Keystone Xl Protest

Photo credit: Flickr user tarsandsaction

A decision regarding TransCanada Corporation's (NYSE:TRP) Keystone XL pipeline appears closer than ever before. According to a report from Bloomberg, Secretary of State John Kerry said, in regard to a decision, "I want to do it sooner rather than later, but I can't tell you a precise date." He said this at a press conference in Ottawa this week with the Canadian Foreign Minister.

What that decision will be still remains up in the air as pressure to stop the pipeline continues to build; however, just having a decision would be big news for the oil industry as it will at least have a better grasp of what pipeline capacity will be in the years ahead.

Inching closer
TransCanada first proposed the pipeline in 2008 to take oil from the Canadian oil sands and ship it to refineries along the U.S. Gulf Coast. The $5.4 billion project, however, has been delayed due to opposition from landowners and environmentalists. However, the ultimate decision rests in the hands of Secretary Kerry and President Obama because it crosses an international border.

It's a decision that Secretary Kerry isn't taking lightly. At the press conference he went on to say:

There is a process under way within the department, which requires me ultimately to make a decision, and we will pursue our due diligence with respect to that and it will happen when it is appropriate for that to happen because the due diligence has been done, and I'm prepared to do that.

The issue at hand is whether the pipeline will fuel faster climate change if built, as well whether it will pose a threat to groundwater in its path. Environmentalists see the pipeline lowering the cost of production in the oil sands, which release more greenhouse gasses than other sources of oil. 

Oil sands and emissions
On a wheels-to-wheels basis, oil sands crude is 9% more intensive in producing greenhouse gases than the average crude oil refined in the U.S. according to a study by IHS CERA in 2012. That being said, the industry has reduced the greenhouse gas emissions of the average barrel of oil produced out of the oil sands by 26% since 1990. Further, the industry is working to get its emissions even lower by using new technologies like carbon capture and storage, natural gas engines, and water recycling, which are all designed to further reduce the carbon footprint of the oil sands.

  Oil News Quest Carbon Capture And Storage Royal Dutch Shell Plc

First Quest CO2 Injection Well. Source: Royal Dutch Shell plc Flickr page

One example of this is the Quest Carbon Capture and Storage project by Royal Dutch Shell (NYSE:RDS-A)(NYSE:RDS-B), Chevron Corporation (NYSE:CVX), and Marathon Oil (NYSE:MRO). The $1.35 billion project is expected to come online early next year. Quest is designed to capture about a million tonnes of carbon dioxide per year and store it underground, which will reduce the direct emissions from the partners' oil sands upgrader by 35%.

To put that into perspective, it's like taking 175,000 cars off the road each year. Further, the project will cut the carbon footprint of Shell's unrefined oil by 15% and cut the overall emissions profile of oil sands by 2.2%, suggesting that parity with conventional oil is within reach as more projects like Quest are built.

Secretary of State John Kerry appears to be closer than ever to a decision on the Keystone XL pipeline. No matter what he decides one thing is clear: While the oil sands are dirtier than conventional oil, that doesn't mean the oil must always have that dirty reputation. The industry, along with governments in Canada, is investing billions to clean up the carbon footprint of the oil produced from the oil sands.

While not everyone wants to see this progress, it is impossible to deny the fact that progress is being made to clean up this oil and reduce its impact on the environment. 

Matt DiLallo has no position in any stocks mentioned. The Motley Fool recommends Chevron. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.