Keystone Pipeline to be approved

Report May Ease Way to Approval of Keystone Pipeline

The State Department released a report on Friday that could pave the way toward President Obama’s approval of the Keystone XL oil pipeline.

NY Times,

31 January, 2014

The long-awaited environmental impact statement on the project concludes that approval or denial of the pipeline, which would carry 830,000 barrels of oil a day from Alberta to the Gulf Coast, is unlikely to prompt oil companies to change the rate of their extraction of carbon-heavy tar sands oil, a State Department official said. Either way, the tar sands oil, which produces significantly more planet-warming carbon pollution than standard methods of drilling, is coming out of the ground, the report says.

In his second term, Mr. Obama has sought to make his fight against climate change a cornerstone of his legacy. In a major speech on the environment last summer, Mr. Obama said that he would approve the pipeline only if it would not “significantly exacerbate” the problem of carbon pollution. He said the pipeline’s net effects on the climate would be “absolutely critical” to his decision.

The conclusions of the report appear to indicate that the project has passed Mr. Obama’s climate criteria, an outcome expected to outrage environmentalists, who have rallied, protested, marched and been arrested in demonstrations around the country against the pipeline.

The project, which has been under review by the State Department since 2008, has become a political lightning rod for both the left and the right. Environmentalists rallying for action on climate change have seized on the pipeline plan as a potent symbol of fossil fuel projects that contribute to global warming.

Republicans and the oil industry point to the Keystone project as a symbol of energy independence and job creation, and have repeatedly attacked Mr. Obama for failing to approve a project that could create thousands of jobs.

The report released on Friday, however, is far from the final decision on the project. The State Department must next determine whether the pipeline is in the national interest. That involves taking into account both the environmental and economic impact of the project, as well as its impact on the relationship between the United States and Canada, the nation’s largest trading partner and largest source of foreign oil.

Although Secretary of State John Kerry must weigh in with a recommendation to the president on whether to approve the pipeline, it is the president who must make the ultimate decision. Nonetheless, the assignment creates a difficult situation for Mr. Kerry, who has a long record of trying to tackle climate change and hopes to make the issue a signature of his tenure at the State Department.

Mr. Kerry has repeatedly been asked about his views on the pipeline but has never publicly commented on it. He has no deadline to make the determination. A State Department official said he was preparing to “dive in” to the 11-volume environmental impact statement as a first step.

Eight other agencies with jurisdiction over elements of the project — the Departments of Defense, Justice, Interior, Commerce, Transportation, Energy and Homeland Security, and the Environmental Protection Agency — will also weigh in.

The State Department is also expected to soon release the results of an inspector general investigation into the preparation of a draft environmental impact report, after it was discovered that some consultants with the contractor that wrote the analysis had previously done work for TransCanada, the company seeking to build the pipeline. If investigators determine a conflict of interest in the preparation of that draft, the State Department may have to conduct a fresh environmental review.

Environmentalists criticized the new review, particularly in light of the investigation.

“In what could be perceived as eagerness to please the oil industry and Canadian government, the State Department is issuing this report amidst an ongoing investigation into conflicts of interest, and lying, by its contractor,” said Erich Pica, the president of Friends of the Earth. “By letting the oil industry influence this process, Secretary Kerry is undermining his long-established reputation as a leader in the fight against climate change.”

The oil industry applauded the review, saying they saw it as a signal that Mr. Obama would approve the pipeline.

“After five years and five environmental reviews,” said Cindy Shields, the senior manager of refining and oil sands programs at the American Petroleum Institute, which lobbies for the oil industry, “time and time again the Department of State analysis has shown that the pipeline is safe for the environment.” Now that the review process has moved on to a determination of whether the project is in the national interest, incorporating factors like energy security and foreign relations, “when you look at the rest of those factors, those would be why we will see an approval of this project,” Ms. Shields said.

There are political and strategic advantages to approving the pipeline: It would strengthen relations with Canada and provide a conduit for oil from a friendly neighbor. If the pipeline is approved this year, it could also give a boost to the re-election campaigns of two vulnerable Democratic senators from oil-rich states — Mary L. Landrieu of Louisiana and Mark Begich of Alaska — while silencing critics who for years have pressed the president over the pipeline.

Environmentalists say that if Mr. Obama were to approve the pipeline, it would destroy his efforts to make progress on climate change. Tom Steyer, a billionaire from California and a major donor to Mr. Obama’s presidential campaigns, has started an advocacy group, NextGen Climate Action, that has spent heavily campaigning against the pipeline.

Larry Schweiger, the president of the National Wildlife Federation, said: “This is a large source of carbon that’s going to be unleashed. We’re headed in a terribly wrong direction with this project, and I don’t see how that large increase in carbon is going to be offset.”

Although the pipeline is a potent political symbol, its true impact on both the environment and the economy would be more limited than either its supporters or its opponents suggest.

The new State Department report concludes that the process of extracting and burning tar sands oil creates about 17 percent more greenhouse gas emissions than traditional oil, but that the heavily polluting oil will be brought to market with or without the pipeline.

“It’s unlikely for one pipeline to change the overall development of the oil sands,” a State Department official said.

Because of global demand, the oil will most likely get to market whether or not the pipeline is built. Already, energy companies are moving tar sands oil out of Canada by rail.

“At the end of the day, there’s a consensus among most energy experts that the oil will get shipped to market no matter what,” said Robert McNally, an energy consultant who was a senior energy and economic adviser to President George W. Bush. “It’s less important than I think it was perceived to be a year ago, both politically and on oil markets.”

The new State Department analysis took into account the growing global demand for oil and the rapidly growing practice of moving oil by rail in areas where pipelines have not been built. “Given the anticipated outlook of oil prices and the cost of development, no single project will likely affect the rate of extraction,” the State Department official said.

But moving oil by rail has its own hazards. As the practice has increased in recent years, so have incidents of explosions of rail cars carrying oil.

Supporters of the pipeline say that it would create jobs, though the number may be limited. A study by the Cornell Global Labor Institute concluded that the pipeline would create about 3,900 construction jobs over two years.

Privately, people close to Mr. Obama say that although he is committed to building a climate legacy, he does not see the pipeline as a central part of that effort. Instead, the president is moving forward with a set of E.P.A. regulations on coal-fired power plants, the nation’s largest source of greenhouse gas emissions.

Those regulations do not have the potent political symbolism of the pipeline, but, if effective, they could have a far greater impact on the nation’s greenhouse gas emissions, by freezing construction of new coal plants and closing hundreds of existing plants.

In the administration, many people close to the president have long said they believe that he will try to have it both ways on climate — moving ahead with sweeping E.P.A. rules while approving the pipeline.

But environmentalists are preparing to influence the next stages of the decision-making process, which some say could drag into next year.

“This is the most scrutinized pipeline in the nation’s history,” said Brigham A. McCown, a former administrator of the Pipeline and Hazardous Materials Safety Administration.

“The fact that it’s lasted as long as it has means one of two things,” he said. “They’ve either done a very good, thorough job, or they’ve slowed it down due to political pressure.”