US study gives boost to Keystone oil pipeline

State Department concludes controversial pipeline from Canada will not cause “substantial change” in carbon emissions.

Keystone protest
Environmental groups have held numerous protests at the White House urging Obama to reject the pipeline [Reuters]

The US State Department said on Friday that the Keystone XL oil pipeline would not likely change the rate at which Canada’s oil sands are developed, a boost for a project which environmentalists warn would lead to a spike in greenhouse gas emissions.

TransCanada Corp’s proposed project is “unlikely to have a substantial impact” on development of Alberta’s oil sands, the world’s third-richest oil deposit, the State Department said in a long-awaited report of more than 2,000 pages. It said the pipeline would result in “no substantial change in global greenhouse gas emissions.”

The more than 800,000 barrel-per-day pipeline would have little environmental impact on most resources along its proposed route, provided the company takes certain measures to make it safer, the review added.

Supporters of the project, which would bring oil to Texas refineries, have dismissed concerns it would lead to additional greenhouse gas emissions, saying the oil would reach markets regardless of whether the pipeline is built. 

Obama rejected the pipeline in 2011 on concerns about its route through ecologically sensitive regions of Nebraska and after several high-profile spills on lines carrying Canadian crude.

TransCanada then issued a new route for the pipeline, which Friday’s assessment took into consideration.

‘Rehashed arguments’

The State Department stressed that the report did not judge the project. The public will have 45 days to comment during a review starting next Friday. A final decision by the Obama administration, which has been pending for more than four-and-a-half years, is not expected until July or August. 

TransCanada’s chief executive, Russ Girling, said that construction of the pipeline could be complete by late 2014 or early 2105 if a final decision by the Obama administration comes by midsummer. 

Kerri-Ann Jones, assistant secretary of the State Department, repeatedly refused to address whether the report offered support for building the pipeline, telling reporters on a press call that it would be premature to draw conclusions from the environmental assessment.

“We’re really looking for the public debate at this point,” Jones said. “We’re looking for the feedback from the public to help us shape this going forward.”

Many environmentalists oppose the project because oil sands are more carbon-intensive than average crudes refined in the United States. They had been cheered by recent strong speeches by Obama and secretary of state John Kerry on the need to take action on climate change.

One of Keystone’s top critics said Friday’s review was little different from a U.S. assessment in 2011. 

“We’re hearing the same rehashed arguments from the State Department about why a great threat to the climate is not a threat at all,” said Bill McKibben, the founder of, an environmental group.

“Mother Nature filed her comments last year – the hottest year in American history; the top climate scientists in the US have already chimed in,” he added.

US-Canada relations

Environmentalists have also raised concerns that oil sands are more corrosive and toxic than other forms of oil, which could lead to spills that threaten water supplies.

Supporters of Keystone say it would provide thousands of jobs, drain a glut of domestic crude oil from the North Dakota oil boom and strengthen North American energy security.

“The Keystone XL pipeline will make more Canadian and US oil available to us – oil that will not need to be imported from unfriendly places,” said Karen Harbert, president of the US Chamber of Commerce’s Institute for 21st Century Energy.

Canadian politicians and industry have ratcheted up lobbying in support of Keystone. The stakes have risen for the Canadian pipeline supporters as prices for oil sands crude have slumped, partly due to limited capacity to export the oil.

Ottawa has warned that the oil price discount is taking a toll on Canada’s national economy. Unidentified members of prime minister Stephen Harper’s government told the Globe and Mail newspaper this week that a rejection of Keystone XL by Obama would seriously damage Canadian-United States relations.

Source: Reuters