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Remember the controversial Keystone XL oil pipeline, which Barack Obama rejected last month because environmental concerns hadn't been properly addressed? Well, a chunk of it is going to be built regardless - with Obama's approval.
Canadian company TransCanada will build a pipeline running from Cushing, Oklahoma to Houston and Port Arthur in Texas. According to a statement:
...what had been the Cushing to U.S. Gulf Coast portion of the Keystone XL Project has its own independent value to the marketplace and will be constructed as a stand-alone Gulf Coast Project, not part of the Presidential Permit process. The approximate cost is US$2.3 billion and subject to regulatory approvals, we anticipate the Gulf Coast Project to be in service in mid to late 2013.
In the same statement, TransCanada also announced that it would reapply to construct the remainder of the proposed pipeline.
Given the US government's support for the Oklahoma-Texas pipeline, it seems likely that the rest of Keystone XL will eventually be approved.
The Oklahoma-Texas pipeline will not cross the US-Canada border, so it does not need State Department approval. The Edmonton Journal points out that it still needs to be approved by the U.S. Army Corps of Engineers under the Clean Water Act, though.
The Oklahoma-Texas section does not include the most controversial part of Keystone XL, which would pass through Nebraska. Environmentalists have raised concerns about the sensitive Nebraska Sand Hills ecosystem, and the nearby Ogallala aquifer that supplies drinking water to people in eight US states .
The Associated Press quoted White House press secretary Jay Carney as saying that Obama approved of the decision to press ahead:
Moving oil from the Midwest to the world-class, state-of-the-art refineries on the Gulf Coast will modernise our infrastructure, create jobs, and encourage American energy production.
Bloomberg explains that the new pipeline will relieve a glut of oil that has built up in Cushing:
The pipeline will help relieve oversupplies that have accumulated in the US Midwest because of a lack of pipeline capacity to carry the oil to refineries on the coast. Cushing is the delivery point for crude oil traded on the New York Mercantile Exchange. A lack of pipeline capacity between Cushing and the Gulf Coast, where most refineries are located, has caused U.S. oil to trade at a discount to imports.
If it goes ahead, Keystone XL would run alongside the existing Keystone pipeline, which carries oil from Alberta, Canada, to Cushing and also to sites in Illinois, and extend it all the way south to the US Gulf coast. The existing and proposed pipelines are shown in this map on the TransCanada website.
Apart from the risk of leaks, Keystone XL is also controversial because of its impact on the climate. The oil it would carry is derived from tar sands, so extracting and processing it requires a lot of energy. As a result, oil from tar sands produces more greenhouse gas than conventional oil.
Last week the European Union voted on a proposal to label fuel oils according to their carbon footprint, which would have effectively banned the import of oil from tar sands into Europe. However the vote ended in deadlock, so the final decision will not come for several months.