Monday, November 2, 2015

Step Toward Canceling Keystone XL Pipeline

The Canadian company behind Keystone XL has asked the U.S. State Department to suspend its review of the proposed pipeline. It’s a first step toward canceling the whole project, which fell victim to falling global oil prices and the high cost of extracting the low-quality crude oil available in Alberta’s oil sands. A major oil dig was canceled a week ago, and that move by Shell surely put a damper on the already dubious pipeline project.

The pending cancellation of the pipeline is a cautionary tale. Had the project gone forward five years ago, it still likely would have been canceled at this point, but at far greater expense — nearing completion instead of being still on the drawing board. It would have been a boondoggle, a massive public giveaway that accomplished nothing. Development of the oil sands can still go forward, but at a slower pace that makes financial sense and that works within the limits of the existing pipeline network.