Canada-U.S. Blog Trade Lawyers Cyndee Todgham Cherniak and Susan K. Ross

Keystone XL: Everybody Wins

Posted in Cross-border deals, Cross-border trade, Energy, Environment

By: Chuck Andary, University of Windsor law student

The Keystone XL oil project is exactly what everyone with even a hint of knowledge on the subject thinks it is: a massive pipe that carries oil from the Alberta oil sands to Oklahoma and Texas. On that alone, one can make a qualified guess on what the debate on the construction of this pipeline centres on: jobs vs. the environment. But what if, in reality, it doesn’t have to be this way?

TransCanada, the company behind the project, projects that thousands of jobs will be created as a result. Not a tough sell during difficult economic times; especially considering that it will help a province where the unemployment rate is on the rebound. Furthermore, such a pipeline is yet another step in closer bilateral relations between the two countries. This pipeline that transcends the border would create thousands of jobs on both sides. Oh, and it shifts some of that American oil dependence from the Middle East to Canada. Why the debate?

There’s that pesky issue that keeps gaining steam – the environment. Not that I’m against environmentalism, but sometimes the concerns are misplaced. This particular project does not pose a significant enough risk to the environment to forego the creation of thousands of jobs. TransCanada states that pipelines are the safest method to transport oil. This is a difficult statement to accept considering the news coverage that pipeline spills have had so much news coverage over the past few years. Dismissing this statement, however, would be careless without looking at the context in which it is made.

Today, we need oil. There is no disputing that. Even the staunchest environmentalist will realize that the world’s dependence on oil has not yet yielded to the benefits of renewable energy. Since we need oil, we need a way to transport it from areas where it does exist to areas where it doesn’t exist. While pipeline leaks to occur, let’s consider the alternatives for transport: the US Department of Transportation Pipeline and Hazardous Materials Safety Administration estimates that it would take 750 tanker trucks a day to transport what a modest pipeline could transport. Or, if rail is the preferred method, it would take 75 railcars each carrying 2000 barrels of oil daily. When you consider the fuel that these alternatives will use in transporting the oil, as well as the risk of accident, TransCanada’s claim becomes more sensible. A pipeline is not a completely safe way to transport oil; but it is the safest way to do it.

Construction of this pipeline will use American and Canadian firms, create American and Canadian jobs, and result in increased trade between the United States and Canada. Bilateral negotiations such as this one, where both governments are on board (and Canada is openly preferred over other countries), demonstrate the strong ties that both countries have with each other. Opening the border to ventures such as this one is a useful and worthwhile way to integrate our economies and benefit from what each country has to offer – either in a physical or abstract sense.

For a detailed summary of the Keystone project, the CBC has put together a succinct FAQ.