The one issue that may determine if Keystone XL gets approved

Map of the proposed Keystone XL pipeline project, alongside the existing Keystone pipeline (courtesy of the Washington Post).
keystone xl route

This map shows the proposed route for the Keystone XL pipeline, alongside the existing Keystone pipeline (courtesy of The Washington Post).

The State Department released its final Supplemental Environmental Impact Statement (SEIS) regarding the Keystone XL pipeline this afternoon. I won’t write a full overview of the report – there are already several good ones available – but I’ll just make a few quick observations.

If you read the report, you’ll notice that the State Department’s entire assessment of the pipeline’s impact centers on whether or not the project is a literal “keystone” of the continued expansion of tar sands production (sorry for the terrible pun). According to the SEIS, the project holds almost no bearing on the overall tar sands industry, despite the fact that it could transfer 830,000 barrels of oil per day (bpd) from Alberta to the Gulf Coast for refinement. The report bases this conclusion upon the fact that, in lieu of the pipeline, the industry will find alternatives for transport, particularly railways. As the chart below suggests, the amount of tar sands bitumen being transported by rail has spiked in the last few years.

tar sands by rail

The volume of tar sands bitumen shipped by rail from Western Canada since 2011 (courtesy of the State Department).

Accordingly, State concluded that

Approval or denial of any one crude oil transport project, including the proposed Project, remains unlikely to significantly impact the rate of extraction in the oil sands, or the continued demand for heavy crude oil at refineries in the United States.

This assertion is highly debatable, and there is a multitude of evidence that challenges it. Industry representatives have consistently spoken about the importance of the pipeline, and a 2013 Reuters investigation stated that relying on rail for transport would halve the amount of oil extracted from the tar sands. Additionally, a report from the Pembina Institute demonstrated that pipelines like Keystone will be central in shaping the future development of tar sands.

Some of my fellow Keystone opponents have pointed out that the SEIS indicates the project will be responsible for releasing carbon emissions, which would exacerbate climate change. In his statement after the report’s release, Bill McKibben said “this report gives President Obama everything he needs in order to block this project.”

The report is definitely stronger on this front than the draft SEIS. Rather than claiming Keystone would have “no significant environmental impact,” as the draft report did, the final SEIS notes

The total direct and indirect emissions associated with the proposed Project would contribute to cumulative global GHG emissions.

While this is a positive development, the crux of the report still ends up being the market analysis which underlines the projected environmental impacts. Because the report assumes that the pipeline won’t affect overall tar sands production, the SEIS actually concludes that Keystone would be better for the climate and the environment, generally, than all alternatives considered, including the no build option.

keystone climate analysis

Comparison of the annual and lifecycle GHG emissions from Keystone XL and the alternative projects examined in the SEIS (courtesy of the State Department).

I certainly hope that President Obama sticks to the pledge he made this summer, when he stated that he would only approve the pipeline if it “does not significantly exacerbate the problem of carbon pollution.” But I remain concerned that the report may provide him enough clearance to approve the pipeline, given the underlying market analysis.

If I didn’t have a dog in this fight – which I clearly do – I might find it appealing to see a decision of such import resting on something as wonkish and esoteric as a study of energy market dynamics. Hell, I basically went to grad school because I want to work in that world. But there’s too much on the line here.

We just need to trust that the President understands the scope of his decision. We’ve drawn our line in the sand, and there’s no erasing it.

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  • Tom Egelhoff

    That little swing across Montana will produce $60 million dollars annually in property taxes to some of the poorest counties and will be paid by a foreign government. What a great deal.

  • lol Tom. There are more millionaires in Sheridan County MT. (per capita), then any other county in the USA.

  • zeeg

    The dollar amounts constantly spewed forth by pipeline proponents is often exaggerated.Just because a county gets rich doesn’t mean its people do.With environmental risks vs. local economic gain, the former is always down played,the latter always exaggerated by proponents.