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Green Groups Launch Fresh Attack Against Keystone XL Pipeline Green Groups Launch Fresh Attack Against Keystone XL Pipeline Green Groups Launch Fresh Attack Against Keystone XL Pipeline Green Groups Launch Fresh...

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Green Groups Launch Fresh Attack Against Keystone XL Pipeline

Environmentalists are putting fresh pressure on the State Department to scuttle the Keystone XL pipeline.(MARK RALSTON/AFP/Getty Images)

December 9, 2013

Green groups battling the proposed Keystone XL oil-sands pipeline are making their case to a senior State Department official on Monday as the department prepares to finalize its environmental review of the project.

The environmental groups have a meeting late Monday morning with Kerri-Ann Jones, State's assistant secretary for oceans and international environmental and scientific affairs.

Representatives with groups--including the Natural Resources Defense Council, the Sierra Club, and expected to argue that the production growth of carbon-intensive oil sands will be constrained unless Keystone is approved. Environmentalists are making some of their closing arguments as they press State to walk back a draft analysis released in March, which found that approving or rejecting TransCanada's project would have little effect on the production growth of oil sands.


State is believed to be close to finalizing the draft report. If it upholds the finding that Keystone isn't make-or-break for oil-sands production, it would send a strong signal that the White House will green-light the project. President Obama has said he won't approve the pipeline unless he's convinced it won't significantly worsen carbon emissions.

Sources familiar with the meeting say that environmentalists plan to highlight, among other arguments, recent reports that suggest production won't proceed as fast without major new pipeline capacity out of Alberta.

Oil-sands producers, meanwhile, are increasingly turning to rail cars to move their product to refineries. But green groups say an International Energy Agency report in November provided new evidence that rail can't accommodate all the planned growth.

IEA projects that oil-sands production will grow from 1.8 million barrels per day in 2012 to 4.3 million barrels in 2035, but only if there's enough pipeline capacity.

"While the resources are unquestionably large enough to support such an expansion, achieving it is contingent on the construction of major new pipelines to enable the crude to be exported to Asia and the United States. Two pipelines from the oil sands in Alberta to the Pacific Coast have been proposed--the 530-kbd Northern Gateway line to Kitimat and the expansion, from 300 kbd to 890 kbd, of the Trans Mountain line to Vancouver--as well as the Keystone XL line to the United States," says IEA's World Energy Outlook.

It also finds that production could be higher if controversies surrounding major pipeline proposals are "resolved quickly."

Environmentalists are expected to flag other analyses as well, including a September RBC Capital Markets report that, according to several press accounts, finds that as much as 300,000 barrels per day in the production capacity of oil sands could be delayed absent Keystone's construction. But backers of TransCanada's proposed pipeline say crude produced from the oil sands will get to market with or without Keystone.

"We have sufficient capacity to move all of our production today, and we believe we have all the capacity that will require to move it in the near and the long term," said Kris Smith, an executive vice president with Canadian oil giant Suncor, in a presentation to investors last week posted online by the financial website Seeking Alpha.


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