#1 cleantech news, reviews, & analysis site in the world. Subscribe today. The future is now.

Fossil Fuels Keystone XL pipeline TransCanada

Published on January 8th, 2016 | by Tina Casey


Keystone XL Tar Sands Oil Pipeline Not Dead Yet

January 8th, 2016 by  

If you expected TransCanada to slink away in defeat after President Obama denied a permit for its Keystone XL oil pipeline, guess again. The Intertubes have been buzzing with news that the company has filed suit in federal court, seeking to prove that the President over-reached his Constitutional authority. TransCanada has also let out word that $15 billion is the price tag it will seek for damages and cost recovery under NAFTA, the North American Free Trade Agreement. O, Canada!

Keystone XL pipeline TransCanada

Keystone XL And The 2016 Presidential Race

We’re wondering why TransCanada didn’t just wait a few months until the November 2016 US presidential election, since the rise of a Republican president to the White House would all but guarantee a fresh, friendly look at the Keystone XL permit application without all the bother and expense of a lawsuit, but whatevs.

On the other hand, Republican frontrunner Donald Trump’s seat-of-the-pants approach to policymaking clearly adds an element of uncertainty to the mix, so we’re guessing that TransCanada is not so confident that a Republican president would necessarily be all that friendly.

As for the off chance of a Democrat taking the White House again, recall that TransCanada tried to hit the pause button on its Keystone XL permit application last fall, only to get the bum’s rush just a few days later with a formal denial. It’s unlikely that another Democratic president would enable the project to move forward.

The Keystone XL Constitutional Lawsuit And Legal Action

TransCanada has graciously made available the paperwork for its new Keystone XL actions on its blog.

The lawsuit launches off with this:

This case presents the question whether the Constitution grants the President unilateral power, unsupported by any statute and contrary to the expressed wishes of Congress, to prohibit the further development of the Keystone XL Pipeline on the basis that the pipeline would cross a U.S. border and would, if permitted to proceed, undercut the President’s influence in international climate change negotiations.

And, here’s a taste of the NAFTA litigation:

Seven years after Keystone filed its application, the United States denied the permit even though the Administration had concluded on six occasions that the pipeline would not have a significant impact on climate change. Stated simply, the delay and the ultimate decision to deny the permit were politically – driven, directly contrary to the findings of the Administration’s own studies, and not based on the merits of Keystone’s application…


Politically Driven Or Not…

If you have any thoughts about the Constitutional issues involved, drop us a note in the comment thread.

We’re especially interested in the NAFTA litigation because on the surface there doesn’t seem to be much of a case. As underscored by TransCanada, the White House has admitted that the Keystone XL pipeline had become a political hot potato, but that doesn’t necessarily evaporate the case for denial of the permit on other grounds.

Years before President Obama formally denied the permit, he began laying the groundwork for a non-political case against the pipeline. One key step occurred on June 23, 2013, when the President gave a major address on climate change at Georgetown University:

…I do want to be clear:  Allowing the Keystone pipeline to be built requires a finding that doing so would be in our nation’s interest. And our national interest will be served only if this project does not significantly exacerbate the problem of carbon pollution…The net effects of the pipeline’s impact on our climate will be absolutely critical to determining whether this project is allowed to go forward. It’s relevant.

That “national interest” language pops up in a 1968 Executive Order that established Presidential authority over cross-border facilities such as the Keystone XL pipeline, which would convey tar sands oil from Canada down through the U.S. midsection.

Now fast forward to November 6, 2015, when the President made his official statement on the permit denial. After carefully noting the politicization of the project, he just as carefully noted the non-political reasons for denying the project, namely, that it would not make a “meaningful, long term contribution” to the U.S. economy in terms of job creation, it would not result in lower gas prices for consumers, and it would not enhance the energy security of the U.S., defined as reducing dependency on imported oil from “unstable parts of the world.”

