Building the Keystone XL pipeline to bring Canadian tar sands oil to refineries in the United States could add more than 100 million additional metric tons of carbon dioxide to world emissions—four times more than the maximum estimated in the State Department’s study of the project’s environmental impact, according to a new study.
The reason, said two researchers from the Stockholm Environmental Institute in the journal Nature Climate Change, is that extra oil flowing onto world markets through TransCanada’s pipeline would lower world market prices enough to stimulate extra consumption of oil.
Refining and consuming that extra oil would, in turn, increase greenhouse gas emissions.
This was a factor that the State Department never considered in its voluminous study of the Keystone XL, they said.
The final decision by President Barack Obama is still pending on the project. He has said that he would not approve the pipeline unless it “does not significantly exacerbate the problem of carbon pollution.”
Tar sands crude is much dirtier than other forms of oil, and environmental groups have fought the Keystone XL in part to make a case against building large infrastructure projects that would lock in carbon emissions for decades to come.
“Our simple model shows that, to the extent that Keystone XL leads to greater oil sands production, the pipeline’s effect on oil prices could substantially increase its total GHG impact,” the study said.
Similar work by the same researchers, Peter Erickson and Michael Lazarus, was published during the State Department’s consideration of the pipeline. The agency was aware of the work, but brushed it off in a footnote of its final environmental impact statement, which was thousands of pages long.
“We see no indication that the State Department has considered these market effects in its assessment,” Erickson and Lazarus wrote in the updated, peer-reviewed version of their work.
Models like theirs, they wrote, are commonly used in this kind of economic analysis, and reviews of methodologies have warned against ignoring the factors they studied when making policy judgments on oil markets and similar issues.
They said that similar approaches could be used in making decisions on other energy infrastructure investments in light of the problem of global warming emissions. Examples would be investigations of coal rail lines, natural gas export terminals, deepwater oil rig construction, and other projects that would increase global fossil fuel supplies.
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