Canada wants Keystone XL.
Canadians are a quiet lot. And that’s a good thing. Unfortunately, that also lets more vocal elements dominate the discussion around issues important to both our countries – like the future of the North American economy and energy security.
We are writing to tell you Canadians support the Keystone XL pipeline and the economic prosperity – jobs and opportunity – it will create for both our great nations. Please consider the following carefully as you enter the highest office of our most valuable ally.
Keystone XL has been deemed in the US national interest. The project has been going through the U.S. regulatory process since 2008, including multiple environmental reviews and periods of public comment. In March 2017, the U.S. Department of State determined the pipeline to be in the US national interest, based on its “potential to bolster U.S. energy security by providing additional infrastructure for the dependable supply of crude oil, its role in supporting, directly and indirectly, a significant number of American jobs and provide increased revenues to local communities that will bolster the US economy, its ability to reinforce [the US] bilateral relationship with Canada, and its limited impact on other factors considered by the department” including overall greenhouse gas emissions and demand for heavy oil in the U.S. Gulf Coast refining market.
Another important fact is that U.S. Gulf Coast refiners want more Canadian heavy oil. Many refineries in the U.S. Gulf Coast refining market, which Keystone XL would connect to, are specifically designed to process heavy oil. Canada is the world’s largest heavy oil and oil sands producer. It’s an excellent match, but the supply and demand locations are more than 3,000 kilometres apart. In addition, U.S. Gulf Coast refineries have historically been largely supplied with oil by countries like Venezuela and Mexico; regimes that Washington, D.C.-based Freedom House ranks as “Not Free” and “Partly Free,” respectively, compared to Canada, which is “Free.”
Respectfully, your information regarding Canada’s oil sands appears to be outdated. The oil sands greenhouse gas intensity is in the range of the US average refined crude and is improving. In 2014, analysis by IHS Markit using 2012 data found the greenhouse gas emissions per barrel from oil sands production to already be within the range of other crude oils refined in North America. The trend has continued to improve. In 2018, an economic analysis found that average oil sands emissions intensity had dropped by approximately 14 per cent since its original study. Overall, researchers found that oil sands average emissions per barrel decreased by 21 per cent between 2009 and 2017. Researchers acknowledged the study did not include some potentially transformational technologies, even though many are advancing, which may indicate greater potential for GHG intensity reductions in the future.
Keystone XL is supported by sound economics. A group of “strong, credit-worthy counterparties” have signed 20-year shipping agreements representing approximately 70 per cent of the capacity on Keystone XL, owner TC Energy said this April. The project also has financial backing from the Government of Alberta, based in part on rigorous vetting by outside industry experts to ensure the success of the project while minimizing risk to taxpayers. Alberta expects to sell its interest in the pipeline for a profit after construction is completed, after which it is expected to provide a net return of over $30 billion to Alberta taxpayers through royalties and higher prices for Alberta oil over the next 20 years.
Keystone XL will provide jobs and revenues for communities in Canada and the United States. Keystone XL will provide substantial economic opportunities for communities along its route, including jobs and property taxes, which help build roads and support schools and hospitals. Since going into service in 2010, the Keystone pipeline has generated $81 million in property tax revenues in Canada and $419 million in the United States. In its first year of operation, Keystone XL is expected to generate additional property tax revenue of more than $7 million in Alberta and Saskatchewan and more than $55 million in Montana, South Dakota and Nebraska. Overall, TC Energy expects that Keystone XL construction will generate 17,000 direct, indirect and induced jobs in Canada and 42,000 in the United States, for a total of 59,000 employment opportunities. Construction is also expected to contribute $3.4 billion to U.S. gross domestic product and $2.4 billion to GDP in Canada.