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Is the Keystone Tar Sands Pipeline in America's Best 'National Interest'?

The decision now rests with Sec. of State Clinton—and the pipeline's proponents and opponents are gearing up for their final arguments.

Sep 12, 2011
(Page of )
Secretary of State HIllary Clinton

WASHINGTON—Proponents and opponents of the fiercely debated Keystone XL pipeline agree on at least one point. The next three months will be crucial in bolstering their respective arguments about a proposal to pump Canadian oil sands via a 36-inch pipeline through America's heartland to Gulf Coast refineries.

Barely two weeks ago, pro-pipeline contingents were claiming victory and anti-pipeline forces were fuming after the State Department declared that the project would cause minimal environmental harm.

But now both sides are girding for the federal government's next step. It requires the State Department to take the lead in determining if Keystone XL is in the national interest. The $7 billion pipeline, a project of Alberta-based TransCanada, would travel 1,702 miles through six states. Secretary of State Hillary Clinton has promised to say yes or no to the company's application for a presidential permit by the end of the year.

Pipeline advocates are still confident they will prevail. However, opponents are increasingly optimistic that expanding their case beyond environmental concerns could give them an edge. This broader 90-day review—known by the cumbersome name of "national interest determination"—will focus on economic, political, energy security and foreign policy considerations, as well as environmental repercussions.

The State Department has scheduled a series of eight September and October public meetings in the half-dozen states along Keystone XL's proposed route—Montana, South Dakota, Kansas, Nebraska, Oklahoma and Texas—plus a final one Oct. 7 in Washington, D.C. The department also will accept written comments through Oct. 9.

Environmental justice and conservation organizations seem re-energized by this opportunity to expand their side of the pipeline story.

"The State Department has committed to this national interest conversation being serious and we are going to take them at their word," Danielle Droitsch of the Natural Resources Defense Council's international program told InsideClimate News. "That means not taking a narrow view of what is in the national interest."

She and others said they will continue to address the project's environmental impact. But now they'll also hammer on what they perceive as the faulty reasoning of pipeline proponents who stress the pipeline's social and economic benefits, particularly job creation and energy security.

Droitsch said Keystone XL's opponents are much more educated and savvy about pipeline issues now that the permit process is moving into its fourth year. They plan to highlight evidence that they say shows the pipeline could lead oil companies to raise gasoline prices in the Midwest and export Canadian diluted bitumen to China instead of keeping it in the United States.

"Those economic issues, the ones about gas prices, energy security and whether the crude stays here, are of greatest concern to Americans," Droitsch said.

In the meantime, TransCanada remains confident that its application is solid, even as it braces for another round of fireworks from pipeline opponents.

"We understand why the State Department has set up an extremely comprehensive review," TransCanada spokesman Shawn Howard told InsideClimate News. "We respect that process. There are still some final questions that have to be answered. With the national interest determination, there will be a lot of information to sift through."

Howard said the "professional activists" who are lambasting Keystone XL don't have a grasp on the U.S. demand for crude oil, how oil products are transported or the economics of pipelines.

"I expect a concoction a day for the next 90 days," he said. "These groups will drag in everything and the kitchen sink. It's just an absolute bunch of rubbish."

A Rubber Stamp?

The State Department released its long-awaited final environmental analysis of Keystone XL on Aug. 26. It was the third iteration of the document during the protracted federal review.

In a teleconference with reporters, Kerri-Ann Jones, assistant secretary of state for oceans and international environmental and scientific affairs, emphasized that the final evaluation was by no means a rubber stamp.

"The final environmental impact statement is not the decision regarding the permit," Jones said. "[It] is one piece of information that will be considered. This is not a lean in any way toward one particular decision or another."

Howard said TransCanada wasn't surprised that the State Department once again found few flaws with the project, "because the facts about the pipeline don't change."

