Keystone XL Pipeline

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DEFINITION of 'Keystone XL Pipeline'

A proposed extension of the Keystone pipeline system that is to transport oil from Alberta, Canada to refineries in the United States. As of 2014, the Keystone XL pipeline is to be developed by TransCanada Corporation, which has constructed several other pipelines between Canada and the United States since 2011.

INVESTOPEDIA EXPLAINS 'Keystone XL Pipeline'

Canada has large reserves of oil locked in oil sands. This oil is considered heavy oil, which requires a different refining process than other types of oil. The production of heavy oil releases particulate matter, such as soot, as well as chemicals such as sulfides, hydrogen cyanide, and sulfur.

The Keystone system transports diluted bitumen and synthetic crude oil from Alberta through Montana, South Dakota, Nebraska, Kansas, and Oklahoma, to refineries located in Texas, Illinois, and Oklahoma. Keystone XL would run from the Hardisty Terminal in Alberta to Steele City, Nebraska, and would pass through Montana, South Dakota, and Nebraska. Because the Keystone XL pipeline would provide a more direct route to refineries found in the United States, it will make the first phase of the Keystone less useful.

The first phase of the Keystone Pipeline, completed in 2011, is approximately 2100 miles long, while the proposed Keystone XL expansion is estimated to be over 1100 miles long. Keystone XL is estimated to carry over 800,000 barrels of oil a day, bringing the capacity of the Keystone system to 1.1 million barrels per day.

The proposed Keystone XL pipeline has been criticized by environmental groups, politicians, and residents of states that the pipeline is to pass through. These groups have raised concerns of the proposed route’s proximity to the Sandhill region of Nebraska, as well as the Ogallala aquifer, which provides a significant portion of the water used to water crops in the United States. The bitumen carried by the pipeline to the United States will likely result in higher greenhouse gas emissions, as Canada has experienced since first developing its oil sands.

Proponents of the pipeline say that it will increase the supply of oil to the United States, and that oil coming from a friendly neighboring country increases security.

 

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