Market governmnet and orgainzations (Keystone ) (Article Sample)

Student’s Name Professor Course Date Introduction Keystone Pipeline Project is one of the leading collaborative efforts between Canada and US wherein both the countries are involved in the establishment of an oil pipeline between the two countries. It is meant for transporting crude oil and other oil related products to the refineries in US. Once completed, this pipeline will be more than 2000 miles long and will be covering the areas such as Alberta and different State of US. What is important to note that it is a phased project and interconnected with other projects also making it a keystone pipeline project supporting other smaller projects also. Three phases of the project are already complete with fourth phase is in construction stage. Considering the overall length of the pipeline and its design, there have been different issues, which have been highlighted. One of the key criticisms and serious issues to be dealt with is the environmental impact of this pipeline on various areas. Apart from this, there are also economic and political issues involved in the construction of this pipeline project. This project however, will focus upon identifying and exploring economic issue of whether this project will actually result into stimulation for the economy besides creating jobs for both the countries. There has been a criticism on whether the project has been actually able to generate the same level of economic stimulus and job creation in both the economies or not. It was considered as an important project to provide $7 Billion stimulus besides creating approximately 200,000 jobs in the country. However, there have been conflicting estimations regarding the consequence of the project on economy. Greenpeace, one of the leading campaigning organizations also appealed to the SEC to scrutinize the claim of project creating 200,000 jobs during its entire construction period. President Obama was also quoted as being saying that the overall jobs created by the project will be around 2000. There have also been issues regarding the capacity utilization of the pipelines as it has been suggested that pipeline may create serious capacity issues considering the overall construction cost involved in the production of this pipeline. It has also been suggested that this pipeline may not yield benefits to the local oil supply as it has been constructed to actually export the Canadian oil to China. This argument therefore suggests that such heavy expenditure on the construction of the pipeline may not result into same level of economic benefits being transferred to the local economy specially the States which are offering tax exemptions to this project (Flynn, 2012). Introduction Definition of Problem The problem here in is a case with the Keystone pipeline project, which was mainly constructed to create economic stimulus of more than $ 7 million, and more than 200, 000 jobs to the youths. The project upon completion has elicited a series of conflicting opinions from many people across the two regions. Most of these raise questions on both the credibility and viability of the project. Contrary to the Canadians and the US expectations, the company is totally on the other side likely to cause more loss than the benefits anticipated. There are also allegations that the pipeline would actually not export oil to the US, but to China, one of the issues that greatly raise the credibility as well as the viability of the report throughout the implementation season. Stating historical facts The keystone pipeline project was collaboratively rolled out to export crude oil to refineries in the US. This project was aimed at boosting economic stimulus of the country by $7 billion, and was equally meant to create over 200,000 jobs for citizens of both countries. The project was also tailored to provide support for other projects in the region hence making them survive. The cost of setting up the project significantly provided conviction that it would be viable and of great benefit to the two countries. The progress of the project has however not indicated any sign of the anticipated benefits. Contradictions have surrounded the project with many raising alarm over its viability and the ability to fulfill its intended mandate satisfactorily. The project leaves more questions than answers as the truth regarding its progress finally uncovers. The billion-dollar project cost the two countries a great deal, and letting things it die, would result into such a big loss to both the countries. The idea of the Keystone pipeline transporting oil to china is also alarming since that was not part of the original plan. Progress on the project The project is currently complete up to the third phase, and the fourth phase is under way. The fourth phase is however facing a number of controversies over its routing which passes through to Nebraska. Most of these are related to the environmental hazards attached to this project. Relatively, part of the pipeline route that should go through the sea brings further controversies over the fourth stage of construction. Overall purpose of this paper In lieu of the above allegations and conflicts over the Keystone pipeline project, this research is aimed at making in depth research into the conflicts and problems surrounding the project, and then coming up with possible recommendations to help find an ultimate solution. The research will take into consideration, the environmental, political and the economical impacts of the project vis a vis the current progress. In addition, the research will take historical perspective of this project into account while attempting to analyze the salient issues revolving around its viability and project life. Literature Review Historical perspective of the issue The Trans Canada Corporation proposed the project on 9th February 2005. However, the communications, energy, and paper workers Union of Canada in 2007 requested the Canadian government to block any regulatory approvals for the project; terming it as a trick to benefit the US citizens with permanent jobs. The commission further indicated that the project was meant to reduce Canada’s energy security as well as jeopardize job creation and investments in the Canadian energy sector. Despite this, the Canadian national energy board went ahead and approved the construction of the Canadian section of the pipeline. The US government, through the Department of state also played their part by issuing a presidential permit, which authorized construction, the maintenance and operation of the pipeline at the United States – Canada border. In 2008, the ConocoPhillips purchased 50% of the project stake. The TransCanada however agreed that they would buy the shares held by the ConocoPhillips and become the sole owner of the project. The process of acquiring all the necessary legal documents pertaining to the transfer of shares took over two years. The construction also took another two years hence the pipeline from Alberta to Patoka, United States started operating in 2010. The keystone project began as a collaborative project that was to strengthen the economic status of the US and Canada. The pipeline was meant to transport crude oil from Canada to the US refineries. The project was seen as capable of boosting trade within the two regions and was to create many job opportunities between the two countries. The governments of both the two countries were optimistic about the project benefits and they fully pledge their support for the same. Concerns have however been raised over the projects feasibility in terms of environmental sustenance amidst other conflicting ideas. Further research digging dipper into the project reveals causes of conflict over the project’s key intention and whether it was sufficiently planned for before the release of the funds. Related issues highlighted in literature The literature reveals a number of issues surrounding the project at hand. Most of these have been raised by the two countries owing to the levels of risks attached to the project development. The most common conflicts involve the environmental issues, the conflicts of interests, geopolitical issues, conflicts of interest, political issues, indigenous issues, safety issues, economic issues, and issues relating to public opinion among others. Environmental factors Despite the various conflicts in opinions regarding who was meant to benefit from the keystone pipeline project, there are various environmental concerns that were equally attached to the same. A number of environmental activists, citizens, and politicians have express concerns over the negative environmental impacts likely to be brought about by the Keystone project. One of the biggest environmental issue lies on the risk of oil spillage along the pipe; experts fear that this could easily lead to sensitive terrain and would further increase the greenhouse gas emissions by nearly 17 percent during the extraction of the oil sands. According to Samuel Avery, a social activist, mining on the Alberta tar sands would increase carbon dioxide in the air by 50 to 60 parts hence raising the total levels to at least 450ppm. This is the least threshold for critical climate feedback and it is the point where global warming begins to take effect. Another environment concern is that oil spillage on the pipeline would cause air and water pollution hence interfering with water supplies as well as causing harm to birds and water creatures. The pipeline’s original route plan went through the sand hills, the Nebraska wetland ecosystem and then to the Ogallala Aquifer which is among the world’s largest fresh water reserves. The Ogallala aquifer covers eight states in the US, and the same time providing nearly two million US citizens with drinking water. The Aquifer is also said to be supporting agricultural projects worth $20 billion. After the opposition from activists, th...