Keystone XL pipeline poses a political dilemma

WASHINGTON – The Keystone XL pipeline does not run through Minnesota. The major rail routes that might deliver much more Canadian crude oil to the U.S. if it is not built do.

As the controversial pipeline passed the U.S. House on Friday and nears approval in the Republican-controlled Senate, Democratic members of the state's congressional delegation face a complicated balancing act.

Their supporters who are advocates of renewable energy expect them to vote against the pipeline. President Obama has threatened to veto the current pipeline bill because it short-circuits his administration's review process.

But Minnesota politicians who oppose the pipeline flirt with a possible long-term increase in oil train traffic on tracks that many constituents say are already overloaded with railcars carrying flammable fuel.

"It is a precarious position to be against oil train transport and to be against the Keystone pipeline," First District Democratic Rep. Tim Walz acknowledged.

Environmentalists who voted for Walz have voiced their disappointment that he voted for Keystone XL in 2014. Walz voted for it again Friday.

"I have people who support me who are frustrated with my vote on this," Walz said.

He thinks Keystone has now become an oversimplified political "litmus test" that won't produce the benefits its supporters claim or the damage its opponents assert.

Still, for Minnesota's Democrats, the situation remains politically tricky. Democratic Reps. Collin Peterson and Rick Nolan joined Walz in voting for Keystone XL on Friday. They were among only 28 House Democrats to do so.

Sens. Amy Klobuchar and Al Franken voted against a Keystone XL bill last year when their party controlled the Senate, saying it did not allow the administrative review process to properly play out. The pipeline approval bill lost. But it is expected to come to a vote next week with Republicans in command.

Neither Klobuchar nor Franken was available for interviews on Keystone XL last week. Both issued statements to the Star Tribune and through communications directors said they will continue to vote against any Keystone XL bill that they believe circumvents the regular review process. Neither specifically addressed potential increases in Canadian tar sands crude oil shipments through Minnesota.

"I have consistently supported allowing the State Department permitting process to move forward so that all issues can be aired," Klobuchar said. "But this decision can't be delayed indefinitely, and I believe the administration needs to make a decision. … We have rail service and rail safety issues that need to be addressed now, even before the pipeline issues are resolved."

Franken said that "the biggest rail safety issues in Minnesota have to do with transportation of highly volatile Bakken oil, which would only be marginally affected by the construction of this pipeline. So regardless of whether or not the pipeline is built, rail safety will continue to be a major problem in Minnesota unless we upgrade rail cars and improve track inspections and infrastructure to prevent derailments."

Roughly 50 oil trains, some of them a mile long, already carry Bakken crude oil from North Dakota across Minnesota each week.

But Alan Stankevitz, a spokesman for Citizens Acting for Rail Safety, said "there is a concern that [Canadian crude] would be coming through. Any derailment along the Mississippi River would be a disaster."

Stankevitz said that is because tar sands crude is so heavy that it will sink to the bottom of the river and be difficult and expensive to extract.

How much more oil would pass through Minnesota without the Keystone XL remains a matter of debate.

The U.S. State Department estimated that Canadian tar sands crude oil could be shipped on 12 to 14 oil trains per week. The biggest market is the United States, but some oil trains could go to ports on the West Coast of Canada for export on oceangoing tankers.

Last week, researchers paid by the American Petroleum Institute, which has spent millions of dollars lobbying for Keystone XL, estimated that by 2019 railcars would need to haul 700,000 more barrels of Canadian tar sands crude per day if the pipeline is not built.

Paul Blackburn, a Minneapolis lawyer who has represented various pipeline foes since 2009, called such assertions "completely ridiculous." Blackburn says oil train traffic in Minnesota will not increase without Keystone XL because enough unused capacity in other pipelines already exists to move any newly produced tar sands crude to the U.S. Gulf Coast.

Blackburn pointed to pipelines running from Hardisty, Alberta, to Flanagan, Ill., which opened in 2009 and 2010, and a third pipeline from Flanagan to Cushing, Okla., which opened in 2014, as a viable alternative to Keystone XL.

He called the State Department analysis "old and duplicitous."

Spokesmen for Canada Pacific Railway and Canadian National Railway, which haul Canadian crude through Minnesota, both declined to comment on how much oil train traffic in Minnesota would increase without Keystone XL.

Still, the consensus is that more Canadian crude is headed across the border, despite the hope of some environmentalists that the costs of tar sands oil extraction will be unprofitable without Keystone XL.

"This business of stopping tar sands oil is just not true," said Nolan, who voted for the pipeline last year and again Friday, despite "serious pushback from environmentalists."

"All you have to do is go to Ranier, where most of the oil comes into Minnesota," Nolan said. "The oil trains are lined up for miles. There's already an abundance."

The pipeline would be "nice to have," said Sandy Fielden of RBN Energy in Houston. But Fielden, one of the country's leading analysts on Canadian oil, said Keystone XL is not something producers "need to have."

Rail-loading capacity for oil is expanding in Edmonton and Hardisty, two of western Canada's big depots, Fielden said. The recent crash in oil prices could curb extraction of tar sands crude if it persists for an abnormally long time, Fielden added, but for now, there is still a profit to be made from tar sands crude with or without a new pipeline.

That was one of the main reasons Peterson, who like Walz and Nolan, represents a rural area where Canadian crude could pass, supported Keystone on Friday. Without the pipeline Peterson believes there will be more Minnesota oil train traffic.

"We need to get oil in pipelines and out of trains," Peterson said. "We need trains for grain. We need trains for coal."

On the other side, Democratic Reps. Betty McCollum of St. Paul and Keith Ellison of Minneapolis maintained opposition to Keystone XL.

"The regulatory process … exists to ensure the safety of our environment and our citizens," McCollum said in a statement to the Star Tribune. "Those protections should not be bypassed in the case of the Keystone XL project and federal authorities must continue to be vigilant about rail safety in Minnesota."

Staff writer David Shaffer contributed to this report.

Jim Spencer • 202-383-6123