Keystone XL and the energy rush that could change America forever
The following is excerpted from Tony Horwitz’s BOOM: Oil, Money, Cowboys, Strippers, and the Energy Rush That Could Change America Forever, published by Byliner. BOOM is available at Byliner.com, or at Amazon, Apple, and Kobo.
Meandering south from Cold Lake on small roads, I entered a new landscape. The boreal forest of northern Alberta gave way to rolling prairie, grain silos, and rural crossroads. The oil sands were now behind me — or rather, flowing beneath me. Every road had pipeline crossing signs or ditches for new lines alongside or piles of pipe sections waiting to be laid. All pipes led to the place I was headed: Hardisty, home to Canada’s largest oil depot and the site where the Keystone XL was slated to begin.
At first glance, Hardisty, population 650, looked much like other sleepy settlements I’d passed. But in the distance loomed a field of circular white storage tanks, like metal mushrooms sprouting from the prairie.
“Most people see that from the highway and think it’s the town,” said Shari Irving, the innkeeper at the Solitaire Lodge, where I pulled in for the night. The Solitaire was more barracks than motel, housing a dozen dorm-like rooms along a narrow corridor. “No one comes to Hardisty for a holiday,” explained Irving, who ran the lodge with her husband, a native of New Zealand. “Oil is bloody good for business,” he interjected. “Why shouldn’t we profit instead of those piss pots and communists in Nigeria and Venezuela?”
Hardisty, however, had yet to prosper from the oil-sands boom. The storage depot lay beyond the town limits, so no tax from the terminal flowed into local coffers. Most workers lodged and shopped in a more distant town that had better facilities. Also, as I saw the next morning, the oil depot didn’t employ many people, at least not directly.
Parking on a hill overlooking the site, I gazed down at 60 or so squat white tanks, some of which had geodesic domes. Trucks rolled in and out, but no humans were visible on the ground. The place looked like a lunar self-storage facility.
Entering the terminal, I was buzzed through a gate marked TRANSCANADA KEYSTONE PIPELINE. In contrast to other companies I’d struggled to contact, TransCanada had taken my calls and arranged a tour of its Hardisty facility. After years of campaigning for the XL, TransCanada had a well-oiled PR machine, including a spokesperson from corporate HQ in Calgary who drove three hours to join my interview with Bryan Templeton, the company’s manager in Hardisty.
Templeton didn’t need reinforcement. A round-faced man with blocky glasses and “BRYAN” stitched to his coveralls, he brought a homespun air to the business of piping millions of barrels of oil into the United States. “Heavy crude from the oil sands is your molasses in January,” he said, in his trailer office. “Lighter crude is more like maple syrup.”
Templeton had grown up nearby, the son of a mechanic and farmer who played banjo in a bluegrass band. At 61, Templeton still lived in his hometown and raised chickens with his wife. Also disarming was the agrarian lexicon he used to describe oil transport. Hardisty’s massive storage terminal was a “tank farm,” the crude stored in its silos was “feedstock” for refineries, and there was something called a “smart pig” that slid through the pipe from tank farm to tank farm.
“PIG,” it turned out, was an acronym for “pipeline inspection gauge,” a device that monitored for corrosion and other faults. “Smart” referred to the magnets and electronic sensors inside, which collected data that was downloaded, like an airplane black box, when the pig was “caught” at the other end.
“If the pig reveals a minor problem, we can Band-Aid the pipe on the outside,” Templeton said. “If the problem is bigger, we stop the flow, cut out a section, and replace it.” He made moving crude sound as safe and straightforward as running water through a garden hose.
It isn’t, of course, beginning with northern Alberta’s bitumen, which he likened to toffee. This dense substance has to be processed into a lighter blend or diluted with chemicals before it can so much as flow. Once in the pipeline, the oil requires pumps and other machinery all along the way, to maintain the right pressure and temperature to keep it flowing properly.
Also, rather than being a single hose, the Keystone is a complex network of pipes. Its first phase, approved with little fanfare in 2008, carried oil from Alberta to Manitoba before turning south to Nebraska. From there it branched, sending crude to Midwest refineries and to a massive tank farm in Cushing, Okla. An extension of this line, recently completed, links Cushing to the huge, heavy crude refineries on the Texas Gulf Coast.
The Keystone XL — short for “express line” — is the last, missing artery of this transcontinental system. If approved and built, it will trace a much more direct route from Alberta to Nebraska. The diameter of the proposed XL is also 20 percent wider than the existing Keystone. This means the XL will more than double the amount of oil-sands crude that TransCanada can pipe into the United States and deliver feedstock swiftly and directly to Gulf Coast refineries. All told, the completed Keystone system will have the capacity to carry 1.3 million barrels of crude a day from Alberta to Texas — roughly the amount the United States imports via oil tankers from Saudi Arabia.
From his trailer office, Templeton drove past a maze of pipes and valves before parking beside a white steel tube with a red metal cap and a plastic drip pan beneath it. This ordinary-seeming set of fixtures was the precise starting point of the existing Keystone pipeline. “The pig goes in the red door, and we gradually open valves to start the flow of oil,” he said. “We call that ‘launching the pig.’”
