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Route Change Forces Keystone Foes to Shift Focus

Photographer: Daniel Acker/Bloomberg

A worker carries a torch after heating a pipe joint during construction of the Gulf Coast Project pipeline in Atoka, Oklahoma, U.S., on Monday, March 11, 2013. The Gulf Coast Project, a 485-mile crude oil pipeline being constructed by TransCanada Corp., is part of the Keystone XL Pipeline Project and will run from Cushing, Oklahoma to Nederland, Texas. Close

A worker carries a torch after heating a pipe joint during construction of the Gulf... Read More

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Photographer: Daniel Acker/Bloomberg

A worker carries a torch after heating a pipe joint during construction of the Gulf Coast Project pipeline in Atoka, Oklahoma, U.S., on Monday, March 11, 2013. The Gulf Coast Project, a 485-mile crude oil pipeline being constructed by TransCanada Corp., is part of the Keystone XL Pipeline Project and will run from Cushing, Oklahoma to Nederland, Texas.

Opponents of the Keystone XL pipeline used to have a simple argument: the project would endanger Nebraska’s delicate Sand Hills region, a vast network of dunes and wetlands that have been designated a National Natural Landmark.

State leaders, including Republican Governor David Heineman, opposed the project on those grounds. President Barack Obama cited the threat to water in the state before denying TransCanada Corp (TRP). a permit last year to build the pipeline, which would carry Canadian tar sands oil to refineries on the U.S. Gulf Coast.

Then TransCanada offered a new route that largely avoids the Sand Hills and won the support of Heineman. While oil spills remain a concern, environmental groups opposed to the pipeline have shifted their emphasis to the more complex charge that mining Canadian tar sands will result in more greenhouse gases and exacerbate global warming.

“The initial opposition was framed heavily in terms of its impact on water and the risks to the aquifer,” Phil Sharp, a former Democratic House member from Indiana and president of Resources for the Future, a Washington-based research group, said in an interview. “They kind of downplayed the greenhouse gas issue. Now I think they’re coming up short in the public argument because there either isn’t the public foundation on this issue or the same intensity of interest.”

Bill Approved

Lobbying on both sides of the debate has picked up in advance of a decision expected in coming months from the U.S. State Department, which has jurisdiction over the $5.3 billion project because it would cross an international border. The agency scheduled a hearing for tomorrow in Nebraska where opponents and supporters are expected to appear.

Last month, 17 Democrats joined every Senate Republican in support of a non-binding resolution endorsing Keystone XL. The House Energy and Commerce Committee today voted 30-18 to approve and send to the full House a bill sponsored by Representative Lee Terry, a Nebraska Republican, that would allow the pipeline to be built without the administration’s approval. Obama has said he would veto the measure.

Yesterday, groups fighting Keystone released research they said showed it would increase greenhouse-gas emissions by 181 million metric tons. That is equal to the emissions from 46 coal plants and 34 million vehicles, under estimates used by the Environmental Protection Agency. James Hansen, the former U.S. space agency scientist who has been urging policymakers to combat global warming since the 1980s, said building Keystone will mean its “game over for the climate.”

‘Uphill Fight’

“The public is beginning to understand that greenhouse gas emissions are bad for the climate and that there’s a lot that’s going to be released by mining the tar sands,” Erich Pica, president of Friends of the Earth in Washington, said in an interview. “This has always been an uphill fight.”

Refiners say failure to approve the pipeline may actually increase greenhouse gas emissions. Transportation costs associated with U.S. imports of crude from the Middle East and other nations, as well as Canadian exports to Asia, could result in more emissions, according to the American Fuel & Petrochemical Manufacturers, a Washington-based group whose members include Exxon Mobil Corp (XOM). of Irving, Texas, and Valero Energy Corp. (VLO) of San Antonio.

Environmental groups maintain that concerns over climate change have always been part of the attack on Keystone XL.

Hurricane Sandy

Recent extreme weather events such as Hurricane Sandy in October and Obama’s decision to highlight the dangers of climate change in speeches earlier this year have helped galvanize opposition, according to Amy Atwood, senior attorney with the Center for Biological Diversity.

“We’re trying to appeal to a Democratic president who gave a State of the Union address where he said that climate change is a big problem,” Atwood said in an interview. “This is the moment in history where we have a small diminishing chance to reverse the trend toward catastrophic climate change.”

The State Department hasn’t helped on that score. On March 1, it issued an updated environmental assessment that concluded the project would have minimal impact on climate change because the oil would find its way to market with or without the pipeline.

Longer Route

Approval or denial “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 area,” according to the assessment.

An earlier assessment by the agency, released in 2010, raised concerns about the Sand Hills. The one released last month noted the change in the route adds 21 miles to avoid sensitive areas such as the Sand Hills.

Obama raised the risks to the Nebraska aquifer, which supplies 80 percent of the state’s drinking water, late in 2011, months before denying a permit for the project. TransCanada re- submitted its application in 2012 with a new route that avoids much of the environmentally sensitive Sand Hills region where groundwater is closer to the surface.

“You had in one sense a states’ issue,” Sharp said. “The breadth of the coalition opposing has been reduced among the broad public.”

Residents Opposed

Tackling climate change by curbing the supply of the oil sands reflects a change in tactics by environmentalists who spent the first two years of the Obama administration pushing for a cap on carbon emissions. Those efforts failed and now groups such as the Sierra Club and Environmental Defense Fund say it’s unlikely Congress will enact any large-scale climate legislation soon.

That leaves environmentalists grasping for policies that would prevent mining or drilling for new fossil fuels. They are fighting federal leases for coal mines in Wyoming, liquid natural gas export facilities and the Keystone XL oil pipeline.

Instead of fighting the oil sands, environmentalists should focus on cutting demand for coal and oil, according to Michael Levi, a fellow at the Council of Foreign Relations in New York and author of the forthcoming book The Power Surge.

If demand for oil in the U.S. is cut prices will fall and companies will be less likely to invest in oil sands, Levi said.

“The oil sands, in a way, should be the consequences, not cause, of our policy,” he said.

To contact the reporter on this story: Jim Efstathiou Jr. in New York at jefstathiou@bloomberg.net

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

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