Canadian energy giant, TransCanada announced today that they are moving forward with their Energy East Pipeline project, which will bring crude oil from Western Canada to refineries and export terminals in Eastern Canada.
This announcement comes days after President Obama knocked down talking points about the number of jobs TransCanada's proposed Keystone XL pipeline would create and raises questions about whether this makes KXL more or less likely to be rejected.
Shawn McCarthy and Jane Taber of The Globe and Mail report:
TransCanada Corp. is proceeding with a $12-billion plan to ship 1.1-million barrels of western crude per day to eastern Canada and will join with Irving Oil Ltd. to build a new deep-water export terminal off Saint John, N.B., the company said Thursday.
After receiving commitments from shippers, TransCanada has increased the capacity of the project by 30 per cent from previous levels, an indication that western producers are keen to diversify their markets beyond the U.S. and are uncertain about prospects for a route through British Columbia to the west coast.
Supporters of Keystone XL have claimed that were it to be rejected, TransCanada would simply find another path to export the oil or ship it by rail. In both cases, opponents have countered that these are not reasons to allow KXL to be constructed, since the climate impact, ecological destruction and risk of pipeline spills are still a concern.
As to what today's announcement means for the future of Keystone XL, I think there are a couple ways to read this.
For TransCanada, an eastern pipeline will give them another way to continue extracting the oil sands even if Keystone XL is rejected.
For President Obama, this eastern pipeline could be used as another reason to reject KXL, because one could argue it is no longer needed and that it would unnecessarily put American's at risk.
On the other hand, KXL supporters could argue that by delaying the pipeline, Obama forced TransCanada to develop this eastern pipeline and Americans have lost out on jobs as a result.
If Obama does end up rejecting the Keystone XL proposal, what will matter most is how that decision is framed and explained to the public. Why? Because as the Financial Times reported in June, while Obama is pondering the fate of the Keystone XL pipeline, there are 37 other major pipelines being built across the US.
Obama has made it clear he does not see the pipeline project as a jobs plan and he has said he would only approve it if it "does not significantly exacerbate the problem of carbon pollution." Keystone XL has real world implications for the future of climate change, but it is also a symbol for our addiction to oil. If KXL is to be rejected and these other pipeline projects are allowed to be constructed, it will be important for Obama to explain the bigger picture of the simple, but terrifying math of global warming and how tar sands have the potential to push global warming to a point of no return.