But Droitsch said deficiencies in the final evaluation are further evidence that Clinton has failed on her promise to leave no stone unturned in the environmental impact review. She added that the State Department still hasn't gathered the information officials need to decide if Keystone XL meets the Obama administration's climate and energy goals. For instance, she said the final environmental impact statement still doesn't address a litany of issues the Environmental Protection Agency spelled out over the last year.

Initially, the EPA gave the State Department its lowest grade of "inadequate" back in July 2010 when Clinton's team issued its first draft of the environmental review. That dressing-down forced the department to collect more data before completing a revamped draft last April. In June, the EPA bumped up its grade on the second attempt from "inadequate" to "insufficient information."

Shortcomings cited by the EPA included failing to fully address safety and oil spill risks, not considering an alternate route, as well as missing the mark on calculating lifecycle greenhouse gas emissions, the potential damage to wetlands and migratory birds, and the dangers to Native Americans and other at-risk communities.

EPA officials are now preparing a response to the State Department's final review, agency spokeswoman Stacy Kika said via e-mail. Once again, it will come from assistant administrator Cynthia Giles and her staff at the Office of Enforcement and Compliance Assurance.

Not Clearly Defined

Conservationists are wary of the national interest determination portion of Keystone XL because it isn't covered by the clear standards laid out in the National Environmental Policy Act (NEPA). The White House Council on Environmental Quality (CEQ) is responsible for coordinating NEPA.

NEPA's strength, watchdogs say, is that it required the State Department to listen and respond to public comment during the pipeline's environmental evaluation process. They fear the upcoming hearings in the six affected states won’t receive equal treatment.

"The national interest determination is a highly discretionary process," Ryan Salmon, energy policy adviser with the National Wildlife Federation, said in an interview. "Unlike NEPA, there are no formal criteria for soliciting and considering public views."

Rules for the national interest determination concerning energy are laid out in a three-page executive order signed by President George W. Bush in 2004.

Jones, the State Department spokeswoman, explained that Clinton's team has made the public comment sessions a priority even though the meetings aren't required.

"This is such an important project, we need to have more interaction with the public," she said. "We want to get as much feedback as possible and have this be as transparent as possible."

One State Department gathering will be in the center of Nebraska's fragile sandhills landscape, which rests on the treasured Ogallala Aquifer. Another will be in the oil refining community of Port Arthur, Texas, where poor and minority residents living near refineries are already burdened with multiple sources of emissions.

During the national interest period the State Department is also required to consult with the EPA, the Department of Energy, the Department of Transportation and five other "cooperating federal agencies."

Due to the international nature of Keystone XL, a "thumbs up" or "thumbs down" on the pipeline falls to the State Department.

Politics Could Tip Decision

Salmon, of the National Wildlife Foundation, is among those who think the Keystone XL decision could hinge on politics as the Obama re-election machine begins whirring into overdrive.

During the 2008 election, the vibrant first-term senator from Illinois was especially adept at attracting young organizers with an environmental bent who had a knack for garnering money and support from the disengaged and the disenfranchised. An Obama nod for the Keystone XL pipeline could alienate those youthful organizers and squelch their enthusiasm for the 2012 election.

Elijah Zarlin is one those young go-getters. In 2008, when he was in his late 20s, his Chicago-based new media team broke electronic fundraising records for Obama.

Last week, he took a break from his job at San Francisco-based CREDO Action to join thousands of demonstrators in Washington, D.C. Vermont activist, author and professor Bill McKibben had organized the two-week, peaceful sit-in to try to convince the president to nix Keystone XL, even if the State Department gives it the OK.

"Do we really want to help promote the extraction of a carbon bomb?" Zarlin told InsideClimate News a few hours before U.S. Park Police officers arrested him and 139 protesters Aug. 29 for refusing to budge from the sidewalk in front of the White House. "It's really horrible."

Zalin doesn't expect environmentalists to defect to the GOP if Obama approves the pipeline. But if the administration rejects Keystone XL, it could reignite fervor for Obama that has faded noticeably in the past year.

"People wanted to be optimistic because his campaign was about hope and change," Zarlin said. "If he approves this, it will put a huge dark cloud on our future."

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