Keystone XL Pipeline: Undermining U.S. Energy Security and Sending Tar Sands Overseas

Issue Paper
January 17, 2012

The national debate surrounding the Keystone XL tar sands pipeline has obscured the fact that a key purpose of the pipeline is to export Canadian oil to the world market via the U.S. Gulf Coast -- a plan that would threaten the farmlands and water of America’s heartland. Canada isn’t even producing enough oil to fill its existing pipelines, which are running half-empty. So why is Keystone XL such a priority for the oil industry? Because Keystone XL is actually a pipeline that bypasses America in order to maximize Big Oil’s profits.

By skipping over refineries and U.S. consumers in the Midwest, tar sands producers will be able to send Canadian crude to the Gulf Coast refineries in tax-free Foreign Trade Zones, where it can be refined and then sold to international buyers—at a higher profit to Big Oil.

There are clear alternatives to allowing the United States to be an oil conduit for tar sands merely to accommodate evergrowing profits for big oil companies. As American gasoline consumption continues to shrink, the United States can continue its current trajectory to reduce its oil dependency by improving fuel efficiency and clean energy investments. These investments will create tens of thousands more jobs than Keystone XL ever would—and without risking a major oil spill. Taking concrete steps to reduce the country’s oil dependence is the only way to increase U.S. energy security.