In the last month, professional activists have continued their repeated attempts to undermine the integrity of the State Department and the five-year long environmental review process for Keystone XL. The request for delay is premised on a collection of disparate market analyses issued since March 2013. Ordering a new SEIS on this basis would set a precedent for a never-ending review process. These groups have tried to stall and delay this important process at every step of this review, including releasing a misleading report regarding green house gas emissions related to the project. We have rebutted these claims here.
These requests have had little to do with safety or environmental assessments. It is patently clear that the intent of this request is to obfuscate and delay the Presidential Permitting process in order to kill the project.
After five years of these tactics, demand for Keystone XL and Canadian oil sands hasn’t wavered at all. In fact, the International Energy Agency’s chief economist has stated that “the world needs every single drop of Canadian oil.”
The following claims are just the latest attempt by political activists to create further delays. These claims do not meet the required legal threshold for requiring an additional SEIS:
1. “DSEIS relies on an ‘overly-simplistic, outdated view of a rapidly changing oil market.”
With more than five years of ongoing environmental impact studies, Keystone XL is without a shadow of a doubt, the most studied and scrutinized pipeline project in history. There are more than 12,500 pages of exhaustive scientific research compiled through four environmental impact reviews. Each iteration of EIS has become broader in scope and each has concluded that Keystone XL will have minimal impact on the environment and negligible impacts on both greenhouse gas emissions (GHGs) and global climate change.
2 . “Rail is not a feasible alternative for Keystone XL”
These claims fly in the face of virtually all available data regarding oil-by-rail transport. Producers are investing in getting their product to market and with that investment we’ve seen enormous growth in both Canadian and American oil-by-rail transport. Given the amount of time it has taken to get new pipeline infrastructure approved, rail is now a permanent part of many oil producers’ long-term strategies. There are currently more than 40 pipeline projects proposed in Canada and the U.S., all of which have substantial commercial interest.
Canadian producers have placed orders for 19,000 coiled and insulated tank cars that are expected to be delivered in 2014. This represents a capacity to move approximately 870,000 barrels per day. To date, 16 rail transload terminals are being built/expanded in Western Canada by six companies – Canadian Pacific Railway, Altex Energy, Canadian National Railways, Torq Transload, Gibson Energy, Canexus Corp. and Keyera/Enbridge. According to the American Association of Railroads, rail deliveries of crude oil and petroleum products in June 2012 alone jumped 51 per cent from a year earlier to an average weekly high of 10,500 tanker cars (one rail tanker car holds about 700 barrels). This is equivalent to 930,000 barrels of oil per day shipped (on average) for the first half of 2012 – greater than the entire capacity of Keystone XL.
3. “Keystone XL is crucial to the increased growth of the [oil] sands industry in both the long-term and short term”
The Canadian oil sands are a critical strategic resource for North America. The oil sands are the third-largest oil reserve in the world and represent 60 per cent of the global reserves open to private sector investment and development. Moreover, 22 per cent of current production from the Canadian oil sands is controlled by U.S. multi-national companies, 13 per cent by other international producers and 65 per cent by Canadian-owned entities. Approval or denial of one pipeline project cannot simply change the production outlook of this critically important resource.
This graph illustrates a number of pipeline projects already proposed that will transport Canadian oil sands across North America and to new markets; many of which will be in service within the next five years.
Recent industry reports and statements do not warrant revisiting the conclusion that the oil sands will be developed regardless of whether Keystone XL is approved or not. The Canadian government has made it abundantly clear to the United States and to the world that the oil sands are open for business. President Barack Obama has acknowledged that, “It’s important to understand that Canada is going to be moving forward with tar sands, regardless of what we do. That’s their national policy, they’re pursuing it.”
Setting the tone for National Interest
President Obama was more than clear when he stated that the critical issue in determining whether Keystone XL will be approved or denied would be whether the project “would significantly exacerbate carbon pollution.”
Today, GHG emissions from the Canadian oil sands total 55 million metric tons of CO2-equivalent. These emissions represent approximately 7.8 per cent of Canada’s GHG emissions and less than one-fifth of 1 per cent of global GHG emissions.
Referencing the Draft Supplemental EIS, the Congressional Research Service recently found that GHG emissions from Canadian oil sands delivered by the pipeline would increase annual U.S. GHG emissions by 0.06 per cent to 0.3 per cent
Climate scientist Chip Knappenberger calculated that the impact on the global average temperature from the carbon dioxide emissions, resulting from the use of the oil carried by the Keystone XL Pipeline (operating at full capacity) to produce energy, lies somewhere between 0.00001°C and 0.0001°C per year. In other words, if the Keystone XL Pipeline ran at full capacity between now and the end of this century, the total amount of global warming produced from its oil would be about five one-hundredths of a degree Celsius.
Demand for heavy oil in the United States Gulf Coast region is largely supplied by Venezuelan and Mexican national companies. The crudes imported from these regions are comparable in composition and GHG intensity to Canadian crude. A 2012 study by IHS CERA confirmed that “[i]f Keystone XL is not built, the United States will import more heavy oil from Venezuela; resulting in little to no change in the overall GHG intensity of the US crude slate).” This is why approval of Keystone XL will only impact the source of the heavy crude oil.
Given that the decision will have little impact on GHG emissions, the only relevant question is whether the U.S. wants to source its heavy oil from Canada, a friendly and stable ally with strict environmental standards, or from other suppliers whose interests are not aligned with those of the United States and have no GHG production standards.