New Year Brings Renewed GOP Focus On Keystone XL

Jan 6, 2015

One of the first things the Republican majority will take up when the new Congress convenes is a bill to approve Keystone XL. That's the proposed pipeline owned by TransCanada that would transport Canadian tar sands crude to refineries on the Gulf Coast, picking up oil from North Dakota along the way.

In the six years the pipeline has been delayed though, some oil companies have moved on. So why is it still so popular with Republicans?

Here's what Senator John Hoeven, R-North Dakota, has to say: "It is about energy. It is about jobs. It is about economic growth and it is about national security by building a secure energy future for this country and not depending on the Middle East for our energy."

In other words, Keystone XL has come to represent an "all of the above" energy strategy that doesn't discriminate against fossil fuels. But there's another reason why Republicans have latched onto the pipeline — because environmentalists have, too.

"You had one very prominent environmentalist saying if Keystone is put into place it's 'game over for the climate,'" said Barry Rabe, a political science professor at University of Michigan. "That's a pretty extreme statement. But that triggered a lot of protests. And a lot of groups put a lot of energy into trying to at least delay Keystone and potentially block it."

As Keystone has become central to each side's political agenda, oil companies in North Dakota have become increasingly disinterested in the pipeline.

Harold Hamm, the CEO of Continental Resources, one of North Dakota's largest oil producers, recently told reporters the pipeline was "irrelevant." Roger Kelley, the director of regulatory affairs for Continental, confirmed that at a recent meeting in Bismarck.

"We're successfully transporting crude by rail right now," he said. "There are other issues that are much more important."

In the absence of a pipeline, oil companies are moving some 800,000 barrels of oil a day out of North Dakota by train, even though that is more expensive and puts trackside communities at risk. Plus, even if the pipeline were built, it will carry less than 10 percent of North Dakota's daily oil shipments.

"I think when you measure Keystone XL on its specific impact on crude oil volumes leaving North Dakota, it's a pretty small impact," said Lynn Helms, director of the North Dakota Department of Mineral Resources.

Despite this, Helms said building Keystone is still important to oil companies in North Dakota because it is a symbol of their ability to get a large interstate pipeline for crude oil permitted and constructed - something he called "critical."

Beyond the pipeline's symbolic importance to the Republican Party, there's a personal story that helps explain support for Keystone.

Senator John Hoeven – the sponsor of the Keystone XL bill – was Governor Hoeven back when the oil boom in North Dakota first took off in the mid-2000s. Lynn Helms points out that it became immediately clear the state did not have a good way to move all that oil.

"At that time the only two possibilities were crude by rail or Keystone XL," said Helms. "And Governor Hoeven invested a lot of time and effort really pressuring TransCanada and Keystone XL to create an opening for North Dakota crude oil."

For Hoeven, building Keystone was a way of making sure North Dakota didn't get left out of the boom. For Republicans that's what it still represents: Keeping government out of the way, so oil and gas development in America doesn't fall behind.

Inside Energy is a public media collaboration, based in Colorado, Wyoming and North Dakota, focusing on the energy industry and its impacts.