Keystone Pipeline Saga Still Has Several More Chapters

View of the Syncrude oil sands extraction facility near the town of Fort McMurray in Alberta Province, Canada on October 25, 2009. Greenpeace is calling for an end to oil sands mining in the region due to their greenhouse gas emissions and have recently staged sit-ins which briefly halted production at several mines. At an estimated 175 billion barrels, Alberta's oil sands are the second largest oil reserve in the world behind Saudi Arabia, but they were neglected for years, except by local companies, because of high extraction costs. Since 2000, skyrocketing crude oil prices and improved extraction methods have made exploitation more economical, and have lured several multinational oil companies to mine the sands.  
National Journal
Amy Harder
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Amy Harder
Nov. 25, 2013, 12:56 p.m.

Settle back into your seat and get comfortable, because the next rounds in the Keystone XL pipeline fight are going to require digging into documents spanning thousands of pages, or at least waiting until someone else does it for you.

The next two steps in the protracted regulatory review process will be the State Department’s release of two documents: the final environmental impact statement and a related inspector general’s report. The IG for State has been investigating whether any conflict of interest exists between the company that did the administration’s environmental review and TransCanada, the company seeking to build the cross-border pipeline from Alberta to Texas.

Once those two documents are released — expected sometime in the next three months — other federal agencies will conduct nearly four more months of review before the administration makes a final decision on the permit. That means the Keystone XL saga isn’t poised to end until the middle part of 2014.

In September 2008, TransCanada first submitted its application to the State Department to build the 1,700-mile pipeline, which would send more than 700,000 barrels of heavy oil from Alberta to the Gulf Coast. You might recall that TransCanada is actually in the middle of the second regulatory review process, since President Obama rejected the company’s first application in the face of the GOP-imposed deadline in early 2012.

The southern leg of the pipeline spanning 500 miles is almost complete, because it doesn’t require a presidential permit. The part still pending for approval is runs about 875 miles from the U.S. border with Canada to Nebraska.

The State Department is overdue in releasing its final environmental review, which it had initially projected would be released in early fall. While administrations have a habit of releasing controversial news around holidays and Fridays, a State Department official confirmed Monday its final environmental review is not coming this week. We should all be thankful for that.

When it does come, it will mean a lot in terms of what direction the administration is leaning for its final decision. The document will be massive and the small parts that matter most will be buried. Specifically, you should look for how the review evaluates the pipeline’s projected impact (or lack thereof) on global warming based on the marker the president put down in his speech in June.

“Our national interest will be served only if this project does not significantly exacerbate the problem of carbon pollution,” Obama said on a steamy summer day at Georgetown University. “The net effects of the pipeline’s impact on our climate will absolutely be critical to determining whether this project is allowed to go forward.”

His speech shifted the pipeline debate from one about economics and environmental risks squarely into global-warming territory.

“It’s all about the impact on climate,” said Bill Burton, a former communications aide to Obama who is now advising the League of Conservation Voters, which is opposing the pipeline. “And if we see they make a judgment call about whether or not oil will still come out of the ground with or without the pipeline.”

To translate Obama’s line in the climate sand into a technical review document, you need to get wonky.

“The thing that matters most is the word ‘additionality,’ ” said Kevin Book, managing director at ClearView Energy Partners, a Washington-based nonpartisan analysis firm. “Additionality” isn’t actually a word but a jargon term used among climate experts to explain how many more carbon emissions a project adds relative to the status quo.

The draft environmental review the State Department released in March found that Keystone would indirectly add up to 830,000 metric tons of carbon dioxide a year — which is a tiny amount compared to the 32 billion metric tons of global carbon emissions from the entire energy sector overall — by helping enable Canada’s oil-sands development. Because of this relative small figure compared to the overall amount of carbon, the review concluded that Keystone “is unlikely to have a substantial impact on the rate of development in the oil sands, or on the amount of heavy crude oil refined in the Gulf Coast region.” This particular line made environmentalists worry the draft review was a sign the administration was going to green-light the project.

If the 830,000 figure is much higher, it could indicate the administration is leaning less toward a final answer of yes than it was before. If it’s lower or about the same, it’s a sign the administration is headed toward yes, still.

The State’s Department’s initial environmental review, released all the way back in summer 2011, came to a similar conclusion: ” “¦ the overall contribution to cumulative [greenhouse-gas] impacts from proposed Project construction and operation would not constitute a substantive contribution to the U.S. or global emissions.”

Other than the final environmental review, you need to watch for the inspector general’s report, which is investigating Environmental Resource Management’s ties to TransCanada in response to pressure from environmental groups. The IG has said it will release its report early next year, likely in February, which means any final decision on the pipeline probably won’t come until after that. If the report does find concrete evidence of a conflict-of-interest, then this regulatory process could start all over for a third time.

Book ultimately predicts Obama will approve the pipeline even it takes more time.

“If you’re going to deny the pipeline, it could have been done already,” Book said. “It takes longer to say yes than no. You need to dot your “i’s” and cross your “t’s” to say yes and protect yourself from legal challenges.”

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