Keystone Review Meaningless Without Climate Assessment

Environmental groups argue that oil-sands production would slow without Keystone because producers would lack the infrastructure to carry the fuel to markets in the U.S. or Asia. Photo: Andrew Harrer/Bloomberg Close

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Environmental groups argue that oil-sands production would slow without Keystone because producers would lack the infrastructure to carry the fuel to markets in the U.S. or Asia. Photo: Andrew Harrer/Bloomberg

The U.S. environmental assessment of a new Keystone XL pipeline route from Canada will be meaningless unless it considers the effect mining of oil sands has on climate change, opponents of the project said.

The State Department may release within days the updated review of the path from Alberta to the Gulf Coast proposed by TransCanada Corp. (TRP) President Barack Obama rejected a route that crossed an aquifer in Nebraska. Environmentalists say producing oil from Alberta’s tar sands releases more carbon dioxide than conventional drilling, worsening global warming.

The review will be “a meaningless document unless it includes a serious review of the very serious climate impacts of the tar sands development the pipeline will trigger,” Trey Pollard, a spokesman for the Sierra Club, said in a statement.

While a final decision is probably months away, the analysis will be the administration’s first word on the revised route. Environmental groups view the decision as a sign of how Obama may weigh global-warming risks with energy development in his second term.

“We want to see an analysis that follows through on the president’s promise to examine all the impacts of the Keystone pipeline and growing dependence on dirty tar sands,” Jeremy Symons, a vice president at the Reston, Virginia-based National Wildlife Federation, said in an interview. The group said yesterday the analysis may be released before Christmas.

Pending Decision

White House and State Department officials each said climate change would be considered in the final decision on Keystone. The department, which has authority over Keystone because it crosses an international border, plans to issue a final decision on the route in the first quarter next year.

Alex Pourbaix, TransCanada’s president for energy and oil pipelines, said he didn’t expect the State Department to make significant changes to how it views Keystone’s impact on climate change in its latest analysis.

“The view was that the oil sands were going to be developed regardless of whether Keystone was built,” Pourbaix said in an interview in Toronto. “I don’t think that issue has changed at all.”

Obama rejected the original route proposed by Calgary-based TransCanada amid concerns that spills would endanger the Ogallala aquifer under the permeable Sand Hills region in Nebraska, one of six states Keystone will cross.

Moving East

TransCanada’s revised application proposes pushing the pipeline further east in Nebraska, avoiding most of the Sand Hills, said Brian McManus, a spokesman for the Nebraska Department of Environmental Quality, in an interview. The department held a hearing on Dec. 4 to gather public comment on a draft of its report on the pipeline route.

The Nebraska agency is writing a separate analysis that may be completed this month or in January. Governor Dave Heineman, a Republican, has 30 days to send his recommendations to the State Department.

Pipeline backers say Keystone will create thousands of jobs and reduce the need for the U.S. to import oil from less friendly countries. Republicans have criticized Obama for denying TransCanada’s original application.

Obama should “give it a green light as soon as possible,” Cindy Schild, a senior operations manager for the Washington- based American Petroleum Institute, told reporters on a conference call this month.

Crude Production

The State Department’s final environmental assessment of the original Keystone route said the project was “not likely to impact the amount of crude oil produced from the oil sands.” Canada would find other buyers if the U.S. balked at approving the pipeline.

The analysis concluded U.S. emissions would be lower without the project because tar sands oil would displace crude produced by processes that release less carbon dioxide.

Environmental groups argue that oil-sands production would slow without Keystone because producers would lack the infrastructure to carry the fuel to markets in the U.S. or Asia.

“This pipeline locks in decades of the dirtiest fuel on the planet, and acknowledging this fact puts the pipeline squarely at odds with President Obama’s commitment to tackle climate change,” Symons said in an e-mail.

To contact the reporters on this story: Jim Snyder in Washington at jsnyder24@bloomberg.net; Rebecca Penty in Calgary at rpenty@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net

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