Obama Blocks Proposed Canada – Texas Oil Sands Pipeline

US President Barack Obama has rejected a plan for the building of a multi-billion dollar pipeline that would have carried crude oil from Canada to the US state of Texas. The 18 January announcement came after weeks of debate over the economic and environmental implications of the proposed Canada-US oil sands pipeline, with an array of interested groups weighing in on the pros and cons of the massive infrastructure project.

The pipeline - which aimed to provide a direct line of crude oil and bitumen from the Athabasca Oil Sands in Canada’s western province of Alberta to a range of refineries in the US - has been a lightning rod for controversy since the idea was floated in 2005.

Environmental groups say the massive carbon footprint related to extracting and refining Canadian sand oil, plus the potential for a catastrophic breach of the pipeline in an environmentally sensitive area, made the project environmentally irresponsible. However, supporters say the pipeline offered safe and reliable access to oil with significant economic benefits for both countries.

According to official data, the US$7 billion project would transport 700,000 barrels of oil a day.

In early July 2010, House Energy and Commerce Committee chairman Henry Waxman urged the State Department to block the Keystone XL project.

Supporters of the Keystone XL project had said that successful construction of the pipeline would mean a reduction in the reliance on the Middle East for petroleum and the creation of 20,000 temporary construction and manufacturing jobs, with hundreds of thousands of indirect jobs to follow in the coming decades. However, environmental groups claim that these numbers are greatly exaggerated.

Sand oil problematic for pipelines?

Environmental groups, including the Washington-based Natural Resources Defense Council (NRDC) say that diluted bitumen, a substance within Canada’s crude oil sands, is more corrosive than lighter grades of oil, fuelling concerns about potential pipeline breaches.

However, a study done last year for the provincial government of Alberta found that diluted bitumen was no more corrosive to pipelines than conventional oil, but noted that there was no definitive and extensive research on the subject. A US safety regulator will examine this exact issue in a new study to be completed in July 2013.