There wasn’t much else to see, except three oil-storage tanks. In all, given that TransCanada’s Hardisty facility was ground zero for a pipeline that has detonated a firestorm of debate, it seemed a modest affair.
But this was only “the tip of the iceberg,” Templeton said, driving behind the small compound we’d just toured. Before us sprawled “Hardisty B,” a busy construction site with storage tanks and rows of pipes sticking out of the ground like metal seedlings. This area was slated to become the starting point of the XL. Driving on, Templeton showed me another site, where foundations had been laid for eight more storage tanks, capable of holding an additional 3 million barrels of oil.
“We’ll end up with a very large oil facility,” he said. Though TransCanada, in this respect, was simply keeping up with the Joneses. “Everyone here is in expansion mode.”
Explosion mode seemed more apt. When I mentioned the pipeline work I’d seen north of Hardisty, Templeton said four new lines were being laid to bring crude directly to the tank farm from the Fort McMurray region. Another, existing line was being doubled in capacity. New outgoing lines were also being built, or under review, to link Hardisty to both coasts of Canada.
And that was only the pipelines. Just east of the tank farm, we drove past a huge rail facility — one of several new terminals shipping crude overland across North America. The amount of Canadian oil moving by rail tripled in 2013 alone and in a few years will exceed the quantity that TransCanada hopes to ship through the XL.
“We’re all in the transport business, and a pipeline, in that sense, isn’t much different from a truck or railcar,” Templeton said, “except we’re safer and more efficient.”
It was true that moving crude by rail or truck was costlier than by pipeline, consumed more fuel, and posed a more immediate risk to life and limb — as evidenced by the derailment in Quebec that had cost 47 lives. But pipelines weren’t “safer” when it came to the environmental damage wrought by leaks, particularly of bitumen oil.
Conventional oil, when spilled in water, tends to stay on the surface. But this isn’t true of diluted bitumen, called dilbit. In 2010, a pipeline operated by TransCanada’s main competitor, Enbridge, ruptured and spilled 20,000 barrels of dilbit into Michigan’s Kalamazoo River. The diluents quickly evaporated, leaving the heavy bitumen to sink. The result has been the costliest and most difficult onshore oil spill ever to occur in the United States. The cleanup is ongoing.
In 2013, another major spill, from an Exxon pipeline in Arkansas, dumped dilbit into wetlands and onto suburban lawns, forcing residents to evacuate. The cause of the spill was a cracked seam, undetected by the smart pig that had been sent down the line just a month before to detect exactly this sort of problem.
These two calamities — as well as minor leaks in the existing Keystone that TransCanada began operating in 2010 — had greatly amplified opposition to the XL and given foes a strong argument against the pipeline, beyond its consequences for climate change.
Templeton didn’t dismiss the danger of leaks and acknowledged that pigs, though smart, are not infallible. Still, TransCanada’s technology was “state-of-the-art,” he said, and a problem area could be shut down in 10 minutes, maximum, “so if there’s a leak the volume of that spill is going to be much less than before.”
As we returned to his office, I asked Templeton how he felt more generally about the wrangle over the XL. “We’re a political football that’s been tossed around for five years,” he said. “My feeling about Mr. Obama is: Make a decision and I’ll respect you. Have the balls to make it, either way, so people like me can get on with the job.”
Templeton struck me as very sincere and capable. I had no cause to doubt that this 27-year veteran at the tank farm, and his staff of technicians, would strive to operate the XL to the safest standard. But the tour he’d given raised a broader issue, which had gnawed at me since seeing the explosive growth in the oil sands. As the Syncrude spokesperson had put it to me in Fort McMurray (in words the TransCanada rep from Calgary repeated verbatim in Templeton’s office), “Product will find its way to market.”
This was a convenient PR line — the oil will get out, if not by the XL, then by other, possibly more hazardous means. But it begged the question of what all this added oil production and transport meant for the planet.
Barring the border against the XL might incrementally slow the flow of Alberta’s oil into the United States and make a statement about energy and climate change. However, quarantining the oil sands and keeping all that carbon in the ground looked to me like a pipe dream. From what I’d seen in Alberta, the wolf wasn’t at the door. It was already in the house.
My last stop at the tank farm did nothing to dispel this impression. I went to see Anita Miller, mayor-elect of Hardisty and a senior administrator at Gibson Energy, a major oil transporter. She’d worked at the tank farm for 30 years and confirmed that almost every company was rapidly expanding, including Gibson, which was building more storage and a pipeline to the new rail facility nearby. This made it hard for Miller to comprehend the opposition to the XL.
“If this was the first such pipeline, or the only way to transport the oil, I see the argument,” she said. “But look out my window. We store 4 million barrels in those tanks, and that’s just us. Enbridge has even more. Then there’s Husky, the Koch brothers, and the others. The oil is pouring in here, and it’s going out almost as quickly.”
Miller hoped all this activity would bring at least a temporary lift to the struggling town of which she was about to become mayor — another reason she wondered at American opposition to the XL. “I have to believe there are a lot of other little towns down the line that could use a boost,” she said, “just like Hardisty.”