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 project’s impacts on climate change would factor into the U.S. State Department’s 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.
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 project’s impacts on climate change would factor into the U.S. State Department’s 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 Department’s 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
pipeline’s construction, it may have
oversight stemming from federal environmental statutes that govern the review. Further,
Congress may seek to influence the State
Department’s permitting process
or to assert direct congressional authority over approval through
new legislation.
Date-of-Report:-August 15, 2013
Number-of-Pages:-19
Order-Number:-R43180
Price:-$29.95
TO ORDER:
Add to Shopping Cart:R43180
e-mail: congress@pennyhill.com
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.
Posts
