Search Penny Hill Press

Tuesday, September 3, 2013

Keystone XL: Assessing the Proposed Pipeline's Impacts on Greenhouse Gas Emissions

Richard K. Lattanzio
Analyst in Environmental Policy

On June 25, 2013, President Obama announced a national “Climate Action Plan” to reduce emissions of carbon dioxide (CO2) and other greenhouse gases (GHG), as well as to encourage adaptation to expected climate change. During his speech, the President made reference to the proposed Keystone XL Pipeline and stated that an evaluation of the projects impacts on climate change would factor into the U.S. State Departments national interest determination. The State Department, in the March 2013 Draft Environmental Impact Statement (DEIS) for the Keystone XL Pipeline, reports estimates for both the direct (i.e., operational) and indirect (i.e., associated with crude oil production and use) GHG emissions that would be attributable to the proposed project. The DEIS finds that “the proposed Project would be responsible for incremental GHG emissions in the range of 0.07 ... 5.3 [million metric tons of CO2 equivalent] annually.” These emissions would represent an increase of 0.001%-0.08% over the domestic GHG emissions totals of 6,822 MMTCO2e in 2010. The State Department bases its findings on the following conclusions: (1) approval or denial of the proposed pipeline is unlikely to have a substantial impact on the rate of development in the oil sands, or on the amount of heavy crude oil refined in the Gulf Coast area in the long term, (2) denial of the proposed pipeline is offset entirely by the expansion of new rail and pipeline infrastructure in North America in the long term, and (3) the cumulative impact of the proposed pipeline would be the additional oil sands production that would become economical given the marginal cost savings afforded by the project over non- pipeline transport.

Many industry stakeholders, the Canadian and Albertan governments, and proponents of the proposed pipeline have generally supported the State Departments findings. They contend that the demand for the oil sands resource, as well as the economic incentives for producers and the Canadian governments, is too significant to dampen production. However, the U.S. Environmental Protection Agency (EPA), among other stakeholders, has questioned several of the conclusions put forth by the DEIS and has recommended that the State Department revisit the analysis. Opponents of the project argue that the Keystone XL Pipeline may have greater impacts than projected in the DEIS if certain State Department assumptions were to differ, including projections for global crude oil markets, rail transport costs, new project costs, refinery inputs,  and carbon pricing policies.

In the forthcoming Final Environmental Impact Statement for the Keystone XL Pipeline (in preparation), the State Department may retain the GHG emissions analysis as detailed in the DEIS, or it may revisit it in light of comments provided by EPA and others. If the State Department revisits its analysis, it may look to model different scenarios for the incremental, or “net,GHG emissions estimates based upon competing projections for North American crude oil transport infrastructure, Gulf Coast refinery capacity, and global crude oil markets (including U.S. tight oil) across the short, medium, and long term. The State Department must then determine if these emissions are considered significant.Members of Congress remain divided on the merits of the proposed project, as many have expressed support for the potential energy security and economic benefits, while others have expressed reservations about its potential environmental impacts. Though Congress, to date, has had no direct role in permitting the pipelines  construction, it may have oversight stemming from federal environmental statutes that govern the review. Further, Congress may seek to influence the State Departments permitting process or to assert direct congressional authority over approval through new legislation.

Date-of-Report:-August 15, 2013


Add to Shopping Cart:


Phone: 301-253-0881

For email and phone orders, provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.