What Is the Keystone XL Pipeline?

The Keystone XL pipeline will transport oil from Alberta, Canada, to refineries in the United States. As of 2019, the phase IV (the final phase) of the Keystone XL pipeline will be developed by TC Energy (formerly TransCanada Corporation), which has constructed several other pipelines between Canada and the United States since 2010.

Key Takeaways

  • The Keystone Pipeline was proposed by TC Energy (formerly TransCanadian Corp.) in 2005 to transport new finds of hard-to-extract heavy oil from oil sands in Canada to U.S. refiners.
  • The pipeline system is 2,687 miles (4,324 km) long and handles 23 million gallons of oil per day.
  • Keystone has been controversial for many years due to concerns about its local and global environmental impacts.

Understanding the Keystone XL Pipeline

The Keystone Pipeline was proposed by TransCanada Corp. on Feb. 9, 2005 in a press release, which said, "TransCanada is in the business of connecting energy supplies to markets and we view this opportunity as another way of providing a valuable service to our customers. Converting one of our natural gas pipeline assets for oil transportation is an innovative, cost-competitive way to meet the need for pipeline expansions to accommodate anticipated growth in Canadian crude oil production during the next decade."

The first phase of the pipeline goes from Hardisty, Alberta, to the junction at Steele City, Nebraska, and on to the Wood River Refinery in Roxana, Illinois, and the Patoka Oil Terminal Hub north of Patoka, Illinois. Section two runs from Steele City, Nebraska, south through Kansas to the oil hub and tank farm in Cushing, Oklahoma, then further south to Nederland, Texas, to serve refineries in the Port Arthur, Texas, area. The third phase is the Houston Lateral pipeline, which will transport crude oil from the pipeline in Liberty County, Texas, to refineries and terminals in the Houston area. The final stretch of phase three went online in 2017.

In Nov. 2015, President Barack Obama announced his administration would not grant permits for the construction of this pipeline in order to further their commitment to fight climate change. In his first week at the Oval Office, President Trump signed an executive order clearing the way for the pipeline project. The Republican party believes that the construction of this pipeline will create more jobs and provide a boost to the economy.

How the Keystone Pipeline Works

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. Canada has large reserves of oil locked in oil sands. This oil is considered heavy oil, which requires a different refining process from 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 finished Keystone XL pipeline is estimated to be able 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 Keystone pipeline has been criticized by environmental groups, politicians, and residents of states through which the pipeline passes. These groups have raised concerns about the proposed route's proximity to the Sandhill region of Nebraska and the Ogallala aquifer, the latter of 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.

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.