The key claim of environmentalists opposing the Keystone XL pipeline is that oil produced from the Canadian oil sands produces much more greenhouse gases than conventional oil production. However, the environmental impact report released from the US State Dept. concludes there is a mere 2% difference in CO2 emissions from oil sands production vs. the Venezuelan crude currently refined on the U.S. Gulf Coast.
Keystone Pipeline Poses 'No Significant Impacts' To Most Resources Along Path, US Says
By TENNILLE TRACY And EDWARD WELSCH
The U.S. government on Friday concluded that a controversial oil pipeline extension that TransCanada Corp. wants to build from Alberta to Texas wouldn't pose a significant threat to U.S. resources along the pipeline corridor, in a determination supporters said builds momentum for final approval.
The findings, released by the U.S. State Department, will play a key role in the federal government's decision to either approve or deny construction of the 1,700-mile Keystone XL pipeline. A decision is expected by year-end.
The Keystone XL pipeline extension, under U.S. review since 2008, would pass through six U.S. states and have the capacity to transport about 1 million barrels of oil a day.
The State Department's review "reaffirmed the environmental integrity of the project," TransCanada said in a statement. The review process "has been the most exhaustive and detailed review for a cross-border pipeline that has ever been undertaken by the Department of State."
Environmental groups have been vocal opponents, in large part because the pipeline will be used to transport oil from Canadian oil sands, which emit more greenhouse gases during production than other types of oil. The groups are also opposed to mining in Canadian wilderness and are concerned about spill risks along the pipeline route.
The Canadian oil sands contain 170 billion barrels in heavy crude oil, the world's third-largest deposit, and are in northeastern Alberta.
The State Department downplayed the significance of its newly released environmental review, saying it will also weigh the economic impact of the pipeline, as well as energy security questions and foreign policy concerns, before making a final determination.
"This is not the rubber stamp for this project," said Kerri-Ann Jones, an assistant secretary at the State Department.
Observers said the environmental review finding is significant. "If the State Department now has what it sees as a supportive environmental statement, I don't see how they can turn down this project," said BMO Capital Markets analyst Carl Kirst.
The State Department outlined some risks from the project, including the potential for spills along the pipeline route, which goes over a large Midwestern underground water source called the Ogallala Aquifer. But the department concluded a spill would only affect a small area.
"In no spill incident scenario would the entire ... aquifer system be adversely affected," the study said.
The department study also conceded the key environmental claim that oil sands produce more greenhouse gases than other oils, but said the carbon dioxide emissions from oil sands are only 2% higher than the Venezuelan crude currently refined on the U.S. Gulf Coast.
The U.S. Environmental Protection Agency had objected to the State Department's draft environmental impact statement on the grounds that it needed to do a more complete analysis of oil sands' greenhouse gas emissions.
The EPA as well as members of the public will have a chance to comment on the report.
The release of the State Department's review coincides with multiday protests in front of the White House in which more than 300 people have been arrested.
Protesters are urging President Barack Obama to block the pipeline. "The document still fails to address the key concerns for landowners and wildlife," Jim Lyon, National Wildlife Federation senior vice president, said, adding a legal challenge is possible.
Canada is the largest supplier of oil to the U.S., exporting some 2 million barrels a day to its southern neighbor. About half of Canada's oil production comes from the oil sands. Proponents of the pipeline extension say Canada is a more politically stable and environmentally responsible oil producer than other sources of U.S. oil imports.
Without the Keystone expansion or other pipelines built out of western Canada, Canada will run out of spare pipeline capacity near the end of the decade, according to a study by consulting firm EnSys Energy released last year.
However, EnSys concluded that even if Keystone isn't built, other pipelines will support the continued growth of the oil sands industry.