The Keystone XL Pipeline Is Dead (Again). What Does That Mean For Texas?

Jan 25, 2021
Originally published on January 27, 2021 6:56 am

Julia Trigg Crawford took the news that the Biden administration had canceled permits for the Keystone XL pipeline with a certain amount of skepticism. After all, she said, the pipeline is running oil every day under her North Texas farm.

"I see it from my window when I'm on the tractor. I have to mow around the markers in the pasture,” she said by phone a couple days after the administration officially “killed” the controversial project.

The section of pipeline on her property links a pre-existing pipeline hub in Cushing, Okla., to the Texas Gulf Coast. Initially billed as the southern leg of the Keystone XL, the 487-mile segment was rebranded as the “Gulf Coast Project” in 2012, after the larger Keystone XL became a political hot potato.

Like activists in northern states, Crawford and her allies fought the pipeline. But, in Texas, they found fewer sympathetic politicians and judges.

The Obama administration, which opposed the northern part of the Keystone XL, fast-tracked the Gulf Coast Project, and TransCanada (since renamed TC) began running crude through it in 2014.

“The first product that flowed through their pipeline when they started seven years ago was West Texas crude,” said Crawford, who requests updates from the company on what kind of oil is running under her property. “But then [TC] started adding stuff from Canada and other kinds of things.”

Since the Biden administration's announcement, industry groups, environmentalists and politicians have spoken in black and white terms about the demise of the Keystone XL. But, as Crawford's experience attests, the reality on the ground in Texas is more complicated than the rhetoric would have you believe.

Winners And Losers

President Biden’s decision will not make the Texas section of the pipeline go away, but it will have an impact on what runs through it. The blocked part would have allowed more Canadian tar sands crude to flow to the Gulf Coast – a decision that has created winners and losers in the state.

Despite the teeth-gnashing of politicians and industry lobbyists, Texas oil producers may actually have something to cheer about.

“You have developers in the Permian Basin who are drilling for oil,” Michael Noel, an economist at Texas Tech University, said. “For them, it's good that the pipeline was canceled because that means they don't have to compete with as much oil coming down from Canada.”

On the other hand, he said, Texas oil refiners will be worse off because the pipeline would have meant “more oil would flow from more different sources into the United States and eventually into Texas. And that would help lower the price of oil.”

When it comes to the cost of gas, analysts believe the decision will have a negligible impact at least in the short term.

Ironically, TC could even benefit from the death of their most well-known pipeline. Some analysts believe its stock will get a boost from having the protracted and contentious Keystone XL battle behind it.

The Climate Question

The main reason the Biden administration opposed the project is that Canadian tar sands crude is much more carbon intensive to produce and refine than other types of oil. Some have called it a “climate destroyer.” So climate activists rejoiced at last week's announcement.

“We did it pipeline fighters!” Jane Kleeb, leader of the group Bold Nebraska, wrote in an email to supporters and media. “A decade of fighting in the cornfields, dirt roads and halls of Congress led us to this moment.”

But the administration’s decision will only slow, not end, the movement of crude out of Canada.

Noel points out the pipeline company Enbridge received approval late last year to build a new pipeline, called Line Three, to bring Canadian tar sands into the U.S.

“That is interesting because Biden has canceled the very well-known Keystone XL extension,” he said. “But you haven't heard anything about Line Three or the original Keystone pipeline, and perhaps you won't until those things become political footballs as well.”

And that's the goal of activists like Kleeb, who hope to repeat the victory against the Keystone XL.

Crawford said she shares Kleeb’s excitement over the end of the pipeline's construction. She only wishes more people knew “the story is bigger than just ‘the Keystone XL has been canceled.’”

“No,” she said. “They snuck in 487 miles of it.”

Got a tip? Email Mose Buchele at mbuchele@kut.org. Follow him on Twitter @mosebuchele.

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