBlog's Steve Horn says the pipeline company Enbridge is still planning a $5 billion terminal expansion. Note: After the publication of this story, the State Department announced it rejected TransCanada's request to suspend its review of the Keystone XL pipeline.
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Steve Horn is a journalist based in Madison, Wisconsin. His work has been featured in The Guardian, The Nation, and Truthout. He is also a Research Fellow at DeSmogBlog.


SHARMINI PERIES, EXEC. PRODUCER, TRNN: Welcome to the Real News Network. I'm Sharmini Peries coming to you from Baltimore.

On Monday TransCanada, that is the company that wants to complete the controversial Keystone XL pipeline that would carry 830,000 barrels of dirty tar sands from Alberta, Canada to U.S. gulf oil refineries, has asked for a delay from the State Department. President Obama has gone on record, as have all the leading Democratic presidential contenders, including Hillary Clinton, that they would veto the project. Is this a victory, as many environmentalists are saying so, or do the various other pipelines that have been built on Obama's watch undermine such a stand?

With us to discuss all of this is Steve Horn. He's joining us from Madison, Wisconsin, and he's an investigative journalist. He's also a research fellow at DeSmog Blog. Thanks so much for joining us, Steve.

STEVE HORN: Thanks for having me, I appreciate it.

PERIES: So first of all, let's clear what this pipeline is all about by just discussing what's the difference between this and the other ones that has already been built.

HORN: Yeah. The TransCanada, I think it's often mislabeled and mis-stated what the Keystone XL pipeline is. Because people in Washington, DC, meaning politicians in Congress and also even environmental NGOs often mislabel it as the Keystone pipeline. The Keystone pipeline was actually approved by the Bush administration back in 2008. That is a segment that goes from Alberta tar sands and then downward to various parts of the United States, including, part of it goes to Illinois. Another part of it goes to Cushing, Oklahoma. So there's already a large thing called the Keystone pipeline that's been in existence for seven years.

Then there's the Keystone XL southern leg that's now called the Gulf Coast pipeline, that connects to that original Keystone at Cushing and goes down to the Gulf Coast. So TransCanada already, as we speak, has a pipeline that goes from the Alberta tar sands down to the Gulf Coast. So when you see all these news stories popping up in the business press, the mainstream media, and all over the place, you see the Keystone XL described as a pipeline that goes from Alberta down to the Gulf Coast. Well, they already have that. What the Keystone XL is, now, what we're talking about, what's in play in Washington, DC at this point in the State Department is the segment that goes from Alberta and then connects to Cushing. It'd be another segment, because there already is one. So all it is is an extra [inaud.], it would bring even more more tar sands.

But that is all to say that there already is quite a bit, from TransCanada's system alone, not to talk--we'll [talk] about Enbridge later. TransCanada's already sending huge amounts of tar sands down to the Gulf Coast, Gulf Coast refineries.

PERIES: And this is, you're probably getting this information from the new report that's out from RBN Energy. How much of Canadian crude, especially the [heavy] sands crude, is hitting the Gulf now?

HORN: It's a little bit hard to quantify, because companies keep this information close to the chest. But RBN Energy is sort of an intelligence-gathering resource for people who are [invest] in energy. And they put out all kinds of reports. They've put one out, actually, coincidentally on the same exact day as this Keystone XL announcement--the Keystone XL is not even part of the report, which to me is a little bit telling in terms of how much people in the industry and how much investors really care about this northern leg.

But the report is, it's mostly about Houston area infrastructure. And really you see--you see, the fact that there are huge amounts, almost unprecedented amounts of oil from Canada and from the U.S. right now hitting the Gulf. So it's always been a lot of oil floating around in the Gulf. Most of it has been imported from other countries. Right now we're seeing record amounts of crude because not only of TransCanada's system, which we discussed, but Enbridge's system. What I've been calling the Keystone XL clone. It's a combination of pipelines that all have different names, but at the end of the day this pipeline system connects, and it's bringing down huge amounts of oil, tar sands oil down to the Gulf. And that's not even to discuss the huge amounts of fracked oil going down to the Gulf.

