What’s likely to happen with the Keystone XL oil pipeline

Keystone pipelineWith President Obama’s veto of the Keystone XL pipeline bill last week, it’s likely that the Canadian-US oil agreement will be stalled out for now. On Wednesday, the Senate will vote to override the president’s veto, but it will be a very close call.

The Keystone XL pipeline has been a battleground for environmental groups, the Canadian government and oil companies, Republican leaders in the House and Senate, and the US State Department for the past six years. In his written statement, Obama said that because the bill “cuts short thorough consideration of issues that could bear on our national interest — including our security, safety, and environment – it has earned my veto.”

So, what are those issues that could bear on national interest?

  • Economics: House speaker John Boehner (R-Ohio) thinks it’s a “no-brainer” and a national embarrassment that countries like Russia and China are moving ahead on massive pipelines, but the US can’t get the project off the ground. “The president is just too close to environmental extremists to stand up for America’s workers,” Boehner said in a statement. Supporters of the pipeline say that it would create construction jobs, reduce oil prices, and help grow the economy.
  • Environmental issues: Sierra Club Executive Director Michael Brune says that the president has all the evidence he needs to reject the Keystone pipeline for now – it may contribute significantly to the climate crisis, and Republicans are too tied into their big oil allies. Other Keystone opponents argue that it would accelerate climate change, it could pollute waterways along the pipeline’s route, and won’t be contributing very much to the US economy.
  • State Department: White House Press Secretary Josh Earnest told media that one of the reasons the president vetoed the bill is that the US State Department is still conducting a review of the massive pipeline that would be moving about 800,000 barrels of crude oil per day from Alberta to oil refineries in Port Arthur, Texas. Secretary of State John Kerry has been getting a great deal of pressure to give the green light to the pipeline, but the review process has been dragged out. The State Department had asked federal agencies for feedback on the $8 billion pipeline project, and hasn’t been clear about when its official statement will be released.
  • US and Canada relations: The Canadian government and oil industry need to have Alberta tar sands processed in Texas and then distributed to oil refineries in the US and Canada. Canadian officials have expressed frustration with the decision, and suggest that it could set a bad precedent for bilateral trade agreements between the US and Canada.
  • Too much gray area: Some of the Keystone opposition arguments come from concern that the facts may be distorted, and that investing $8 billion in the pipeline may not be worth it. While up to 42,000 jobs could be created, these are temporary construction jobs lasting one-to-two years; only about 50 full-time jobs such as pipeline inspectors would be put into place. There’s also the fact that plenty of oil and gas are being extracted from shale fields through hydraulic fracturing; and there’s so much global oil supply out there that oil prices – and gasoline – will stay low for the foreseeable future.

Carsharing and ridesharing services gaining more interest from major automakers

UberAutomakers may follow Daimler’s lead in carsharing and ridesharing services. Daimler’s Car2Go carsharing service has been opening new locations in North America and Europe this year – and now Toyota and Ford are investing more in these alternative transportation services.


Toyota’s i-Road is a small three-wheel car that’s being tested out in a carsharing program in Tokyo designed to support public transport. It’s also being used as part of a carsharing program in the French city of Grenoble. Toyota’s concept is tied into commuting workers in cities who may choose to switch from their car to trains while going to and from work.


The Toyota i-Road is small enough to cut through traffic and may help alleviate congestion in cities. It’s being tested out for now with carsharing service Park2 and is being marketed to corporate clients and individual members.


Ford is also funding a test project that could bring a ridesharing service to the market that would compete with Uber. Ford is working on its own ridesharing mobile device application and a vehicle that would provide the transportation. Ford’s ridesharing shuttle may be tested out on the streets of London staring later this year.


There are no details on the vehicle yet, but it will be a “dynamic social shuttle,” that’s part of about 25 experiments Ford has taken on. It’s part of Ford’s game plan to focus less on vehicle manufacturing and more on mobility.


Automakers are closely following the growing interest in ridesharing services like Uber and carsharing services such as Car2Go and Zipcar. They’re following the demographic trends of more people moving into major urban environments, and younger potential customers putting off getting their drivers licenses and vehicles. Vehicle sharing could also help alleviate traffic congestion and air pollution in densely populated cities.


BMW also sees it as a way to get consumers more excited about owning one of their products. Richard Steinberg, who used to head up BMW and Mini’s electric car sales in North America, now serves as CEO of DriveNow USA, a BMW-owned carsharing program. “We definitely get lots of people excited about being behind the wheel of a premium product,” Steinberg said.


BMW appears to agree with Ford on the changing role of automakers. BMW has added that it not only leads the way on premium products but it now includes the phrase “and premium services for individual mobility” in its mission statement, according to Steinberg.


Major auto insurance provider USAA is taking ridesharing very seriously. USAA is working with state insurance departments in Colorado and Texas to offer coverage for drivers in Uber and other ridesharing services. “Ridesharing is a growing industry, and it’s important that our members have the right insurance coverage,” said Alan Krapf, president, USAA Property and Casualty Insurance Group. State Farm and Allstate are also looking into different insurance coverage options for drivers who work for ridesharing companies.