A Reminder of Jobs in Limbo

Mark Green
Posted December 10, 2013

Saw the tweet below from energy author/scholar Daniel Yergin on the startup of TransCanada’s Gulf Coast Pipeline, linking the crude oil hub in Cushing, Okla., with refineries along the Texas Gulf Coast:

Pres Obama last year with pipes of #KeystoneXL southern leg - now starting up to Gulf Coast. pic.twitter.com/sXdSxbL6bm

— Daniel Yergin (@DanielYergin) December 10, 2013

Certainly, the shot of President Obama standing in front of stacks of steel pipe last year is a reminder that he went to Oklahoma to illustrate his administration’s support for the 485-mile project.

Yet, commercial startup of the project also reminds that the Gulf Coast Pipeline is part of the larger Keystone XL project, which would allow more Canadian oil sands to be delivered to U.S. refiners. The Keystone XL’s northern portion remains on the drawing board and workers idle on the sidelines after more than five years of federal review.

Opening the Keystone XL’s southern portion underscores the cost of delaying the northern portion – measured in new U.S. jobs, economic stimulus and energy security through a stronger energy partnership with Canada. In the time the administration has been considering whether to grant a cross-border permit for the northern leg – which also would deliver oil from the U.S. Bakken region – the entire project could’ve been built twice by now.

TransCanada has started injecting crude oil into the Gulf Coast Pipeline, toward putting about 3 million barrels into the system over the coming weeks. When up and running it will carry about 700,000 barrels per day. The Oklahoman newspaper has additional detail:

“The Gulf Coast Project is a significant step forward in the move to transport oil from Cushing to U.S. Gulf Coast refineries,” (TransCanada spokesman Shawn) Howard said. He said the pipeline was built using advanced safety standards featured in no other pipelines in operation.

The full Keystone XL would be integral to U.S. energy security because it would bring more crude from Canada, our largest supplier of imported oil. It would be a key part of a strategy that could see 100 percent of the United States’ liquid fuel needs supplied from North American sources by 2024.

The fact is growth in oil production in the U.S. and Canada – by a combined 2.1 million barrels per day since 2005, according to the U.S. Energy Information Administration – is being felt in the global crude market. Catrina Rorke of the American Action Forum writes:

Production from the six largest shale oil deposits in the U.S. increased output by 800 thousand barrels per day in the last year alone. Enabled by advanced technologies and a bullish exploration industry, North American production increased from 18 to 20 percent of global supply. Growth in North American oil production is also a stabilizing force on global price signals.

North American oil production, Rorke writes, is allowing the global crude market to absorb unanticipated supply disruptions elsewhere in the world. That’s a good thing.

Construction of the full Keystone XL would increase the positive impact of the North American energy revolution. So, while the Gulf Coast Pipeline coming online is a positive development, it’s also a reminder that there’s more work to be done – starting with presidential approval of the full Keystone XL project.