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The U.S. State Department is about to release its long-awaited report on the Keystone XL oil pipeline, which would connect the Alberta Oil Sands to the gulf of Mexico. If you think it’s time to break out the shovels, this is not the Keystone decision that you think it is.
The environmental impact report says the pipeline won’t greatly boost oil sands or have a significant climate impact, according to congressional aids briefed on the study who spoke to Bloomberg News. It calls for additional safety measures to prevent and deal with spills, but it’s generally being received as a thumbs up for the project. Whether you find yourself disappointed or delighted, the Keystone fight is far from over. Here are three of the biggest hurdles that remain:
Hurdle 1: More Government Reviews
Today’s report will start a 90-day clock for eight U.S. federal agencies to weigh in. That includes the Environmental Protection Agency and the Department of Interior, which have both expressed reservations about the pipeline in the past. It was the EPA’s objections to the State Department’s draft assessment in March that prompted this new report in the first place. If the EPA objects again, it will pressure the final referee, President Barack Obama, to make a tough call.
Hurdle 2: Contractor Controversy
Today’s assessment was conducted by Environmental Resources Management (ERM), a U.K. company that environmentalists later criticized for potential conflicts of interest. The scrutiny is about to get heated.
Two environmental groups, Friends of the Earth and the Checks and Balances Project, accused ERM in July of lying about its ties to TransCanada, the Calgary-based company that wants to build the pipeline. Specifically, they charged that ERM claimed not to have worked with TransCanada for at least three years, when in fact they had worked together more recently on a pipeline project in Alaska.
The allegations are being investigated by the State Department’s Inspector General. In December, 25 members of the U.S. House of Representatives sent a letter to Obama asking for the final impact study to be delayed pending the outcome of that probe. That didn’t happen, but the conflict, if true, could conceivably lead to a do-over, which is not without precedent.
Hurdle 3 (the big one): The President’s Pen
Ultimately, this decision is for Obama to make. The State Department’s assessment is just one of many things he’ll need to consider, including pressure from his political base, public opinion, opinions of other scientific advisors, relations with Canada and energy security.
The Keystone report is a Friday afternoon news dump of Super Bowl proportions. By Sunday, even many Americans who oppose Keystone will be more concerned with the Denver Broncos and the Seattle Seahawks than the Canadian tar sands. Maybe that’s just as well, because the real Keystone decision is yet to come.
By Patrick Rucker and Nia Williams
WASHINGTON/CALGARY (Reuters) – Canada is running out of time to offer U.S. President Barack Obama a climate change concession that might clinch the controversial Keystone XL oil pipeline, as the country’s energy industry continues to resist costly curbs on greenhouse gas emissions.
Two years of negotiations between the Canadian government and the energy sector to curtail carbon pollution have not produced an agreement. Oil producers have balked at anything more than the 10-cents-a-barrel carbon tax imposed by the province of Alberta.
Late last month, Environment Minister Leona Aglukkaq pointed to “good progress” in the talks but was unable to say when a resolution might come.
Concessions from Canada would make the pipeline more palatable in Washington, experts say, since Obama has made fighting climate change a second-term priority and has said that Canada could do more to reduce carbon emissions.
By linking Alberta’s fields to refiners in the Gulf Coast, the 1,200-mile (1,900-kilometer) Keystone XL pipeline would be a boon to an energy patch where oil sands are abundant but lead to more carbon pollution than many other forms of crude.
Keystone’s foes say that burning fossil fuels to wrench oil sands crude from the ground will worsen climate change, and that the $5.4 billion pipeline, which could carry up to 830,000 barrels a day, would only spur more production.
Increasing oil sands production will put Canada on track to miss its target of curbing greenhouse gas emissions by 17 percent below 2005 levels by 2020, according to a government report (full report:tinyurl.com/mgkghtc).
Keystone supporters say that is why Canada would be wise to offer a carbon-trimming plan before the White House decides the pipeline’s fate.
“If Canada were to volunteer new greenhouse gas restrictions, that would certainly help,” David Goldwyn, a former State Department official and energy consultant, told an industry conference in late October.
But the clock is running out. The U.S. State Department is finishing work on a report that will weigh the climate impacts of the pipeline in what could be one of last words before a decision. The White House is expected to rule on Keystone by next spring.