On top of these specifics, the President also made the case that the U.S. has a strong economic interest in leading the globe on climate action, in terms of producing, using, and exporting clean energy technology, and that this potential would be undercut by the pipeline. Note that he again makes the case for macro-scale national interests, not to particular instances of opposition (of which there has been much) from local residents, property owners, and other stakeholders:

…Because ultimately, if we’re going to prevent large parts of this Earth from becoming not only inhospitable but uninhabitable in our lifetimes, we’re going to have to keep some fossil fuels in the ground rather than burn them and release more dangerous pollution into the sky.

So there’s that.

While we await the President’s response to TransCanada’s actions, we’re also keeping an ear open for word from the patriots who have risked all to take a stand for property rights at the Malheur National Wildlife Refuge in a remote region of eastern Oregon. If TransCanada ultimately succeeds, there will be plenty of ranchers, farmers, and other stakeholders in need of a few good men to defend their property rights in other states.

We’re particularly thinking of Oklahoma, which is already under siege by the oil and gas industry in the form of swarms of earthquakes related to fracking waste disposal.

Pack up your Go-Gurt and let’s ride!

Follow me on Twitter and Google+.

Image (screenshot): via state.gov.

Tags: , ,

About the Author

specializes in military and corporate sustainability, advanced technology, emerging materials, biofuels, and water and wastewater issues. Tina’s articles are reposted frequently on Reuters, Scientific American, and many other sites. Views expressed are her own. Follow her on Twitter @TinaMCasey and Google+.

  • eveee

    The last yelps of protest from a failed corporation plan have little effect.

    None of that has anywhere near as much effect as the recent budget bill that allows oil export. Lets face it. The game plan all along was to export the oil. The oil company and Republicans pushed the “drill baby drill” button and claimed it would add jobs, lower domestic prices, and increase security. It doesn’t do any of that. We still import oil, it will raise prices, it doesn’t add many jobs, and it doesn’t do that much to improve security.

    So one side is betting low oil prices will keep synthetic oil from Athabasca off the market and the other is busy trying to export it from the US Gulf because Canada blocked it in BC.

    The argument over trains vs pipelines doesn’t matter. Its already being shipped on other pipelines.

    While the current glut of shale oil and tar sands syncrude did break the OPEC oil monopoly, it didn’t lower oil prices until the Saudi king died and the survivors decided they had enough of declining market share. So now they are gaining it back by borrowing to pay their national debt. While some note the price to produce, thats not the price oil producing countries need. They need to pay national debt with that oil money, so the necessary price is higher.

    The current price of crude is more important than any of this. And why is it this low? Because the demand is not nearly as high as supply. Demand is more important.

    I don’t know why, but somehow the oil companies managed to convince everyone including themselves that they were the only game in town so they could sell all the oil they wanted into infinite demand at any price.

    Not so. And yet still, few get the message. Once the message reaches ears that oil is no longer a going concern, the doors will be blocked with messengers running to pull investments out. Divestment won’t just be a fashionable green statement, it will become a desperate sprint for economic survival.

  • djr417

    ‘off chance of a Democrat taking the White House again’….really? and then this gem ‘patriots who have risked all to take a stand for property rights ‘ ugh. how did i end up on a breitbart site?

  • Jim Smith

    Sorry Obama, denying the pipeline will result in more carbon pollution as it now has to go by rail. Guess who makes money from that? Democrat 1%er Warren Buffet.

  • rockyredneck

    To promote bias, left wing reporters love to refer to Canadian oil sands production as tar. Misleading terms used by the media is, at the least, unethical.
    Oil derived from Canadian oil sands deposits is derived from bitumen, a naturally occurring substance.

    a dark, thick, flammable liquid distilled from wood or coal, consisting of a mixture of hydrocarbons, resins, alcohols, and other compounds. It is used in roadmaking and for coating and preserving timber.”

    a black viscous mixture of hydrocarbons obtained naturally or as a residue from petroleum distillation. It is used for road surfacing and roofing.”

    • eveee

      Those pesky late 19th century left wing reporters.

