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Keystone XL Oil Pipeline Gets Boost From State Department Review



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By Neela Banerjee

Tribune Washington Bureau


WASHINGTON — A long-awaited environmental review of the Keystone XL oil pipeline released Friday by the State Department found the project would probably have a negligible impact on climate change, bolstering the case for the controversial project as it heads to the White House for a decision on its construction.

The amount of oil extracted from the huge tar sands deposits under the Canadian Great Plains will be roughly the same whether the 1,200-mile pipeline from Hardisty, Alberta, to Steele City, Neb., is built or not, the department’s final environmental impact statement concluded. As a result, the report found, it would not add significantly to the world’s greenhouse gas emissions.

If the pipeline is not built, oil companies and the Canadian government will find other ways — primarily rail — to ship the oil to market, the State Department analysis concluded. Already, over the last three years, rail shipments of oil from the tar sands region have increased from near zero to roughly 180,000 barrels a day, the report said.

“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,” the report concluded.

Proposed route and previous proposed route for the controversial Keystone XL pipeline

President Barack Obama has said he would make the final decision on the $5.3 billion project and that his main criterion would be whether it could be built without significantly worsening the problem of carbon pollution. Because the pipeline crosses a U.S. border, it requires a presidential permit from the State Department.

The environmental review, which does not take a position on whether to approve the pipeline, was welcomed by the project’s supporters, but was vigorously challenged by environmentalists, who contend that it fails to take into account numerous projections that say Keystone XL would lead to more oil extraction. The pipeline, which could carry 830,000 barrels a day, would connect to pipelines that reach refineries on the Gulf of Mexico.

Federal agencies have 90 days to submit comments on the final assessment, while the public has 30. Among the agencies expected to weigh in is the Environmental Protection Agency, which has been critical of previous State Department reviews of the project.

After the comments are submitted, Secretary of State John F. Kerry will have to decide whether the pipeline is in the “national interest.” The decision would then pass to Obama. Neither Kerry nor the president faces a deadline on when to make those rulings.

A decision on the permit was expected in late 2011 but was postponed until after the presidential election, in part because of widely held concern that the State Department’s original environmental impact statement did not adequately assess the pipeline’s effect on greenhouse gas emissions or on a huge aquifer in Nebraska.

The pipeline plan has since been rerouted to avoid many of the sensitive areas above the aquifer.

After Obama and the Democratic-controlled Congress failed to enact climate change legislation in the president’s first term, opposition to the Keystone XL pipeline became a galvanizing issue for many environmentalists who have otherwise supported the president. Polls have shown broad public support for building the pipeline, except among liberal Democrats, who oppose it.

In the wake of the State Department’s final report, environmentalists vowed Friday to ratchet up the pressure to reject the pipeline. “The release of the new report will be a green light to escalate our efforts,” said May Boeve, executive director of, an environmental group.

Environmentalists said the study neglected research that shows the pipeline would play a central role in the planned expansion of oil sands extraction, including a report by the Canadian Association of Petroleum Producers.

“For them to say it is inevitable that the oil will be extracted because these other infrastructure projects will be built or rail will be built up is just not true,” said Doug Hayes, staff attorney with the Sierra Club. “The oil industry itself is saying that Keystone will have an impact on extraction.”

But supporters of Keystone XL said the final assessment should clear the way to getting a permit.

“Five years, five federal reviews, dozens of public meetings, over a million comments and one conclusion — the Keystone XL pipeline is safe for the environment,” said Jack Gerard, president and chief executive of the American Petroleum Institute, an oil industry trade group in Washington. “This final review puts to rest any credible concerns about the pipeline’s potential negative impact on the environment. This long-awaited project should now be swiftly approved.”

Russ Girling, chief executive of TransCanada, which would build the pipeline, said, “The environmental analysis of Keystone XL released today once again supports the science that this pipeline would have minimal impact on the environment.”

The pipeline itself would not generate a lot of emissions. Rather, the key dispute is whether it would lead to more oil sands extraction, a process that generates more carbon dioxide than conventional oil drilling.

Oil sands deposits are a mixture of clay, sand, rock and a tarry fossil fuel called bitumen, which can be hard as a hockey puck. About one-fifth of Alberta’s bitumen deposits can be strip-mined. The rest is deeper and would be tapped by injecting superheated steam. Both methods require burning fossil fuels that emit carbon dioxide.

The State Department analysis backed away from more definitive statements the agency made in a draft environmental review in March that Keystone XL would have little impact on the environment.

Instead, the current analysis conceded that mining Alberta’s bitumen would generate an average of 17 percent more greenhouse gas emissions than conventional oil refined in the U.S. It also said that, under certain scenarios, the pipeline could add as much as 27.4 million metric tons of carbon dioxide to the atmosphere annually, or the equivalent of putting 5.7 million additional cars on the road.

Canadian oil industry officials, however, have said that they are pushing to cut emissions and have formed an alliance to develop new methods to deal with environmental challenges.

But Environment Canada, the government agency responsible for monitoring greenhouse gas trends, issued a report in October that forecast sharp, sustained growth through 2020 in carbon dioxide emissions from the exploitation of oil sands. By that year, nearly all of Canada’s emissions increase will be due to oil sands extraction, the report says.

Environmentalists also point out that the State Department’s inspector general is conducting an inquiry into whether the contractor that produced the final impact statement, Environmental Resources Management, failed to disclose recent work it did for TransCanada, resulting in a conflict of interest.

The State Department ran into similar conflict-of-interest issues with a previous contractor on earlier environmental studies. The inspector general’s report is due early this year.

Kerri-Ann Jones, an assistant secretary of State, said the State Department had followed “very, very rigorous” conflict-of-interest guidelines with the company and she was confident the inquiry would not find any violations.


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GRAPHIC (from MCT Graphics, 202-383-6064): OILPIPELINE

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Keystone XL Oil Pipeline Gets Boost From State Department Review