No Keystone XL Means More Oil By Rail, Report Says

Without the Keystone XL Pipeline, as many as 14 additional trains carrying crude oil could come through North Dakota and Minnesota every day, according to a report released Friday on the pipeline.

The U.S. State Department issued its final Environmental Impact Statement on the Keystone XL, which would connect oil sands production in Alberta to refineries on the Gulf Coast.

North Dakota’s congressional delegation said the report shows no need to further delay the controversial pipeline. President Barack Obama has been criticized for not granting federal approval, which is required because the pipeline would cross the U.S.-Canadian border.

Environmental concerns have held up the permitting process. But the analysis released Friday shows that greenhouse gas emissions would be higher with rail transportation than Keystone XL. It also says the rail alternatives pose a greater likelihood of spills and more potential for injuries and fatalities than the pipeline option.

The report says the proposed pipeline is not likely to affect the pace of development of the Canadian oil sands, and without the Keystone XL, that oil would instead travel by rail to the Gulf Coast.

Under alternatives outlined in the report, up to 12 unit trains – each with about 100 cars – of oil would leave Saskatchewan each day and two additional unit trains would leave Epping, N.D., carrying Bakken crude per day.

One scenario has all 14 trains potentially traveling through North Dakota and Minnesota each day, heading south to refineries on the Gulf Coast. Another scenario has some trains traveling through North Dakota and some through Minnesota before connecting with pipelines in Oklahoma.

“The alternatives make no sense,” said Sen. John Hoeven, R-N.D. “(An additional) 1,400 rail cars per day going through our state because the president wouldn’t approve a pipeline? From a common-sense standpoint, that also puts some real pressure on him to make the right decision.”

A third scenario if Keystone XL is not built is for the Canadian oil to move by rail west to British Columbia, where it is loaded onto ocean-going tankers and shipped to the Gulf Coast via the Panama Canal. The rail alternatives would require an additional rail-loading facility to be built in Epping, the report says.

The 11-volume report does not make a recommendation on whether to approve the application by TransCanada Corp., a process that began more than five years ago.

Sen. Heidi Heitkamp, D-N.D., and Rep. Kevin Cramer, R-N.D., joined Hoeven Friday in urging Obama to immediately approve the project, which does not pass through North Dakota, but would go through Montana and South Dakota on the way to Texas.

Heitkamp said the report affirmed what officials thought it would say, that permitting the Keystone XL would not have a significant environmental impact. Cramer said it should be “abundantly clear” that pipelines are the safest and most efficient way to move oil to market.

North Dakota already has 10 to 12 trains leaving the state per day carrying Bakken crude, the North Dakota Pipeline Authority estimates, and that is expected to increase as the state approaches producing 1 million barrels of oil per day.

Keystone XL has the capacity to transport up to 100,000 barrels of Bakken crude from an oil terminal near Baker, Mont. The project has firm commitments for up to 65,000 barrels per day currently, the report says.

Ron Ness, president of the North Dakota Petroleum Council, said the pipeline would take 500 trucks off the state’s roads daily and provide another way to get Bakken crude to market, which could increase its value.

Wayde Schafer, executive director of the Bismarck-based Dacotah Chapter of the Sierra Club, said members don’t think Canadian oil sands oil should be transported at all.

“The tar sands oil emits two to three times the global warming pollution of conventional oil,” Schafer said. “The relevant question is this: should we be using tar sands oil as an energy source?”

The State Department estimates Keystone XL would support 42,100 jobs during construction and about 50 jobs during operation of the pipeline.

Jess Keesis, mayor of Winner, S.D., which is along the Keystone XL proposed route, said most landowners in the area support the pipeline.

“We’re ready for it,” Keesis said.

John Meyer, a small business owner in Winner who testified in Washington in favor of the Keystone XL, estimates the county will see a 37 percent increase in tax revenue.

“The economic impact for our area, for our schools and our counties, it’s phenomenal,” Meyer said.

The next step for the Keystone XL is a 90-day comment period on the report released Friday. Hoeven said he plans to work through Congress to either approve the project or set a deadline for the administration. Heitkamp said she’s concerned about making sure a decision is made this construction season.

But Schafer said he doesn’t think the North Dakota delegation is looking at the big picture.

“Very little Bakken crude would even be transported along the Keystone XL,” Schafer said. “It seems to me that we should just build a pipeline for the Bakken oil because the tar sand oil is a much more dirty oil.”


Reporters Bryan Horwath and Cali Owings contributed to this report.