      “The name tar sands was applied to bituminous sands in the late 19th and early 20th century.[citation needed] People who saw the bituminous sands during this period were familiar with the large amounts of tar residue produced in urban areas as a by-product of the manufacture of coal gas for urban heating and lighting.[14] The word “tar” to describe these natural bitumen deposits is really a misnomer, since, chemically speaking, tar is a human-made substance produced by the destructive distillation of organic material, usually coal.[15]”


      Rant noted.

      • rockyredneck

        Heh, heh, you must have done a bit of research to come up with that. At least you read the article, while most people just comment without any knowledge of the subject. The media has never been too concerned with accuracy but it seems to have become worse with the advent of the internet.

        From the same article “Crude bitumen is a thick, sticky form of crude oil”. Not a “toxic sludge” (any more than other oil).

        • eveee

          I prefer to research first to avoid embarrassment. Its also educational.

        • Frank

          IIRC they don’t recommend inducing vomiting if someone swallows gasoline, because it burns the esophagus again on the way up. Not sure exactly what bitumen would do, but I sure wouldn’t ingest it.

          • rockyredneck

            I don’t think it would be wise to drink most of the stuff under your sink either.

  • Larry

    The Koch Bros. don’t own the entire planet yet, but they sure would like to. Must be hard for them to take right now with international crude oil prices at or below what it costs them to extract that toxic sludge. Must be a tinge of sour grapes in this action somewhere

  • Shane 2

    I don’t think that Trump is the most likely nominee. Cruz and Rubio probably have a better chance once the weaker candidates drop out of the race.

  • just_jim

    ” patriots who have risked all to take a stand for property rights at theMalheur National Wildlife Refuge in a remote region of eastern Oregon.”

    Please Tina! A more accurate description would be ‘entitled publicity seeking yahoos’

    • Matt

      WTF, those are rangers paying 1/10 the going public rate for grazing and crying because they want it free.

      • just_jim

        Yep, more accurate would be ‘entitled publicity seeking welfare queen yahoos’

        My bad

  • neroden

    TransCanada has no case whatsoever. They’re hoping to find a friendly kangaroo court int he NAFTA “arbitration” panels.

    The TPP is supposed to add more of these kangaroo courts. It should be killed with fire.

  • sjc_1

    KXL was the first item on the Senate agenda last year, as if the were no more important items to consider. The oil companies and the NRA own the GOP.

    • Matt

      Please while coal may have lost controlling interest, they still have hold of the GOP short hairs.

    • Jim Smith

      The oil interests own both parties

  • Johnny Speid

    The pipeline won’t increase energy security because the US will continue to get the oil either way. It will just continue to be by diesel powered trains instead of electric pumps on pipelines.

    • Kraylin

      I was going to say something very similar. Property rights, eco sensitive lands, and things of this nature are very important and it is my (very limited) understanding that the path the pipeline would take has been changed many many times over the years to take the above items into considersation.

      To deny the pipeline on an emissions/climate standpoint makes no sense at all. The US will continue to use huge amounts of Canadian Oil for the foreseeable future, 20+ years at least. If we prefer that oil be transported by train… well so be it, but that is hardly a good or safe method…

      • Steve Grinwis

        Oil taking the train has a worse safety record both per unit oil moved, and in absolute terms as well…

        • Shane 2

          If we can get to cheap EVs, the oil price will be too low to allow tar sands oil to compete with conventional oil. How do ya like them apples Alberta? Dirty Canucks gonna have to learn to live on their wits, not their tar.

          • Kraylin

            Assuming you live in the US and drive a gasoline powered vehicle, perhaps you should do your part by no longer driving as it is very likely the very oil you are insulting is in your vehicle.

            Classy post either way….

          • Shane 2

            I apologize to Canucks and tar-harvesters.

          • Kraylin

            Thank you. I live in Canada, hence why I took the time to point out I didn’t like your comment.

            The US is a very big country, I suspect many people have many different opinions on how good or bad it is living in the US depending on how and where they live.

            I like visiting the US, does that count? 🙂

          • eveee

            Alberta oil sands are already too expensive for new development. Even many relatively conventional sources can’t make money at these prices.

