Positive Environmental Report Means Admin Would Need Other Rationale to Kill Keystone

WASHINGTON – The proposed Keystone XL pipeline cleared a major regulatory hurdle on Friday with the release of an environmental impact statement declaring the controversial project presents only a limited environmental risk.


The report, issued by the State Department – the controlling agency since the venture involves both Canada and the U.S. – was immediately attacked by environmentalists and places anew the focus on President Obama, who ultimately has the final authority to approve or disapprove the development despite the findings.

White House Press Secretary Jay Carney declined to say when the president might offer his determination. Obama has, in the past, expressed concern about the pipeline, telling the New York Times that construction won’t be a “big jobs generator” despite claims by some supporters and will do little to enhance the nation’s energy situation.

But the long-awaited report fails to provide the administration with what could have been a strong argument against the project. Instead, the president will be forced to develop a rationale for terminating the pipeline that doesn’t deal with environmental concerns.

“After over five years, President Obama is out of excuses,” declared Nebraska GOP Rep. Lee Terry. “…It would be a disgrace to allow extreme ideologues to obstruct this critical project that will create jobs and help us down the path of energy security.”

According to the report: “Approval or denial of any one crude oil transport project, including the proposed Project, is unlikely to significantly impact the rate of extraction in the oil sands or the continued demand for heavy crude oil at refineries in the United States based on expected oil prices, oil-sands supply costs, transport costs, and supply-demand scenarios.”


The Keystone pipeline, a project of TransCanada Corp., an energy company based in Calgary, Alberta, is primarily intended to transport oil sands bitumen – sands saturated with a viscous form of petroleum — from Canada to Gulf Coast refineries.

Two phases covering 2,151 miles already are operating, one from Hardisty, Alberta, to Patoka, Ill., and a second from Steele City, Neb., to Cushing, Okla. A third phase under construction will run from Cushing to the Texas Gulf Coast.

The pipeline system currently in operation can move up to 590,000 barrels of the crude Canadian oil to refineries in the American Midwest per day.

It is a proposed fourth phase that is drawing controversy. TransCanada wants to run a 1,661-mile pipeline from Hardisty crossing over the border into Morgan, Mont., that would cost about $5.3 billion and move 830,000 barrels of crude oil per day. If approved, it will terminate in Steele City, where the oil will enter the other pipelines.

Environmentalists strongly oppose the fourth phase, expressing concern over oil spills and the potential for damage to the Ogallala aquifer, one of the world’s largest underground water tables, which spans eight states, provides drinking water to two million people and supports $20 billion in agriculture.

Originally the route of the fourth phase was supposed to cross the Sand Hills in Nebraska, a large wetland ecosystem. TransCanada changed the route to avoid the conflict.


But the environmental impact statement determined that extraction and transportation of the oil sands carry little impact and likely will not contribute significantly to global climate change. While extracting and burning tar sands produces greenhouse gas at a rate that is 17 percent greater than the burning of traditional oil, the report held that tar sands oil will wind up on the market regardless of whether the pipeline is built or not.

“Assuming construction of the proposed Project were to occur in the next few years, climate conditions during the construction period would not differ substantially from current conditions,” the report said. “However, during the subsequent operational time period…climate changes are anticipated to occur regardless of any potential effects from the proposed Project.”

As far as the potential for large, devastating oil spills, the report said, “The proposed Project would include processes, procedures, and systems to prevent, detect, and mitigate potential oil spills.”

TransCanada, the report said, has agreed to “incorporate additional mitigation measures in the design, construction, and operation of the proposed Keystone XL Project, in some instances above what is normally required” in order to reduce the risk of spills.

On the economic front, the environmental impact statement found that the pipeline would contribute about $3.4 billion to the U.S. gross domestic product.


“The figure includes not only earnings by workers, but all other income earned by businesses and individuals engaged in the production of goods and services demanded by the proposed Project, such as profits, rent, interest and dividends,” the report said. “When compared with the GDP in 2012, the proposed Project’s contribution represents approximately 0.02 percent of annual economic activity across the nation.”

In addition, construction spending would support a combined total of approximately 42,100 jobs throughout the United States for the up to two-year construction period.

“Of these jobs, approximately 16,100 would be direct jobs at firms that are awarded contracts for goods and services, including construction, by Keystone,” the report found. “The other approximately 26,000 jobs would result from indirect and induced spending; this would consist of goods and services purchased by the construction contractors and spending by employees working for either the construction contractor or for any supplier of goods and services required in the construction process.”

Environmentalists immediately rejected the report’s findings and vowed to continue the fight against the pipeline project.

“Even though the State Department continues to downplay clear evidence that the Keystone XL pipeline would lead to tar sands expansion and significantly worsen carbon pollution, it has, for the first time, acknowledged that the proposed project could accelerate climate change,’’ said Susan Casey-Lefkowitz, international program director of the Natural Resources Defense Council. “President Obama now has all the information he needs to reject the pipeline. Piping the dirtiest oil on the planet through the heart of America would endanger our farms, our communities, our fresh water and our climate. That is absolutely not in our national interest. Keystone XL should be rejected.”


Michael Brune, executive director of the Sierra Club, agreed, asserting that “the President has two choices before him — fighting climate disruption or promoting an energy policy that includes the expansion of dirty fossil fuels like tar sands. The Keystone XL tar sands pipeline fails the basic climate test and it’s not in the interest of the American people. The president should reject the tar sands pipeline once and for all.”

Earlier this week, 16 groups, including the Sierra Club, the Center for Biological Diversity, and the Natural Resources Defense Council, called on Secretary of State John Kerry to consider the cumulative effects of the carbon pollution from all tar sands pipeline proposals, arguing that “looking at individual pipelines proposals in isolation does not meet federal legal requirements.”

The environmental impact statement far from settles the matter. The State Department will now determine if the XL pipeline is in the national interest, a process that involves analysis of the project’s environmental and economic impact. Eight other federal agencies with a finger in the pie — the Departments of Defense, Justice, Interior, Commerce, Transportation, Energy and Homeland Security, and the Environmental Protection Agency — will also get a chance to voice an opinion.

“This report from the Obama administration once again confirms that there is no reason for the White House to continue stalling construction of the Keystone XL Pipeline,” Senate Minority Leader Mitch McConnell (R-Ky.) said. “So, Mr. President, no more stalling– no more excuses. Please pick up that pen you’ve been talking so much about and make this happen. Americans need these jobs.”




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