Keystone Pipelines System is an oil pipeline system that distributes crude oil in Canada and the United States. This pipeline runs from the Western Canadian Sedimentary Basin in Alberta to refineries in Illinois and Texas. In addition, fat is also transported to oil tank farms and an oil distribution center in Cushing, Oklahoma. Today, we’ll know Who Owns Keystone Pipelines?
This system is a four-phase system which, when completed, would have been able to transport 830,000 barrels of Alberta oil from Canada to various refineries in the U.S. in one day. The proposed phases for the Keystone Pipeline System were Keystone Pipeline (phase 1), Keystone-Cushing Project (Phase 2), Cushing Marketlink Project and Houston Lateral Project (Phase 3), and the Keystone XL Pipeline Project (Phase 4). However, only three out of the four proposed phases completes as canceled due to issues concerning the protection of the environment.
The Keystone Pipeline System commission in 2010. It owns by TC Energy Corporation (formerly known as TransCanada Corporation), and as of 31st March 2020, the Keystone Pipelines Project holds by the Government of Alberta. The Alberta-based TransCanada Corporation ( currently TC Energy Corporation) proposed this pipeline system in 2005. Although the project received backlash from the Communications, Energy, and Paperworkers Union of Canada to reduce employment for the Canadians and reduce Canada’s energy security, it was approved by the National Energy Board of Canada in 2007. ConocoPhillips and the TransCanada Corporation collectively owned the project when they bought fifty percent of the stakes of the Keystone project in 2008. However, the TransCanada Corporation became the sole proprietor of the project when they acquired the interests of ConocoPhillips in 2009.
The Keystone Project proposes to complete in four stages. Phase one would deliver the Tar Sand of Alberta to the different refineries in Illinois. The second and third phases of this project would deliver this oil from Illinois to different distribution centers and refineries all over America such as Texas and Oklahoma. The fourth phase of this project is known as the Keystone XL (KXL) project, however, this could not be completed as the permission for its continuation was revoked by the current U.S. government. Only 8 percent of this phase has complete to date.
The main reason for the cancellation of this project is the threat that it poses to the environment. Environmentalists fear that the potential for air pollution, oil spills, and leakage are of concern as they could pollute supplies and harm migratory birds and other wildlife. It has lead to constant opposition and protests throughout the construction of the Keystone Pipeline System. One of the most pronounced protests was the rally of 2013, where almost 50,000 people protested against this project in Washington. These protests and environmental concerns might have been the reason for the KXL (Keystone Project – phase four) Project to be canceled by the current President of the United States, Joe Biden.
Who owns Keystone Pipelines?
The TransCanada Corporation first proposed the Keystone Pipeline Project in 2005. The rights to this project were jointly owned by ConocoPhillips with TransCanada Corporation when they bought 50 percent of the shares of the Keystone Project in January 2008. However, in August 2009, TransCanada Corporation became the sole owner of this project when they acquired ConocoPhillips’ interest. After the project’s first phase was commissioned in 2010, the U.S. Environmental Protection Agency (EPA) criticized the company for neglecting the environmental concerns about oil spill safety plans, safety issues, and greenhouse gas emissions.
However, it did not stop them from completing the second and third phases of this project. As a result, they could layout almost 4,784 kilometers of pipeline connecting Canada and the United States. But the fourth phase could not be completed as it received backlashes from the current U.S. government. Therefore, as of 31st March 2020, the proprietorship of the Keystone Pipeline Project has been transferred from the TC Energy Corporation (formerly TransCanada Corporation) to the Government of Alberta.
What is the status of the Keystone Project?
After clearing all the hindrances, acquiring all the necessary state and federal permits, the Keystone Project was finally commissioned in 2010. The first of the four phases, which connected Hardisty, Alberta, Canada to Patoka, Illinois, USA became operational in June. The second phase of this project which joined Steele City, Nebraska, to a tank farm in Cushing, Oklahoma, was completed in February 2011 that made the pipelines capable of delivering almost 590,000 barrels of oil per day to the refineries.
