The Keystone Pipeline Project between the United States and Canada - Case Study Example

Topic: Oil is vital to the whole economy as well as the whole world. The world consumption of oil is around 85.64 million barrels costing $4.3 billion everyday. With the increase in its consumption by countries like India and China, the world consumption of oil is expected to rise in the future. The world dependence on oil is proving to be very damaging for the country and the environment as well. The production, distribution as well the use of oil destructing our environmental which will be very harmful especially for the future generations. The Keystone Pipeline is a pipeline system operated by a Canada company TransCanada. The Keystone project was to transport synthetic crude oil from the oil sands region in northeastern Alberta, Canada to multiple destinations in the United States. Since 2010 when the Keystone Pipeline Project first comes out, it has received lawsuits and criticism from oil refineries, environmentalist, and some members of the United States Congress. Although the application of TransCanada building the Keystone Pipeline from Canada to the U.S. has been rejected by the U.S. government, TransCanada stated that they will resend the application to get the permit. After being rejected, the Canadian prime minister, Stephen Harper said, ““I don’t object to foreigners expressing their opinion but I don’t want them to be able to hijack the process so that we don’t make a decision that’s timely or in the interests of Canadians.” This has become a major controversy in the US. With concerns of possible economic benefits and potential environmental effects, what will be a better decision to make by the U.S. government under the pressure from TransCanada, Giant oils, and the residents of states where the pipeline goes through? There has always been a peaceful trading relationship between the United States and Canada who also share the longest border in the world. However, the keystone pipeline project received multiple responses from the politicians and other stakeholders of the United States as well as Canada. The proposal of expanding the keystone pipeline from the Alberta Tar Sands to the Gulf of Mexico also received pressure and disapproval from the tribal nations of these countries. This is because environmentalists have predicted that this project would have serious damaging environmental effects for both these nations and the world as a whole. This project is expected to reduce the reliance of the United States on energy resources from those regions that are unstable and will also boost the domestic energy and energy security of the country. The proposal of sending approximately 80,000 barrels of oil per day to the refineries in United States would only have been achieved through increased production of oil in the Alberta Tar Sands. This increase in production will further result in an increase of carbon dioxide emissions from 28 metric tones in 2004 to 95 metric tones within fifteen year that is by 2020. There will be an increase in the emission of the green house gases which can prove to be very damaging for the society as well as the world. The supporters of this project argue that the United States government has conducted an environmental review for the safety of our environment which indicates that this project would be put into action with appropriate measures for the protection of the environment. It also indicates that the project would offer an practical and safe way of bringing oil from Canada to the refineries of the United States. But the world is already suffering from global warming which has resulted in a depletion of the ozone layer. Therefore, environmentalists believe that no more risks should be taken which would result in long term effects for the entire world. Along with the Environmental Impact of Climatic Change and Greenhouse Gas Emissions from increased oil Production, this proposed project has other environmental effects as well. This project would pass through Nebraska Sand hills section of the Ogallala Aquifer which provides water for drinking to approximately two million people all over Canada. This figure is expected to rise as it was estimated by the USGS for the period 1998 till 2006. The agency for environmental protection has deemed this project to unsafe for the environment in contrast with the beliefs of the State department. The environmental agency believes that this project could result in several potential impacts for the environment due to pipeline leaks of oil during the installation process of the Keystone project as well as during the operation of this process. This would certainly infiltrate the water and affect the health of the million of consumers of this water. One strategy to overcome this problem is to design strategies which guarantee smooth running of this entire process of the Keystone project. The Keystone pipeline project will also give a number of benefits to the economies of the United States as well as Canada. In terms of the economic benefits, this project will give a large number of employment opportunities to the citizens of these countries. Over the entire life of this project, it would create approximately 20,000 construction jobs. By 2035, the approval of this project would result in additional 50,000 jobs in the United States and Canada (Keystone XL Pipeline, Web). A number of studies have been done on this project to find the potential benefits and costs for both the countries. A study was done by TransCanada Corporation which estimated that approximately 119,000 jobs would be created if this project was approved. These estimations were criticized as it ignored the temporary nature of the jobs to be created. This study also failed to take into account the environmental which would result with the implementation of this project. Another study by the Energy Policy Research Foundation, Inc., (EPRINC) estimated the potential benefits of this project to be between $100 and $600 million on an annual basis for the United States. A study should be conducted which should take into account both the potential benefits and costs of the proposed Keyline project. This would help in reasonable analysis of this project for both the United States as well as Canada. The approval of this pipeline would increase the imports of US to 4 million barrels a day by 2020 (Keystone XL Pipeline, Web). If this project is disapproved then the United States would have to face a large number of consequences. It would have to depend on crude oil which would have to be bought from the Middle East and Africa. The production of oil in Canada is expected to grow approximately by 1.6 million barrels per day by 2025. The supporters of the keystone pipeline project emphasize its potential benefits for US energy security as well as its economy. The benefits of this proposed project include the creation of jobs, other economic benefits, profits earned by the refiners as well as a decrease in dependence of the US from other countries. There has been continuous debate over the issue of whether to accept or reject the offer. This debate has divided the stakeholders and other citizens into two groups, one who supports this project and the other one is pressurizing the government and other major stakeholders to reject it. The group supporting the idea focuses on the economic benefits over the environmental effects on the society whereas the other group believes that the environment is more important than the benefits to the economy. The media has played a really important role in publicizing this debate between the supporters and the opponents. The debate over this project points toward a larger debate in the United States over the dependence of US on non-renewable resources of energy. As mentioned earlier, the Keystone Pipeline project between the United States and Canada would result in both benefits as well as costs. These benefits and costs would in turn affect the economies of these countries as well as the world as a whole. The United States have continued to ignore the importance of the environment as it is one of the largest polluters of the world. It is time for the country to play its part and work for the environment as well. If it could develop a process which would guarantee zero percent of oil leakages and other harmful emissions then it should approve the project. Even then it would have to face pressure from some stakeholders and other environmentalist groups. Therefore, the United States should do a cost benefit analysis of this pipeline project and then it should weigh the costs and the benefits. Works Cited: "2012 ESE Keystone Series." Purdue University. N.p., n.d. Web. 25 Oct. 2012. . "Keystone XL Pipeline." American Petroleum Institute. N.p., n.d. Web. 25 Oct. 2012. . Read More