The Crumbling Environmentalist Case Against the Keystone Pipeline

Data undermine concerns about carbon emissions, pipeline safety

November 6, 2013

A new report showing that importing Canadian tar sands oil would have a negligible impact on American greenhouse gas emissions is the latest in a series of developments that have undermined the environmentalist case against the Keystone pipeline.

The report, by IHS Cambridge Energy Research Associates, suggests that rejecting the project could actually lead to an increase in emissions.

Supporters of the Keystone pipeline, which would connect Canada’s wealth of "tar sands" crude oil to refineries on the American gulf coast, pointed to IHS’s findings as further confirmation of the project’s environmental soundness.

It was the latest revelation that undermines environmentalist opposition to the project, Keystone supporters said. The IHS analysis followed reports that oil companies are seeking out alternative, less environmentally friendly, means of transporting Canadian crude.

Killing the Keystone Pipeline has become a priority of the American environmentalist community, even as some liberal commentators question the political wisdom of its intense focus on the project.

The pipeline’s most vociferous opponents "are obsessed with a program that amounts to a rounding error" with respect to total U.S. carbon emissions, wrote New York Magazine’s Jonathan Chait.

"There is no environmental case against the Keystone XL pipeline," said James Taylor, senior fellow for environmental policy at the Heartland Institute.

President Barack Obama has stated he will not approve the pipeline if it results in an increase in U.S. carbon emissions.

However, supporters of the project say Canada will export its petroleum products regardless of his decision.

"The oil will be produced and will be used either here in the United States, in China, or elsewhere," Taylor insisted.

Recent remarks by Environmental Protection Agency chief Gina McCarthy suggest that even the administration’s most strident environmentalists know that Canadian crude will be extracted and burned regardless of the president’s decision on Keystone.

"If there’s oil there, someone will find it and use it," McCarthy told the Boston Globe on Monday. She "didn't buy the argument that blocking the Keystone pipeline would prevent the extraction of tar sands oil," the Globe’s David Abel noted.

While blocking the pipeline would not likely affect global emissions, Obama’s benchmark for Keystone approval focused solely on emissions associated with American energy use.

IHS’ report, released on Tuesday, suggests that a decision to kill the pipeline would have a negligible impact on that front.

"Although oil sands are among the more GHG-intensive crudes, they are not the most intensive," IHS noted. "GHG intensity of crude from oil sands relative to other crudes imported to U.S. is lower than often assumed," IHS noted in a press release on the report.

The report found that on an average "well-to-wheel" basis—from the point of extraction to the point at which the refined product is burned—tar sands oil emits 12 percent more carbon dioxide than the average barrel of oil refined in the U.S.

That is comparable, the report notes, to oil extracted from other regions that export large amounts of oil to the U.S.

Oil produced domestically actually has a higher range of potential well-to-wheel emissions, according to a chart included in the report. As a result, if fewer Canadian imports led to more domestic extraction, a rejection of Keystone could lead to the production of oil with a higher greenhouse gas intensity.

The emissions intensity of Venezuelan crude, which the report said is "the most likely alternative to oil sands" for gulf coast refineries, is nearly identical to oil derived from tar sands, IHS noted.

Taylor said he suspects the administration will continue "stalling in the hope the Canadians will soon lose patience waiting on Obama’s decision and will eventually build the infrastructure and enter into contracts to sell their oil to China."

The pipeline has posed a political quandary for the president as the issue pits two key portions of the Democratic Party’s base, environmentalists and labor unions, against each other.

"This running-out-the-clock strategy will allow Obama to claim he never blocked the Keystone XL pipeline and deflect blame for all the missed job creation and economic opportunities," Taylor said.

However, it would not keep tar sands oil out of the United States. As a result of Keystone delays and the potential that the project will be scuttled, oil companies are already investing in alternate means of transportation, primarily rail.

Canada is expected to substantially increase its freight rail infrastructure to account for a sharp rise in oil exports, the New York Times reported last week. New terminals are expected to increase its rail capacity to about 900,000 barrels per day.

"The indecision on Keystone XL really spawned innovation and mobilized alternatives, and rail is a clear part of the options available to our industry," one Canadian oil executive told the Times.

Another option is transportation by sea: Canadian producers can ship oil to global markets if the United States does not appear to be a reliable importer of tar sands crude.

"We want to diversify our markets beyond just moving our product south," an executive for another oil company operating in Canada remarked. "We can get that product on a ship and get it to premium markets in Asia."

These transportation alternatives create additional carbon emissions and air pollution even before the oil is refined and burned, Taylor said.

"Also, burning the oil in China rather than the United States will cause additional environmental impacts, as China does not impose the strict environmental standards that are imposed here in the United States," he said.

Rail transportation also carries more immediate environmental risks, highlighted by recent disasters involving Canadian freight trains carrying petroleum products.

A train carrying crude oil derailed in Lac-Mégantic, Quebec, in July killed nearly 50 people and resulted in a spill of "millions of liters" of oil, according to the National Post. It was the second major oil spill in Lac-Mégantic involving a derailed train in as many months.

Two more trains carrying crude oil derailed in Alberta in October.

The accidents underscored insistence by Keystone supporters that pipelines remain the safest way to transport crude oil.

Data gathered by the American Action Forum show that "hazmat incidents" are far less frequent per unit of oil transported for pipelines than for any alternate means of large-scale transportation.

"Between 2005 and 2009, pipelines transported nearly 17 times more oil than rail.  In the same period, railway travel reported more than twice as many incidents related to the transport of hazardous materials … and 34 incidents per ton-mile traveled for every 1 incident via pipeline," AAF explained.

Environmentalist concerns about the unique dangers of transporting tar sands oil via pipeline—as opposed to other types of crude—are overblown, according to IHS’s Tuesday report.

Contrary to claims that tar sands oil has a more significant corrosive effect than other types of crude, "a number of scientific studies have found no evidence that oil sands crudes subject pipelines to greater risk of damage or spills than other crudes."

Tar sands oil acidity and sulfur content "have been found to be within the range of other crudes transported by pipeline in North America," according to the report.

"Moreover, although these two measures of crude quality are important corrosion indicators under refinery… they are of little relevance under transportation pipeline conditions."

"The U.S. economy will miss a golden opportunity to create jobs and lock in affordable, North American-produced energy" if the Obama administration rejects the pipeline, Taylor said.

"The environment will also suffer, but the Obama administration will please its environmental activist allies and minimize the political price it pays for its anti-fossil fuels zealotry."