The Gulf Coast Extension Project, part of Phase Three of the Keystone Project, was completed in 2014. This extension connected the tank farm of Cushing to refineries in Port Arthur, Texas. However, in 2015, the Obama administration vetoed the construction of the Keystone XL project citing economic and environmental concerns. Still, in 2017, when the Trump government can come into power, the Keystone XL project was revived, which sought out to transport almost 830,000 barrels of oil from Canada to The Gulf Coast of the U.S. As of 2021, the Keystone XL Project, however, has been canceled by the Biden Administration as they have revoked the permit for its construction citing economic and environmental concerns, as the Obama administration.
Environmental Concerns and the future of Keystone Pipelines
The Keystone Pipeline Project has faced considerable opposition and protests from environmentalists and the general public to threaten the environment. The main threat that this pipeline system will contribute to is oil spills and leakage. As with any other pipeline system used for transportation, finding out the exact area of leakage is very hard, and it may take a long time before the leak can be found out and fixed. However, it will have a devastating effect on the environment and the wildlife and organisms thriving in those environments. Experts say that an oil leakage in the Ogallala Aquifer could ruin drinking water and devastate the U.S. economy. It is so because Ogallala Aquifer is one of the largest freshwater bodies in the U.S. and the world that provides fresh water to the residents of the U.S. and supports the $20 billion agricultural economies.
This project will not only have a devastating environment on the ecosystems. Still, it will economies contribute to global warming as this transport system will facilitate easy transportation and usage of these fossil fuels, which would, in turn, increase the emission of greenhouse gases into the atmosphere contributing to the already rising global temperatures. As a result, many protests have been carried out against this project by American residents and economists. The most influential rally was in 2013 where almost 50,000 residents came out to protest against this project in Washington.
Thus, looking at these protests and environmental concerns, it is doubtful to provide other is projects; however, only the Biden administration will permit the continuation of this project. Well, not unless the Trump administration or other such administrations come into power.
Link to an article that examined the impact of these pipelines on the environment: https://www.labor4sustainability.org/articles/5-reasons-why-the-keystone-pipeline-is-bad-for-the-economy/
Conclusion
In conclusion, the Keystone Pipeline Project, owned by the Government of Alberta, formerly owned by TC Energy Corporation, would surely boost the economy of the United States, but the risk is also high. This main being the environmental damage that would be caused in case of any mishappenings such as oil spills or leakage. Therefore, the chances of the Keystone XL project is a result; only complete are very slim amidst these protests and environmental concerns.
Frequently Asked Questions
- Will the price of oil and other associated products fall?
Although many energy lobbyists in favor of the completion of the Keystone Pipeline Project claim that the price of oil and other associated products will fall after the completion of this project due to the reduction in transportation costs, research and studies say otherwise. The NRDC (National Resource Development Corp) of the U.S. has found out that the majority of the oil transported by these pipelines would be sold at the market overseas, potentially increasing oil prices in the United States.
Link to the study published by NRDC on this matter:
https://www.nrdc.org/stories/dirty-fight-over-canadian-tar-sands-oil
- Will new job opportunities be available after the completion of this project?
As with the claims of reduced oil prices, the claims for creating new job opportunities are also and have been said to give weightage to the completion of the KXL project. However, contrary to what TC Energy Corporation has stated about creating 119,000 job opportunities, reports state that the number of workers required to complete this project would be less than 2,000. It also says that only about 35 workers would be needed to operate this pipeline system after its completion.
Link to the study published by NRDC on the creation of job opportunities:
https://www.nrdc.org/stories/what-keystone-pipeline#controversy
- How much have companies invested in the Keystone Pipeline System?
TransCanada Corporation has spent around $3 billion for pipeline construction of the first three phases. TransCanada Corporation has estimated that it would take around $5 billion to complete the KXL project and about $8 billion in total to complete the whole project.
