Even If Keystone Pipeline Rejected, Oil May Still Cross Neb. By Rail

fromNET

The proposed Keystone XL pipeline has generated controversy, especially in Nebraska, where opposition to transporting crude from the oil sands of Canada has delayed a national decision on the project.

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Now let's look at a crude reality of the debate over the Keystone XL pipeline. That pipeline is supposed to carry oil from Alberta, Canada, to refineries at the U.S. Gulf Coast. Pres. Obama has yet to approve the section through Nebraska while reviewing environmental concerns. And the reality is that, with or without the pipeline, the Canadian oil is still being produced. It's still going to be carried south. And even without the pipeline, it may be going through Nebraska. Here's Fred Knapp of NET News.

FRED KNAPP: Nebraska may seem an unlikely target for pipeline opponents. It's not hard to find people in this generally conservative state who strongly support the Keystone XL pipeline, in part because of the energy and construction jobs its supporters promise. At the same time, others here worry about environmental threats and cite the 2010 pipeline accident that dumped nearly a million gallons of thick oil sands crude into Michigan's Kalamazoo River. They've joined environmentalists concerned about climate change in opposing the pipeline. Jane Kleeb founded the anti-pipeline group called Bold Nebraska.

JANE KLEEB: I don't think that we should be building any new infrastructure for oil and that we should should be building infrastructures that doesn't harm our land, water and our property rights.

KNAPP: In 2011, opponents forced pipeline company TransCanada to change its initial proposed route. This April, the State Department delayed a decision until the Nebraska Supreme Court decides whether that route was correctly approved. Opponents were quick to celebrate a temporary victory, but it may indeed be temporary. Even if the pipeline is ultimately rejected crude from the oil sands of Alberta could still come through Nebraska another way.

(SOUNDBITE OF TRAIN)

KNAPP: Right now, coal trains are one of the most visible signs of this state's status as a energy corridor. But increasingly, something else is riding the rails. Local Emergency Services director Bill Pook is sitting in his Jeep in Fremont, Nebraska, watching a train go by.

BILL POOK: Just the other day I was stopped here, and it was petroleum tankers that were coming through. And there was over 100 of them, and it was impressive because they were all the same. They were just all bulk oil tankers. And that could be carrying any greater petroleum product.

KNAPP: Nationwide, crude oil shipments by rail have mushroomed. The Congressional Research Service says they went from fewer than 10,000 carloads in 2008 to an estimated 650,00 this year. Much of that is from the booming North Dakota oil fields. But Bill Day of Valero Energy in San Antonio says some is also from Canadian oil sands.

BILL DAY: Valero is moving heavy Canadian oil by rail to one of our refineries on the Gulf coast. We have plans to build another rail off-loading facility at a different Gulf coast refinery that will allow us to bring even more heavy Canadian oil down there. It's already taking place.

KNAPP: The Burlington Northern Santa Fe Railroad won't say how much oil it carries on its line through Fremont, where it's coming from or even what its future plans might be. But in January, a State Department report said if Keystone XL is not built, as many as 1,400 additional rail cars carrying oil could pass through Fremont and other Nebraska towns every day. An alternative route could take the shipments farther East through Minneapolis and then De Moines.

Pipeline opponents dispute that more crude will be coming out of the oil sands one way or another. They argue that if the pipeline isn't built, more oil will stay in the ground because it costs significantly more to ship it by rail. But shippers and refiners may be willing to absorb some of those costs. With the decision about the pipeline not expected until after the November election, the question of how much oil comes through Nebraska and how, won't be answered for a while. For NPR News, I'm Fred Knapp in Lincoln, Nebraska.

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