Keystone XL Pipeline: 3 Key Questions

FILE - In this March 22, 2012 file photo, President Barack Obama arrives at the TransCanada Stillwater Pipe Yard in Cushing,
FILE - In this March 22, 2012 file photo, President Barack Obama arrives at the TransCanada Stillwater Pipe Yard in Cushing, Okla. His re-election safely behind him, President Obama is facing mounting pressure to settle a decision that has been trailing him for years: whether to approve the $7 billion proposed Keystone XL pipeline between the U.S. and Canada. (AP Photo/Pablo Martinez Monsivais, File)

On March 1, the State Department issued a report raising no objection to the construction of the Canadian-U.S. Keystone XL pipeline. There will be a 45-day period for public comments and then President Obama will decide whether or not to approve the 875-mile pipeline. His decision will hinge on three critical considerations.

1. Would increased exploitation of the Canadian tar-sands oil increase greenhouse gas emissions? There's no dispute that Keystone XL will accelerate global climate change. The State Department acknowledges that oil derived from the tar sands emits high amounts of greenhouse gases [GHGs]. The Department's March 1 Draft Supplemental Environmental Impact Statement says:

[Western Canadian Sedimentary Basin] crudes are more GHG-intensive than the other heavy crudes they would replace or displace in U.S. refineries, and emit an estimated 17 percent more GHGs on a life-cycle basis than the average barrel of crude oil refined in the United States in 2005.

Nonetheless, the State Department concludes the greenhouse gas increase is not significant.

2. Is pipeline approval a critical determinant of tar sands exploitation? The State Department report asserts it does not matter whether or not the Keystone XL pipeline is built:

Based on information and analysis about the North American crude transport infrastructure (particularly the proven ability of rail to transport substantial quantities of crude oil profitably under current market conditions, and to add capacity relatively rapidly) and the global crude oil market, the draft Supplemental EIS concludes that approval or denial of the proposed Project is unlikely to have a substantial impact on the rate of development in the oil sands...

This conclusion has drawn three objections. The first is that the State Department is inadequate and has not fully considered the impact of Keystone XL on global climate change. Writing in Alternet, William Boardman reported the State Department report was actually written by consultants,

Friends of the oil industry wrote the environmental impact statement issued by the State Department... And it turns out that at least one of the several oil-friendly corporate authors was apparently paid by Trans-Canada, the corporate applicant for -- and the owner of -- the Keystone pipeline.

The second objection to the State Department conclusion attacks the logic that blocking Keystone XL will make no difference in the generation of GHGs. In a March 10 editorial, the
New York Times observed:

Saying no to the pipeline will not stop Canada from developing the tar sands, but it will force the construction of new pipelines through Canada itself... At the very least, saying no to the Keystone XL will slow down plans to triple tar sands production from just under two million barrels a day now to six million barrels a day by 2030.

The third objection is that the State Department overstates the ability of the "north American crude transport infrastructure" to add new capacity, if the Keystone XL pipeline is not approved. Currently, the Alberta tar sands region produces 1.8 million barrels of oil per day that are transported primarily in pipelines. Calgary Herald columnist Stephen Ewart observed,

The looming pipeline bottleneck that's been widely forecast as oil sands production soared in Alberta in recent years is no longer imminent - it's here. The vast underground network of pipes that move approximately 3.2 million barrels of crude oil a day in Canada is operating at capacity... "It's more than full," Brenda Kenny, president of the Canadian Energy Pipeline Association, said in a meeting with the Herald's editorial board this week. "We're in a jam ... the numbers are stark."

The Alberta tar-sands region is authorized to produce 5 million barrels of oil per day. The State Department report assumes that, if the Keystone XL pipeline is not approved, most of the new oil would be moved by rail. However, NRDC attorney Anthony Swift observed,

The reason why rail isn't a feasible alternative to Keystone XL is that it is simply too expensive to support tar sands expansion. State's conclusions to the contrary are due to their substantially underestimating the cost of rail transport.

If the Keystone XL pipeline is not approved, additional tar-sands oil production will be blocked.

3. How will the Keystone XL pipeline decision impact U.S. energy supplies? The third consideration is the impact of a new source of oil on domestic energy supplies. The World's environmental editor, Peter Thomson studied this and concluded:

[Construction of Keystone XL] might increase our energy security somewhat, but nowhere near the extent that supporters are suggesting. But it also is likely that most of the actual hydrocarbons that flow through the refineries at the end of this proposed pipeline will end up being burned elsewhere, at least under current market conditions.
In other words, most of the tar-sands oil would end up being exported.

The State Department's report is inadequate. President Obama should disregard it and block construction of the Keystone XL pipeline.