Keystone Review Leaves Door Open for Obama Approval, or Rejection

Approval from Obama would mean locking in a billion tons of extra CO2 emissions over the next few decades, according to the State Dept's final review.

Oil pipeline pumping station serving the first phase of the Keystone pipeline system, which was completed in 2010. Credit: shannonpatrick17, flickr

The State Department completed its formal review of the environmental impacts of the Keystone XL oil pipeline on Friday, sticking to the main, highly controversial conclusion that with or without the project the relentless expansion of Canada's tar sands enterprise would proceed unabated.

But in subtle ways, it left the door open for Secretary of State John Kerry and President Obama to approve or reject the pipeline's permit on the basis of the broader national interest—including the implications for greenhouse gas emissions and their own climate policy priorities.

"Approval or denial of any one crude oil transport project, including the proposed project, is 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," the report said.

At the same time, it maintained that tar sands oil is 17 percent dirtier than the average mix of crude used in the United States, and that the oil moving through the Keystone from Alberta to refineries on the Gulf Coast would add up to 27 million tons of extra carbon dioxide to the atmosphere each year.

That means that President Obama is being asked to approve a long-lived infrastructure project that locks in roughly a billion tons of extra emissions over the next several decades, at a time when nations are trying urgently to convert to low-carbon energy to keep global warming within safe limits.

And, if the State Department's reasoning leads to blessing this pipeline, it is hard to see how any future oil pipeline could ever be rejected as a global warming threat. The same argument would always apply.

MORE: Twitter Responds to Keystone XL Pipeline Review

Officials at the State Department emphasized that the report—which made no recommendation—was not the final say in the long drawn-out debate that has taken more than five years since TransCanada first proposed the pipeline. Kerry and Obama will reach a final decision after a period of further public comment and interagency arm-wrestling that could last for months.

The new report, a State Department official told reporters, is just "one factor in the final determination, which will also weigh national security, foreign policy and economic issues."

So while the central conclusion of the report—that tar sands will boom no matter what's decided—played nicely into the hands of the project's backers, there was enough in the report to keep the hopes of pipeline opponents alive.

For one thing, the final report removed a key clause from the draft, taking out an assertion that  there would be "no substantive change in global GHG emissions" with or without the pipeline.

At a conference call featuring environmental advocates from five major green groups, each speaker pronounced a version of the same sound bite—that the report "gives President Obama everything he needs" to reject the pipeline.

"If he shows some moxie and stands up to Big Oil, he will be the first world leader to stop a project because of its effect on the climate," said Bill McKibben of 350.org.

TransCanada called the report a major milestone.

"We do know that our opponents will continue to oppose and make all kinds of claims," said Russ Girling, the president and chief executive. "But no matter how much noise they make, or how much misinformation they spread, the facts do support this project."

Mike Brune, the executive director of the Sierra Club, said the group would continue to press its claim that the State Department had violated NEPA, the National Environmental Policy Act, by not taking account of the cumulative effects of multiple pipelines. That is one of many objections that environmental lawyers might use as grounds for a lawsuit.

One key to the State Department's analysis was its continued assertion that even if all pipelines were blocked, the Canadian industry could shift to rail. It's an issue that remains hotly disputed.

"If east-west and cross-border pipelines were both completely constrained, oil sands crude could reach U.S. and Canadian refineries by rail," it said.

It also contended that the sudden boom in U.S. oil supplies, which have surged during the writing of the State Department's report by more than the entire capacity of the Keystone XL, would make no difference to the refineries the pipeline is to feed. They prefer heavy oil like Canada's, the report said, to lighter oils such as those the U.S. is pumping out in ever greater volumes.

At the same time, it pulled the rug from under arguments that the pipeline would lower the price that Americans pay for gas, a popular selling point. "Pipeline availability has little impact on the prices that U.S. consumers pay for refined products such as gasoline," it said.

Nor would the project move the needle on the U.S. economy, adding just $3.4 billion to a GDP that runs about $16 trillion a year.

Report to Influence Climate Litmus Test

On a conference call with reporters, Assistant Secretary of State Kerri-Ann Jones, the department's top environmental official, said that the environmental report "presents a considered opinion but does not answer the broader question" of the national interest in the Keystone pipeline.

Even so, the report will weigh heavily on the question of the project's effects on climate change, which Obama has said is a key to his decision.

In a speech last June, the president said: "Allowing the Keystone pipeline to be built requires a finding that doing so would be in our nation's interest. And our national interest will be served only if this project does not significantly exacerbate the problem of carbon pollution. The net effects of the pipeline's impact on our climate will be absolutely critical to determining whether this project is allowed to go forward."

So environmental advocates scoured the report to pick out passages that pertained to that litmus test.

One passage, for example, said this:

"Direct and indirect emissions associated with the proposed Project, as well as those of alternative actions, contribute to cumulative global GHG emissions together with those of other past, present, and reasonably foreseeable future actions."

Another, buried in an appendix, presented a "key finding" that was "clearly supported" by a complex analysis of tar sands emissions:

"The lifecycle carbon footprint, for transportation fuels produced in U.S. refineries, would increase if the project were approved."

And there was this widely cited line:

"Total direct and indirect emissions associated with the proposed project would contribute to cumulative global greenhouse gas emissions."

InsideClimate News reporter Elizabeth Douglass contributed to this report.

Executive summary of the environmental impact statement:

 

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