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Keystone XL oil pipeline clears big hurdle

Pressure grows on Obama to OK project

- The Washington Times - Friday, January 31, 2014

A long-awaited State Department review has raised no serious environmental objections to the proposed Keystone XL oil pipeline, potentially setting the stage for President Obama to approve the massive, politically charged project and dealing a blow to environmentalists who vehemently oppose it.

The lengthy Environmental Impact Study, the final version of which was released Friday afternoon, determined that the Canada-to-Texas pipeline will have little or no bearing on the overall crude oil market in North America. In other words, the report found that greenhouse gas emissions are unlikely to change significantly if the pipeline is built, since Canada will surely continue to exploit the oil sands from Alberta and move the fuel to market even if the project is denied.

With that conclusion, analysts say the study takes away a key argument from environmentalists who have made Keystone a symbol in their larger fight against fossil fuels and believe Mr. Obama's legacy on climate change is linked to whether he signs off on the pipeline.

"Most of the opposition hinged on this environmental piece. Now that that has been debunked, it's much harder for Keystone opponents to raise credible arguments against the project," said Brigham McCown, former administrator of the Pipeline and Hazardous Materials Safety Administration.

State Department officials, however, cautioned against reading too much into the report. It does not offer a final recommendation of whether Keystone is in the "national interest," the key equation that encompasses not only carbon emissions and environmental concerns but also the jobs the project will create, the national security benefits of getting more fuel from Canada rather than the Middle East and other factors.

While State did conclude that the type of heavy crude oil that would flow through Keystone is about 17 percent more "carbon-intensive" that other types of oil, the overall takeaway is that approval or denial of the pipeline will have little or no impact on the broader issue.

"Approval or denial of any one crude oil transport project, including the proposed project, is unlikely to significant impact the rate of extraction in the oil sands or the continued demand for heavy crude oil at refineries in the United States based one expected prices, oil-sands supply costs, transport costs and supply-demand scenarios," the study reads in part.

Bipartisan support for Keystone jobs

Congressional Republicans, joined by many moderate Democrats, have hammered Mr. Obama for delaying a decision on the pipeline. Canadian officials have also pressed the White House for a green light to complete the pipeline, a $7 billion, 1,100-mile project that would carry more than 800,000 barrels of oil each day.

Proponents of the project, such as Sen. Joe Manchin, West Virginia Democrat, immediately lauded the study and said it's further evidence that Keystone – which has been trapped in a limbo of bureaucratic red tape and seemingly endless studies since Mr. Obama came to office – must be built immediately.

"I have been incredibly frustrated for more than five years by the repeated and unnecessary delays in moving forward with the construction of the Keystone XL pipeline. I am pleased the State Department has confirmed there is no evidence of any negative environmental impact from building this pipeline," Mr. Manchin said.

An existing section of Keystone runs through Kansas and Oklahoma to Texas. The proposed portion would run south from Alberta through Montana and South Dakota before reaching Nebraska.

Construction on that section that the project will directly create more than 40,000 jobs, according to the State Department report. Other estimates have said nearly 120,000 indirect jobs also could be created as a result of the project, at least during the construction phase. Lawmakers from both sides of the aisle have cited Keystone as a major shovel-ready project that could go a long way toward jump-starting the nation's economy, particularly in the manufacturing sector.

"The Keystone XL pipeline is the single largest shovel-ready project in America, ready to go, but for years President Obama and his hard-left allies have stalled these jobs in a maze of red tape," said Senate Minority Leader Mitch McConnell, Kentucky Republican. "But if the president meant what he said this week about 'a year of action,' he'll act now on this important project that won't cost taxpayers a dime but will bring thousands of private-sector jobs to Americans who desperately need them."

TransCanada, the company proposing the pipeline, said the report only confirms what it has known all along.

"The case for Keystone XL, in our view, pre and post this report, as as strong as ever," TransCanada President and CEO Russ Girling told reporters in a conference call. "No matter how much noise [environmentalists] make or how much misinformation they spread, the facts do support this project ... it will have minimal impact on the environment and that is a goal I believe we all share."

Environmentalist pushback

Environmentalists, however, see things much differently. Leading environmental activists said Friday that the study actually bolsters their case, thanks in large part to its conclusion that Canadian oil sands is, in fact, more carbon-intensive than other forms of crude oil and therefore would result in more greenhouse-gas emissions.

"It's clear after just glancing at this report that it does give everything President Obama and Secretary of State John Kerry need to reject the Keystone Pipeline outright," said Michael Brune, executive director of the Sierra Club. "The president has a choice .. the president can approve the pipeline and give a windfall to the oil industry or he can live up to his promise and commit to a clean-energy economy for all Americans."

The battle over Keystone comes as several high-profile accidents involving crude oil shipments — including a fiery explosion in North Dakota and an explosion that killed 47 people in Canada last year — have raised alarms about the safety of alternative methods of getting the fuel to refineries.

The report also examines other ways in which the Canadian fuel could be moved, including rail, barge or truck. Each of those options also carries unique safety risks as well as their own emissions.

While there are other options to move the oil, environmentalists believe Keystone is central to the growth of Canada's oil sands industry and that rejecting the pipeline would be a victory in a larger war against dirty fossil fuels.

"Major pipeline proposals like Keystone XL are the linchpin to the industry's expansion plan," said Tim Gray, executive director of Environmental Defence Canada.

White House stays quiet

Meanwhile, the White House remains determined to stay out the fight.White House press secretary Jay Carney repeatedly dodged questions on the issue on Friday, casting the consequential report as only another step in what's been a process lasting the entirety of Mr. Obama's time in office.

"When that document is released, it does not or will not represent a decision. Rather, another step in the process ... there will be an opportunity after the release of the [report] for both the public and other government agencies to comment before the State Department makes its final national interest determination," Mr. Carney told reporters.

The pipeline must be reviewed by the State Department because it crosses an international boundary.

The State Department review now will be open for public comment. When the public-comment period has concluded, the State Department will offer another assessment of whether the project is in the "national interest."

Following that, Mr. Obama will make a final decision.

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