Keystone Foe Steyer Brings Fight to Site of Obama Pledge

Photographer: Doug Mills/The New York Times via Redux

Protesters opposed to the Keystone XL oil pipeline greet President Barack Obama's motorcade as he tours the port in New Orleans, Nov. 8, 2013. Close

Protesters opposed to the Keystone XL oil pipeline greet President Barack Obama's... Read More

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Photographer: Doug Mills/The New York Times via Redux

Protesters opposed to the Keystone XL oil pipeline greet President Barack Obama's motorcade as he tours the port in New Orleans, Nov. 8, 2013.

As the U.S. prepares to release an environmental review of the proposed Keystone XL pipeline, opponents are arguing that the project can’t meet a standard for carbon emissions that President Barack Obama set in June.

The opponents made their case yesterday during a conference at Georgetown University in Washington, where earlier this year Obama declared he wouldn’t back the project if it were found to significantly increase carbon-dioxide emissions, which many scientists have linked to global warming. The event was sponsored by NextGen Climate Action, a group funded by billionaire investor and pipeline foe Tom Steyer.

The State Department, which is overseeing the environmental impact report on TransCanada Corp.’s $5.4 billion pipeline, hasn’t said when it will be completed other than to say it would be after the release of public comments, a process that was completed in September.

“I think what people don’t understand is the magnitude of the asset and the magnitude of the production increases” that would follow Keystone’s approval, Steyer, who has spent some of his fortune fighting Keystone and backing the campaigns of Democrats including Obama, said in an interview. “Once it’s built, it will enable this thing to run for decades.”

Photographer: Julia Schmalz/Bloomberg

In discussing the Keystone XL pipeline, billionaire investor Tom Steyer said that "foreign countries will get more access to more oil to make more products to sell back to us, undercutting our economy." Close

In discussing the Keystone XL pipeline, billionaire investor Tom Steyer said that... Read More

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Photographer: Julia Schmalz/Bloomberg

In discussing the Keystone XL pipeline, billionaire investor Tom Steyer said that "foreign countries will get more access to more oil to make more products to sell back to us, undercutting our economy."

Obama said in his June speech at Georgetown that “the net effects of the pipeline’s impact on our climate will be absolutely critical to determining whether this project is allowed to go forward.”

Initial Rejection

TransCanada, based in Calgary, first proposed the link between Alberta’s oil sands and refineries in the U.S. Gulf Coast more than five years ago. Obama rejected the original application after Nebraska state officials raised environmental concerns, though construction on its southern leg is almost complete. The State Department is now reviewing a line that runs farther east in the state before linking to an existing pipeline network at Steele City, Nebraska.

The company said yesterday the pipeline “will have very little impact on all of the resources along the entire pipeline route.” Keystone XL will create thousands of construction jobs and improve U.S. energy security by reducing reliance on oil imports from countries that aren’t as close an ally as Canada, TransCanada said in a statement.

“Despite what the professional opponents of Keystone XL claim, this is not about oil versus the environment,” saidthe company, which was invited to yesterday’s meeting but declined to attend, calling it a “political” event.

The pipeline has become a flashpoint in the debate over climate change because the production and mining of Alberta’s oil sands release more carbon dioxide than the extraction of conventional forms of oil.

Draft Report

A draft environmental analysis by the State Department, which oversees the Keystone application because the pipeline would cross an international border, found that the project wouldn’t have much of an impact on the climate because the oil sands would be developed anyway and moved to market by rail.

The U.S. Environmental Protection Agency, which is advising the State Department as it completes the environmental review, called for a fuller market analysis.

Speakers at yesterday’s conference hosted by Sacramento, California-based NextGen included academics and clean-energy advocates who challenged the State Department’s findings on the project’s impact on climate change.

Steyer, the founder of Farallon Capital Management LLC, said Keystone’s completion would probably lead oil companies to increase production because the pipeline would give them an opportunity to get a better price for their product.

Oil Economics

Canadian crude now trades at a discount to West Texas Intermediate, a U.S. benchmark price. Steyer said that with Keystone, the economics of the oil sands will be improved, generating new investment and production.

Steyer said in September that he would spend $1 million on an ad campaign against the project. His pledge came after Obama spoke at a $5,000-per-person fundraiser for House Democrats hosted by Steyer at his San Francisco home in April.

“The truth of the matter is this is the fight which is going to be perceived accurately as a measure of which way this administration is going,” Steyer said yesterday.

To contact the reporter on this story: Jim Snyder in Washington at jsnyder24@bloomberg.net

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

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