Editorial: Keystone: A pragmatic pipeline proposal

It’s no surprise to learn that the Obama administration’s decision to postpone approval of the Keystone XL pipeline between oil sands deposits in western Canada and refineries on the U.S. Gulf Coast has brought forth a worthy competitor to get the crude moving.

As the Chronicle recently reported, Calgary-based Enbridge and a U.S. partner, Enterprise Products Partners, have announced plans for a pipeline that would bring an estimated 800,000 barrels of oil sands from Alberta to the Gulf Coast for refining.

The planned project would be built in two legs in this country. These would connect with an existing pipeline that links the Canadian resources to a U.S. location, eliminating the need for State Department approval. The two planned legs would be constructed on Enbridge-owned right of way, also speeding up the process.

There are obvious opportunities to be seized while Keystone remains in regulatory purgatory.

Not incidentally, there are also urgent problems to be addressed, which would translate into lucrative opportunities for the Enbridge group. A backup of crude oil, akin to a 24/7 traffic jam, has been created around the pipeline hub of Cushing, Okla., preventing huge amounts of oil flowing to market, especially from north of Cushing.

Some of this is product from the very active Bakken formation that has turned North Dakota into a boom state, and some is from western Canada. One result is a growing price gap of as much as $42 per barrel between these resources and supplies from other global sources, which fetch the higher prices. Clearly, Enbridge sees an opportunity in untangling the mess.

Word of the Enbridge group’s plans has brought speculation that it may cause Keystone to back away from its project. That is Keystone’s call to make, but we believe the future holds the kind of promise that would warrant more than one pipeline connecting Alberta with the Gulf Coast.

We’ve noticed the growing talk of a North American energy alliance linking Canada, the U.S. and Mexico in an effort to insulate our hemisphere from the uncertainties of the global market, the despots, the whims of OPEC and all the rest. This seems like an idea worthy of serious discussion for a number of reasons.

If created, it would put a legal framework around an idea that is rapidly moving toward consensus: The U.S. can and should be energy independent or, at the very least, more reliant on suppliers who share our democratic values and respect for law. Canada stands tall at the top of that list. Including Mexico also makes great good sense. Such a partnership around energy would undoubtedly stabilize that country and could even influence border and immigration problems in a favorable way.

These pipelines represent both a solution to current problems and a welcome commitment to a vastly different energy future.

04/19/2012 - 1:37pm