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Keystone Report Skirts Climate Analysis Required Under Law, Lawyers Say

State Department assessment focused on market response to rejection, rather than the climate impact and environmental cost of a pipeline approval.

Mar 12, 2013
Secretary of State John Kerry delivers remarks

WASHINGTON—The surprising message of the State Department's latest Keystone review—that the decision whether to approve the disputed pipeline won't have much effect on the environment—can be traced to the way the agency framed the report.

The study presents an analysis of how markets will adjust if the pipeline isn't built. But lawyers and pipeline opponents say that approach allowed the State Department to dodge the central question that the National Environmental Policy Act, or NEPA, poses about major federal decisions: What would it mean for the environment, including for climate change, if the project is built?

Instead, the report looked at what might happen if the pipeline is rejected and declared that any benefits to the global climate would be trivial. Canadian producers would continue to ship oil sands products to U.S. refineries by other means, such as rail, the report concluded, and greenhouse gas emissions from this unusually dirty oil would continue more or less unabated.

That approach "is not in keeping with the letter or the spirit of NEPA," said Pat Parenteau, an environmental lawyer at the Vermont Law School. "It stands the whole concept of examining the consequences of your actions on its head, it really does."

Calling the State Department's approach "highly suspect," "very questionable," and "very disingenuous," Parenteau predicted: "There is going to be litigation if this is approved."

The Environmental Protection Agency, which plays an important role in rating the performance of other agencies in performing environmental assessments under NEPA, has repeatedly urged the State Department to focus on greenhouse gas (GHG) emissions and how to offset them if Keystone were to get the green light.

"We are concerned about levels of GHG emissions associated with the proposed project, and whether appropriate mitigation measures to reduce these emissions are being considered," the EPA said in comments on a previous draft, in 2011.

Those concerns seem likely to be raised again during the 45-day comment period on this latest draft, which was released on March 1. Pipeline opponents have already criticized the market analysis, saying that the development of Canada's oil sands reserves will surely slow if the Keystone isn't built. Alberta's proven reserves of oil are estimated at 170 billion barrels, with 26 billion under active development.

"The fundamental question for State should have been, will this pipeline lead to an increase in greenhouse gas emissions?" said Danielle Droitsch, director of the Canada project at the Natural Resources Defense Council, a leading pipeline opponent. "We don't have to go through this circular, roundabout argument. It's just a really, really nice way to escape doing that analysis."

Dan Simmons, director of regulatory affairs at the Institute for Energy Research, which favors the pipeline and the increased development of Canada's oil sands deposits, agreed with the review's conclusion. The Keystone line "will lead to some higher greenhouse gas emissions, but in terms of affecting climate change, it would truly be a drop in the bucket," he said.

"Is the Keystone XL pipeline in the national interest?" he asked. "The environmental impact statement presents no information about why it isn't."

Precedents Say Climate Must Be Considered

The State Department acknowledged in the draft that building the pipeline would allow hundreds of thousands of barrels a day of some of the world's dirtiest oil to flow to U.S. refineries, producing millions of tons of extra carbon dioxide. But it also said that with or without the pipeline there would be "no substantive change in global greenhouse gas emissions."

Under well-established policy, however, agencies are supposed to address the cumulative harm that individual projects present, even if the emissions seem small in comparison to global totals.

In comments on previous assessments of the Keystone, the EPA warned the State Department "against comparing GHG emissions associated with a single project to global GHG emissions."

It cited guidelines by the White House Council on Environmental Quality for federal agencies that write impact statements, saying that global warming, more than other forms of environmental harm from federal actions, is "the result of numerous and varied sources, each of which might seem to make a relatively small addition" to greenhouse gas emissions.

As one federal judge put it in a 2007 case addressing automobile fuel efficiency standards, "we cannot afford to ignore even modest contributions to global warming. If global warming is the result of the cumulative contributions of myriad sources, any one modest in itself, is there not a danger of losing the forest by closing our eyes to the felling of the individual trees?"

In that landmark case, Center for Biological Diversity v. NHTSA, federal rules setting fuel-efficiency standards were rejected under NEPA when plaintiffs complained that the federal highway agency failed to adequately assess the greenhouse gas implications of its rulemaking, to examine a reasonable range of alternatives, or to fully consider the rule’s cumulative impact.

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