Deutsche Bank Profits from “Dirty” Canadian Oil

This report is part of our former “Harmful Cases” documentation, where we continuously and concisely recorded human rights violations, violations of international law or environmental destruction caused by companies.

The Keystone Pipeline System has recently become one of the oil industry’s most controversial projects. TransCanada’s 4,247km Pipeline System runs from Alberta, Canada, through the Midwest United States, ultimately terminating along the Gulf Coast of Texas. The pipeline mainly serves American markets in the Midwest and along the Gulf Coast.

The pipeline system, if completed, will have four major pipelines. However, the fourth phase of construction, the so-called Keystone XL extension, has led to an outburst of concern. If completed, the $7 billion extension will increase the system’s transport capacity to 1.1 million barrels of oil per day, constituting approximately 6% of US daily oil consumption. Oil companies like ExxonMobil, Valero, and Lyondellbasell have already invested in multimillion-dollar facility upgrades in anticipation of increased production demands. Many of the project’s critics, however, remain unconvinced. In January 2012, the Obama administration rejected TransCanada’s bid to begin constructing the Keystone XL extension pending further review of the project’s environmental impacts. The proposed Keystone XL extension would cut directly through the Great Plains region of the United States, a distinct ecological and geological region, and would cross the Ogallala Aquifer (among others), vital to the country’s water and food supply. An oil spill in this region could devastate crops, which would in turn have worldwide reverberations in the cost of food.

Critics are also concerned over the particular type of oil that will be transported through the Keystone XL pipeline extension. The oil transported through the Keystone Pipeline System is currently derived from Canadian oil sands (also called tar sands). The Keystone XL extension would emit 17% more greenhouse gas than conventional oil extraction methods. Particularly dangerous are the toxic chemicals released through the process, like sulfur dioxide and nitrogen dioxide. In addition to contributing to smog, acid rain, and climate change, these chemicals reduce air quality and increase the risk of developing chronic respiratory illnesses like asthma. Other concerns over the pipeline extension include water pollution, destruction of wildlife habitats, deforestation, and the threat of oil spills with immeasurable and potentially long-term consequences.

Deutsche Bank currently holds nearly a $15.4 million stake in TransCanada, making them the leading German investor in the company.