          • rockyredneck

            It depends on where you draw the line between conventional and other sources. A straight down, relatively shallow well in easily drilled formations does not cost much. If it encounters a high producer of sweet light crude that produces for a long period, the well will make a lot of money. That is, if the jurisdiction where it is located does not take most of it in taxes and royalties. These types of well are very difficult to find anymore.
            Most Canadian oil sands production is near the break even point (plus or minus) at recent prices. There is little return on investment. Investing in new production would be foolish without some assurance of future price increases.
            Tight oil, and deep sea oil is often even more expensive to drill and produce.
            Most of the cost of unconventional production is upfront, and continuing to produce will still accomplish a positive cash flow. That is part of the reason production is slow to decline.
            Depletion will eventually reduce production and/or an increase in demand could quickly raise prices.

          • eveee

            Yes. Most existing producers would rather sell and pay back their loans than sit on the investment. That makes it hard for oil storage to be drawn down.

            Its taken oil production more than a year to peak despite the low oil prices.


            New investment is not going to happen with oil storage tanks full and Saudis pumping all they can. There is a cost curve of producers vs price like half of a bell curve. Most of the curve is above todays oil prices, but the bottom tail of the curve still fits at or below the price.



            The conventional oil won’t deplete very fast, but I hear the shale will deplete faster. A lot of it depends on demand, not just supply.

          • Steve Grinwis

            Even if the ultimate $25k long range EV were available today, and everyone immediately stopped buying gasoline cars and SUVs, and started buying exclusively EVs, it would take 13 years for EV’s to reach 50% saturation of those markets, 13 years being the average lifespan of a new car.

            And oil will still be needed for trains, airplanes, transport trucks and freighters, until we can figure out a way to electrify those as well.

            My point being two fold: We need to start the process as soon as possible, and we’re going to need oil for a while during the transition, even if it began both immediately, and violently.

            I’d rather see oil transported safely in pipelines, than have massive spills that cause damage for decades.

            I don’t think the pipeline will ultimately impact the overall use of oil in the mean time. One way or another, that F150 is going to get some oil in it. Set up the pipeline, charge an extra $2 / barrel, and funnel all that money into EV subsidies, and charging infrastructure. That should be what.. $1 million a day ~ish? That buys a lot of EV chargers, and $10k subsidies on Model 3s.

      • Mike

        I prefer the rail solution because that infrastructure has already been bought and paid for (more or less). Any new pipeline and investors will (rightly) demand ROI. And the only way they get their ROI is to have the new asset viable for the next four decades. Or, if the pipe is built and then the commodity becomes valueless and stops being shipped, the pipeline investors claim a capital loss and I end up, yet again, financially supporting them via a tax code set up for fossil fuel enterprises.

        • rockyredneck

          There are several major differences. Pipelines largely disappear from view once they are built. Little noise, no diesel smoke, no collisions, no waiting at crossings, and cows and wildlife graze peacefully and safely over them. The land used mostly goes back to its previous use.

          You should consider these and other external costs.

          • Mike

            Cheers. I consider all externalized costs when contemplating these options.

            The best pipeline: a HVDC interconnect pushing renewable energy to my plug in EV.

          • rockyredneck

            Can’t argue with that, but prices will have to come down, infrastructure improved, and other problems resolved before that is an option for most of us.

          • Mike

            100% agree on the price sensitivity issues. Here in Canada, the IMF stipulates I (and 36 million other Canadians) provide an after tax subsidy of (+/-) $1280.00 to the FF industry.
            If all costs involved with FF use are captured and paid up front, the price gap would disappear.
            Lazard 9.0 dated Nov 2015 now captures “unsubsidized Levelized Cost of Energy”, with the only subsidies still being externalized costs with the employment of FF for energy production. Wind and utility solar beat coal, NG and nuclear for energy production.
            In the end, the market will make the choice.
            IMHO, the product from Northern Alberta will never be financial viable to carry out the planed expansion the industry claims will still happen. I guess in five years, we’ll see. Cheers.