And so today we see a story that lands in the Wall Street Journal, headline being Enbridge is now investing $5 billion in storage down in the Gulf Coast for oil that will hit it, and potentially for oil exports. So Enbridge is--and I think if you look at what the industry is actually doing, it does give, I think, a much more clear picture of what's happening than just--if we only hone in on the Keystone XL pipeline it seems like this huge victory. But if you look at the bigger picture it's pretty, it's obviously a victory in some ways for talking about keeping some tar sands out of pipeline systems. But we can't ignore these developments that are happening and being discussed widely in the business press and in the investor press.

PERIES: Now, there's a large body of evidence that point to the fact, and most environmental scientists are saying, what's in the ground must stay in the ground. Building this pipeline will be a step away from that demand on the part of the scientists, and particularly leading up to Paris. And our new Prime Minister in Canada, Justin Trudeau, is taking a large delegation to Paris with him. This is quite different from what the scientists as well as the environmental movement is demanding. You think this is reflective, this request for a pause, is reflective in terms of a shift in environmental policy of the new government?

HORN: There's a number of factors at play, and I think one of them that we have to be humble about, at least people who care about the environment and the climate, is that there's only a certain--this is probably the most pessimistic outlook, and then I'll give a more, sort of more positive outlook. But I think the most pessimistic one is that there's only a certain amount of storage that's even available for storing crude oil in the Gulf Coast. And so one could look at this simply as a decision to punt on this piece of a pipeline that just helps sort of keep things stable down in the Gulf for a while. It's already--storage is maximized, and there's really not much of a place to keep this oil. And that's why there's a debate right now in Congress about exporting that oil. That's why Enbridge is now moving to create crude oil export facilities down in the Gulf. So one could say that it's just simply waiting until more infrastructure is in place, and then maybe that will get moving.

But I think a more, a less pessimistic outlook is that of course the activism that's taken place in the past four, five years around the Keystone XL northern pipeline, or the leg of it, has been effective. It has stopped it. And four or five years ago it looked like a sure thing. Even back then Hillary Clinton, when she was secretary of state, said that she was very likely to approve that thing. And now she's running as president and saying that she doesn't support it.

And so that combined with the new Canadian government in place, and also what you're talking about is that Paris is about to take place, the United Nations climate summit. It would look pretty terrible public relations-wise for the United States or Canada to improve a project like this in the months leading up to the summit. They look like a whole lot more responsible countries going into Paris by putting a halt on this project for now. Especially given the information that came out yesterday in the press, that China is emitting much more carbon in the atmosphere via coal, so it makes the United States and Canada look like more responsible countries than China, so we have geopolitical rivalries at play.

There's all kinds of factors. It's hard to pinpoint one. But that is all to say that part of this, of course, is a grassroots victory. And then part of it is a whole, complex array of data that they're dealing with here that makes it hard to say it was only because of grassroots pressure.

PERIES: Right. Then finally, given that Hillary Clinton has actually switched her position now, offering to veto such a pipeline, why do you think this shift has taken place?

HORN: Well, Hillary Clinton of course is trying to gain support of people who care about the environment as she runs for president in 2016. Lots of those voters right now support Bernie Sanders. Of course, Bernie Sanders, my take is he's probably not going to be around four or five months from now as a serious presidential contender. And so a lot of those people that were supporting Bernie will want somewhere to go. And so Hillary Clinton wants to put herself out there as someone who cares about the environment, who cares about the climate.

And of course going back to where this discussion began, Keystone XL northern leg is not quite as important as some would think it is. That's consistently talked about in the business press. There's already tons of crude oil hitting the Gulf Coast, record amounts. So it's not really all that bold a position for Hillary Clinton to take. And if it was my take is that she wouldn't be taking this stance. Basically, [inaud.] I see it as mostly a cynical political maneuver on her part to shore up her environmental base as she gathers steam for her presidential campaign in 2016.

PERIES: All right, Steve. I thank you so much for joining us today.

HORN: Thanks for having me.

PERIES: And thank you for joining us on the Real News Network.


DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.


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