Canada and the United States have often moved together on climate policy, developing similar rules on auto and power-plant emissions while turning their backs on the Kyoto Protocol to limit climate change.
Regulating the oil and gas sector has been thornier, though, with oil sands producers particularly concerned that higher costs will erode their already narrow margins.
“Anything more stringent than today’s system will increase costs, possibly lowering investments and reducing production,” the Canadian Association of Petroleum Producers wrote in a memo to regulators in March that was made public under a freedom of information request.
Canada’s fast-growing oil sands sector will soon exceed the capacity of existing pipelines, and analysts say producers will be forced to rely on trains, barges and other transportation alternatives if Keystone XL and related projects are rejected. Those options are generally costlier and less certain than pipelines.
Nevertheless, industry executives say they doubt yielding on tougher pollution regulations will help secure Keystone.
“I don’t know any policies in Canada with respect to (greenhouse gas) emissions that would have any sort of material impact on the approval process,” Russ Girling, president of TransCanada, the pipeline operator, said last month.
Even if Prime Minister Stephen Harper were to offer new greenhouse gas limits this year, the vagaries of the regulatory process virtually guarantee those plans will not be in place until after a Keystone decision.
Canada needed 12 months to finalize regulations curbing emissions from coal-fired power plants that were ratified last year, and the rules were significantly weaker in the end than originally proposed.
“Judging by what we saw with coal-fired power plants, there is a real risk that a proposal to limit oil and gas emissions could be watered down before it’s final,” said P.J. Partington of the Pembina Institute, a think thank that has opposed oil sands development, which reviewed the industry memos disclosed under the freedom of information request.
(Reporting by Patrick Rucker in Washington and Nia Williams in Calgary; Additional reporting by David Ljunggren in Ottawa; Editing by Douglas
A prominent Democratic fundraiser’s claim that Canada is working with Republicans amidst the U.S. shutdown to get the Keystone XL pipeline project approved is “completely bogus,” says Canada’s ambassador to the U.S.
Gary Doer tells CTV’s Question Period that Canada is working with both U.S. political parties. He dismissed a claim by American billionaire hedge-fund manager Tom Steyer, a vocal opponent of the Keystone project, that Canada lobbied Republicans to add the project’s approval to its list of demands for ending the shutdown.
“We respect the process in the White House with the president’s authority on presidential permits, we respect the technical work that is done at the State Department, which has really pointed to the advantages of moving ahead with this pipeline,” said Doer….
- Ottawa using U.S. government shutdown to advance campaign for Keystone XL pipeline (thestar.com)
- Anti-Keystone billionaire takes aim at Harper’s hard line on pipeline, links it to U.S. shutdown (ctvnews.ca)
- Anti-Keystone billionaire accuses Harper of involvement in US government shutdown (mining.com)
- Joe Oliver makes energy sales pitch in Washington (cbc.ca)
- As Keystone battle drags on, the oil market is moving on without it by adding rail capacity and other new pipelines at an increased cost, and greater risk and environmental impact (aei-ideas.org)
- Tom Steyer’s NextGen Climate Action Premieres First in “Keystone Chronicles” Ad Series (sys-con.com)
- Harper offers Obama emissions deal to win Keystone: CBC (reuters.com)
- New Report Confirms Keystone Pipeline Won’t Increase Emissions (blogs.the-american-interest.com)
- Canadian minister says Obama Keystone XL blackmail may be working (junkscience.com)
- Keystone: It’s going well (macleans.ca)
- Canada’s Harper insists Keystone XL is important for jobs (reuters.com)
- How America’s quiet environmental revolution threatens Canada (vancouversun.com)
- Canada’s conservative Prime Minister slams Obama’s statements on Keystone XL gas pipeline (rawstory.com)
- Pipeline Wars Seen Spreading After Fight on Keystone XL – Bloomberg (bloomberg.com)
- Law enforcement tuning in to Keystone XL tension (journalstar.com)
- Keystone XL Pipeline Could Cost $100 Billion Per Year in Health and Environmental Damages (indybay.org)
- Eminent Domain Scaremongering: Keystone XL opponents claim TransCanada tells Nebraska landowners property will be taken ‘without significant compensation’ (junkscience.com)
- Trial lawyers line up against Keystone XL (junkscience.com)