          • rockyredneck

            I am from Alberta, but considered past expansion too frenetic. I actually welcome the slowdown. Being retired on a fixed income, I am considerably better off with low gasoline, natural gas and electricity prices, and you can actually find someone to fix your roof now. Low interest rates means I can pay off debt rapidly.
            However I don’t think the fossil fuel industry is dead yet, but coal might suffer.
            We may know in less than 5 years how prices and costs shake out.

          • rockyredneck

            I am pretty bored with the argument about subsidies. It ignores the contribution to the economy by the petroleum industry. It is pretty obvious what happens to Canada’s economy (and that of other producing nations) when the price of oil goes down.
            Oil was at an unsustainable high price and contributed to recession in consuming countries. Now it is too low. Hopefully it will stabilize at a price someplace in the middle.

          • Mike

            I’m between polyurethane coats on a project……
            I’m also retired on a fixed income. As for low rates, as someone with no debt, the low rates are a hindrance with respect to savings growth.
            15 years ago we designed our home with the fuel shocks of the 70s in mind. 8 inch foam walls, r60 with foam in the ceiling, insulation under the basement pad, radiant heat, solar water heater, etc. Modest sized, our NG heating costs are very manageable, even last winter when the commodity price spiked.
            I drive an 8 year old Prius, so if gas were 90 cents or 1.80, it would only be a $50 a month delta. I’ve been saving for an EV for the past 2 years and will be saving another 4 years before I pull the hammer.
            I guess what I’m getting at is my habits don’t depend on inexpensive money or fuel.
            I understand your frustration with the subsidies argument. I’m also frustrated by it, but from the other side of the coin. I would prefer the whole tax code be redone so that no energy source can benefit from any tax related accelerators. CCA write offs should be the same across the board and let the best idea win so to speak.
            I agree the petroleum industry contributes to our GDP as does the renewable industry. Hopefully a balance can be reached in the future.
            One opinion on electricity prices and where they will go in Alberta. Here in Ontario, renewables are taking the political hit for what is and has always been a (systemic and) expensive nuclear fleet. Any jurisdiction where nuclear is a large %, there are overwhelming examples of affected ratepayers being skinned.
            In realty, even with “expensive” first generation wind PPAs, in 2014 total wind production was 7.8 TWh at an all in price of 12 cents per KWh. Total NG production was 14.9 THh at an all in price of 15.3 cents per KWH (page 212 figure 5 of 2015 Annual Report of the Office of the Auditor General of Ontario).
            Push for wind in Alberta. It is now cheaper than NG on a LCOE basis and will only get cheaper with each turbine being erected and commissioned.
            My bet, the Alberta coal plants will close before their PPA agreements end in 2029 because, like in India, the owners will find a better ROI by keeping those PPAs, but using wind to fulfill them. Cheers.

          • rockyredneck

            Yes, coal will end, but in Alberta, many power plants may be converted to natural gas rather than shutting down. We already have significant wind generation with companies actively seeking sites for more. We have never had any nuclear. Our electricity prices are significantly lower than Ontario, but not the lowest, as we lack potential for hydro.
            Sounds like we live similarly. Small, super insulated house ( that I designed and built myself), older small car (2007 Aveo). I also use underfloor radiant heat with a high efficiency unit to supply hot water and heat. I do own a second house (rented) that I owe on, so low interest helps.

          • Mike

            Cheers. You are lucky you were able to directly build your own home. A developer owned the serviced, treed lot and we had to build thru him. We designed our home over a 16 month period using a crude Autocad type program. I had 17 pages of technical specifications and it took the developer 8 months before a contract would be signed. The aim was 1000 square feet main floor with one bedroom (plus 840 square foot garage ☺ insulated and radiant heated to same standard as house). Final product came in at 1150 square feet because of the stairs to basement. I drove the developer crazy with what I wanted. Steel studs (no wood used in frame), steel roof, hipped trusses, icynen foam, etc. All the builder wanted to do was try and sell me on non essential things like a larger footprint, granite countertops and jacuzzi tubs…….

