Keystone Report Brings Pipeline Controversy Back to the Fore

6 February 2014

An executive decision on the controversial Keystone XL pipeline inched closer last Friday, after the US State Department released a long-awaited environmental impact assessment. While the report found that the project would be unlikely to alter greenhouse gas emissions on its own, the White House has stressed that this marks just another stage in the process and does not indicate a final decision.

The pipeline has become a litmus test for the current administration's commitment to tackling climate change, particularly after US President Barack Obama promised last year that the Keystone pipeline would not be built unless it was clear that it would not increase net carbon emissions. (See Bridges Weekly, 27 June 2013)

The proposed oil-and-gas pipeline would transport up to 830,000 barrels of heavy crude oil per day from Canada's western province of Alberta and the US states of North Dakota and Montana to refineries in the US' Gulf Coast. It would require the construction of new pipelines from the Canadian border through to southern Nebraska, and then connect to existing pipelines from there.

First floated in 2005, the project has prompted heated debate in both countries. Environmental campaign groups claim that the pipeline would lock North America into a high-carbon future, and could have devastating effects for wildlife. Industry representatives argue that it would protect the region's energy supplies and create numerous employment opportunities.

In the US, approval of the pipeline falls under the State Department's jurisdiction, since it crosses an international boundary. No timeline has yet been given for US Secretary of State John Kerry's final recommendation, although eight government agencies - including the Environmental Protection Agency and the departments of Defense and Energy - together with the public, will have the opportunity to make their views known over a set comment period.

Pundits suggest that the high-profile decision will reveal the politician's true environmental colours: though Kerry has been a vocal advocate for climate action, he has not publicly made comments regarding this specific pipeline. "To some extent, Secretary Kerry has gotten a pass to date," said Tiernan Sittenfeld, senior vice president of the League of Conservation Voters.

Report highlights emissions, spill risks

The report suggests that a barrel of crude from Canada's Alberta tar sands would be 17 percent more carbon-intensive than an average barrel, but between 2 and 10 percent higher than the heavy crude currently processed in Gulf Coast refineries.

Echoing comments from a draft version released in March 2013, the assessment suggested that blocking the project was unlikely to "significantly affect" the rate of oil sands extraction, given that other transport methods - such as rail - would likely fill the gap.

Looking at alternative transit models, the report offers a detailed comparison of the direct and indirect greenhouse gas emissions in each scenario, suggesting that rail and tanker alternatives would actually range between 27.8 to 41.8 percent higher than the XL pipeline.

The 11-volume assessment also undertakes an examination of the spill risks - in comparison with different scenarios - as well as weighing threats to endangered species, wildlife and terrestrial vegetation, and fisheries. The final report finds that, if it spills, bitumen - the type of crude oil extracted from the Albertan sands - is more difficult to clean up than lighter crude.

The current impact assessment estimates that the project would create 1950 annual construction jobs over a two-year period, once in operation, and contribute a total of around US$3.4 billion to US GDP.

Political battles

The project itself has faced an uphill political struggle since it was first tabled. An earlier version of the pipeline received Canadian governmental approval in March 2010. Canadian Prime Minister Stephen Harper has largely built Ottawa's economic policy around natural resource extraction, and officials such as Natural Resource Minister Joe Oliver have been vocal advocates for the project.

Over in Washington however, Obama delayed granting permission after Congressional and voter backlash, finally snuffing the pipeline plans in January 2012. (See Bridges Weekly, 18 January 2012)

At the time however, he did leave open the possibility of endorsing a new application from TransCanada - the firm behind the proposal - at a later date. The company duly filed a new Presidential Permit application in May 2012, including revised routes.

After the US President's State of the Union speech in February 2013, pundits speculated that a reference to developing technology for cleaner natural gas, as well as reduced dependence on imported oil, was a veiled hint that the pipeline plans would be panned a second time round. (See Bridges Weekly, 13 February 2013)

In the months that followed, lawmakers in Washington have become increasingly divided over the subject. Some Republicans slammed the March draft environmental impact assessment, while others suggested that hesitation over the pipeline could play into the hands of economic rivals such as China. (See Bridges Weekly, 13 March 2013)

Environmental groups react

Many environmental groups have slammed the report's findings, warning that it may be downplaying the project's actual risk. Others were more optimistic, suggesting that the report might still provide the Obama Administration with grounds for project refusal.

"The State Department has given Obama all the room he needs to do what he promised in both campaigns, to take serious steps against global warming," said Bill McKibben, co-founder of 350.org, a non-profit that has opposed the pipeline. Other experts remain divided on the scheme's importance as a contributor to future climate change.

State Department officials indicated that the report was designed to focus on environmental analysis, rather than the broader question on how the project would fit into energy security considerations, or national and international climate change efforts.

ICTSD reporting; "Report Opens Way to Approval for Keystone Pipeline," NEW YORK TIMES, 31 January 2014; "State Department releases Keystone XL final environmental impact statement," WASHINGTON POST, 31 January 2014, "Keystone XL pipeline closer to reality after State Department review," THE GUARDIAN, 31 January 2014.

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