Oil Flowing Through Keystone’s Texas Pipes
Trump reverses Obama’s order on Keystone’s pipeline into Canada, and that could have an impact on supplies for Texas refineries.
This week, President Donald Trump signed executive orders reviving the construction of the Dakota Access and Keystone XL pipelines, projects that had been blocked by President Obama, but the orders likely have a greater impact on long-term supplies for Texas refineries than any short-term gain. That’s because the Texas portion of the Keystone project has been operational since last August, bringing light crude in from midwestern U.S. production sites.
After several years of confrontations with East Texas landowners, the pipeline’s owner, TransCanada, completed a 487-mile pipeline from Cushing, Oklahoma, to Nederland, Texas, between Beaumont and Port Arthur. The $2.3 billion pipeline project included a storage facility in Oklahoma that could hold 2.25 million barrels of crude in Oklahoma. The company’s initial projection was for the pipeline to ship 520,000 barrels per day to Gulf Coast refineries, with the potential to carry up to 830,000 barrels a day through the 36-inch pipeline.
A Houston lateral pipeline was completed and began operation last August at a cost of $400 million and a capacity of 700,000 barrels a day.
The Keystone XL pipeline had been supported by business interests and Republicans who believed it would create secure energy sources on the North American continent, while environmentalists and Democrats believed the pipeline would promote the exploitation of oil sands in Canada, environmental hazards of a ruptured pipeline, and would encourage the continued consumption of fossil fuels for energy. But the fight was almost symbolic on both sides.
Studies showed that the pipeline would not have a momentous effect on jobs or the environment, but both sides made it into a symbolic test case. The State Department estimated that Keystone would support 42,000 temporary jobs for two years — about 3,900 of them in construction and the rest through indirect support, like food service — but only 35 permanent jobs. Similarly, the government concluded that Keystone’s carbon emissions would equal less than 1 percent of the total greenhouse gas emissions in the United States.
Bill McCoy, president of the Port Arthur Chamber of Commerce, said the pipeline is safe and necessary to maintain a supply of crude oil to the area refineries. He said there are 20,000 jobs locally that are directly or indirectly dependent on the refineries.