          • rockyredneck

            Yes, I found a 100′ x 120′ lot in a small town that had an existing garage with electricity. We moved our motorhome on site while building a 1008 sq. ft. house on a crawl space with two baths and two bedrooms. I was able to build without using any help other than volunteer family and friends and without using any contractors. A good way to go if you have the skills.
            By using sales, used materials and appliances, milling my own trim, etc. I was able to keep my total cost under 100 grand, including land.

          • Mike


          • eveee

            If you take away the costs of oil, health, military, etc, the cost is way high. The oil companies are busy muffling that information, just like they spent millions spreading disinformation on global warming despite the fact they knew the truth.

          • rockyredneck

            They are sometimes hung for sins they didn’t commit. The truth, well there is a lot of variations of that floating around. We probably won’t live long enough to find out what the real truth is.

          • eveee

            Truth? We will live long enough to find this out:

            “one company, Exxon, made a strategic decision in the late 1980s to publicly emphasize doubt and uncertainty regarding climate change science even as its internal research embraced the growing scientific consensus.”


          • rockyredneck

            Are you certain this is not an example of “”social
            media “truthiness”: something that according to certain
            interested parties must be true – and therefore is true – with no need to check the facts.””
            BTW-your link would not open for me.

          • eveee

            My bad.


            Fact checked. Its an LA Times Story.
            Documents obtained from Exxon. They knew. They fudged.


          • eveee

            Prices lower than 3c/kwhr? You are a tough sell. Wind energy is really cheap. Solar is getting there. PPAs are going for 6c/kwrh. That can and will drop. Transmission is not that expensive over the life of the investment. But investment dollars are needed to get this going.
            I don’t get what you are saying about “an option for most of us”. Most of us get electricity from the grid.
            Texas has 10% wind. Iowa and South Dakota about 30%.
            California has about 20% renewables.
            Its not cost or economics thats holding anything up.

          • rockyredneck

            I was referring to electric cars being too expensive. Where do you get 3c/kwh? Is that retail or wholesale? That may have subsidies hidden somewhere or no allowance for capital cost, although hydro may be that cheap in some areas. Our retail cost right now in Alberta is a little over 5c before grid costs.

          • eveee

            DOE analysis. You also get values from PPAs. It includes the PTC which is for 10 years.


            “A just-released Department of Energy and Lawrence Berkeley National Laboratory report pegs utility-scale wind power-purchase agreement pricing as averaging $25 per megawatt-hour for projects that negotiated contracts in 2013. That’s cheap power.”


          • rockyredneck

            It does seem to make sense that a source of power that does not require fuel should be cheaper over the long term, (hydro is a good example) providing that capital costs and maintenance are not too high. One requirement seems to be that installations should be sited near a grid with sufficient capacity. Availability of sites that are not subject to resistance from local residents may be a limiting factor.
            There still seems to be a lot of disagreement as to actual costs.

          • eveee

            Thats right. Once the capital costs of an energy source with no fuel cost fall enough, it become profitable. Wind is highly profitable.

      • JamesWimberley

        It was a largely symbolic fight, but symbols matter. One of Obama’s stated reasons for denying the permit was that it would weaken the US position in international climate negotiations, the success of which was a major national interest. The Sierra Club’s state-level campaign against coal power stations has been far more important in reducing emissions, but lacks the glamour of the Keystone win.

        • John Ihle

          no doubt and maybe underappreciated.

    • Jim Smith

      Yep. and Democrat 1%er Warren Buffet will get richer

  • JamesWimberley

    The constitutional lawsuit is nuisance litigation, it will quickly get thrown out. The NAFTA case should get further, as the arbitrators are business-friendly commercial lawyers. The indirect effect will be to harden already strong Democratic opposition to the Atlantic and Pacific “free trade” pacts – a misnomer because they are mainly about extending IP rights and protecting corporate profits from national regulations (see Paul Krugman, who made his name as an international trade economist).

  • Harry Johnson

    Toxic tube sludge has no future.

Back to Top ↑