By Meagan Clark - The State Department’s environmental assessment for the proposed Keystone XL pipeline underestimates the pipeline’s potential impact on oil production from Canada’s tar sands and the amount of carbon emissions production may cause, according to a report released Monday from the U.K.-based environmental group Carbon Tracker Initiative.
Carbon Tracker, a non-profit that studies how carbon budgets interact with financial markets, argues that the State Department mistakenly assumed that climate change wouldn’t be a priority and that therefore oil demand and prices would be high enough to ensure profitable production from the oil sands.
At the end of January, the State Department issued its final environmental impact statement (FEIS) on the pipeline project, concluding that President Obama’s approval or denial of any specific project to transport oil “remains unlikely to significantly impact the rate of extraction in the oil sands, or the continued demand for heavy crude oil at refineries in the United States.”
“Significance, as many have said, is in the eye of the beholder,” Carbon Tracker’s report states.
Carbon emissions from extracting in Canada’s oil sands, one of the world’s largest sources of unconventional oil in the world, add up to 3.9 percent of the global carbon budget set by the United Nations to counter climate change, while carbon emissions from potential production enabled by the Keystone XL pipeline would account for about 0.5 percent of that budget.
“The U.S. President has to decide if just one single pipeline that could use up 0.5 percent of the total remaining 2°C global carbon budget is indeed significant,” Carbon Tracker’s report states.
Carbon Tracker argues that the Obama administration should provide a “significance test” that is measurable for each project proposed, including the Keystone XL pipeline.
“Otherwise any and all projects can pass the significance test regardless of carbon emissions and climate forcing impact,” Carbon Tracker said.
The group expressed frustration at what it called a lack of transparency in the State Department, making it difficult to examine how the agency derived its data from some models. The State Department has adopted some of Carbon Tracker's methodology in its environmental impact statements and come to different conclusions than Carbon Tracker.
In addition, the group argues that alternative transport for crude, particularly rail, is far from certain, a key premise the State Department opposed to conclude the pipeline would not significantly impact carbon emissions. The State Department report concluded that oil industry players would ship crude by rail or other means if the Keystone XL pipeline was denied, which would mean carbon emissions would remain about the same with or without the pipeline.
Carbon Tracker says the price of oil would have to be higher to make shipping by rail cost effective, and the State Department failed to consider this option.