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We Still Need the Keystone Pipeline: Opinion

Stocks in this article: XOM

NEW YORK ( TheStreet) --An oil leak that has erupted in Mayflower, Ark., has again brought the Keystone pipeline into question.

But even with this spill of mostly Canadian heavy oil sands crude forcing the evacuation of a dozen homeowners, I don't see how President Obama can deny the approval of Keystone that is due in the next few weeks.

The Arkansas spill is capturing media attention specifically because of the type of oil running through the streets. It is Canadian diluted bitumen -- tar sands oil -- precisely the type that is the target of the new Keystone XL pipeline, which environmentalists have correctly labeled as the dirtiest crude on the planet.

There is little argument that anyone can have with the science of climate change, and the Keystone pipeline is an important symbol -- a worthy line in the sand for climate change -- but I do not see how this spill makes a new argument against the approval of Keystone that the President can ultimately use.

First, the Pegasus pipeline that ruptured was over 70 years old and rerouted from its regular northern flow to flow south with Canadian sands crude precisely because Keystone had been delayed. Exxon Mobil (XOM) can argue convincingly that the new Keystone pipeline would be far less likely to rupture and would return "normal" flow of less toxic crudes through their older pipelines. They can make the case that Keystone XL would have actually prevented the spill in Arkansas.

Second, it is an unfortunate nature of the oil business, but leaks like this happen all the time -- even if they are rarely in suburban communities. With 12,000 barrels recovered, this Mayflower spill will rank as one of the smallest of the over 200 spills that on average are recorded every year here in the United States.

I talk more about this spill and the fate of Keystone XL in the video above.

At the time of publication the author had no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Dan Dicker has been a floor trader at the New York Mercantile Exchange with more than 25 years of oil trading experience. He is a licensed commodities trade adviser.

Dan is currently President of MercBloc LLC, a wealth management firm and is the author of "Oil's Endless Bid," published in March of 2011 by John Wiley and Sons.

Dan Dicker has appeared as an energy analyst since 2002 with all the major financial news networks. He has lent his expertise in hundreds of live radio and television broadcasts on CNBC, Bloomberg US and UK and CNNfn.

Dan obtained a bachelor of arts degree from the State University of New York at Stony Brook in 1982.

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