Imagine you are a farmer in Nebraska – you wake up one morning to find that your crops are sick, no longer producing the yields they used to, and the water has a tinge to it and smells awful. As a concerned citizen you approach the municipal government about it only to find out that ten years ago the company responsible for maintaining and operating a pipeline a hundred miles away experienced what is considered to be a minor leak of several thousand gallons of heavy crude. The company responsible is gone and there is no way for you to collect damages; remediation in the next year is unlikely since your farm is outside the protected zone. Although funding is available, you would still have to apply for it and that process takes months. Meanwhile, your crops are failing, your income is dropping, and winter is coming.
If this scenario sounds re-fetched, it probably is, but there is no denying the impact of poorly managed oil drilling and transportation operations on the economic, social, and environmental structure of polluted areas. As one of the top commodities of our industrialized world oil has the potential to bring wealth to those who control it or are employed by those who do, yet the devastation wreaked by oil contamination is a stern reminder of the risk in bringing profits to investors and resources to market.
The Keystone pipeline is one such project that has the potential for massive benefits amid horrendous consequences. The pipeline started construction in 2007 and finished in July 2010 amid the Deepwater Horizon disaster in the Gulf of Mexico. Canadian crude is the primary cargo of this pipeline and is carried 2700 kilometers to the Gulf via a series of smaller pipelines that pass through 3 provinces and 8 states. On the way the pipeline networks passes through many areas sensitive to environmental contamination and economies whose health is directly linked to the health of the environment, particularly the availability of fresh water for agricultural and cultural purposes. For the most part the existing network bypasses a region in Nebraska which is situated atop the Ogallala aquifer. This aquifer is one of the largest in North America and is the primary source of groundwater for almost 2 million people. This aquifer is plentiful and aids in the economic productivity in the region, estimated to be somewhere close to $20 billion. Surprisingly, they want to build a pipeline of the worst pollutants imaginable right on top of it.
In early January, President Obama announced that TransCanada Pipeline’s application had been rejected by the US government. Particularly, the extension of the project called Keystone XL was rejected since the previous phases of the project had already been built. He invited TPL to reapply after a 60-day reassessment period, after which it is expected that the new application will address the environmental concerns that blighted the first submission.
As part of the US’s plan to reduce dependency on foreign oil, particularly from the Middle-East, their government has decided to import oil from the Canadian oil sands project in Alberta. This meets some of their foreign policy objectives since relations between Canada and the US are generally good and both parties have a lot to gain from the project. The US can reduce their dependency on oil derived from less politically stable regions of the world and focus on Canadian Oil. With the planned expansion over the next several decades this could mean more jobs in the oil sands. However, some of the benefits proposed would only benefit American consumers, for the most part in terms of short and medium-term job creation. Although Canadian suppliers have much to gain by increased sales over the next two decades, the pipeline extension for the most part is in the United States and therefore will not benefit the Canadian construction industry, not nearly as much a the American industry.
What ever may be the benefits and consequences, a better environmental assessment should take place before building the project. The Keystone project has the potential to benefit Canadian producers and American consumers; it also has the potential for environmental degradation and contamination if not managed and controlled effectively and responsibly. The effect on the lives of people in areas that the pipeline passes through should be taken into account before the pipeline is built.
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