President Barack Obama has put a price-tag on his approval of TransCanada’s Keystone XL pipeline — no significant increase in United States greenhouse gas emissions, GHGs.
About halfway through his speech June 25 to lay out a sweeping plan to fight climate change, he said the pipeline’s fate will be clear proof that the project will “be in our nation’s interest.”
“And our national interest will be served only if this project does not significantly exacerbate the problem of carbon pollution. 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.”
When Obama will deliver his final verdict remains vague, although the administration has previously hinted and TransCanada has expected a result sometime around mid-year.
In setting out mandatory reductions in GHGs for operators of power plants, the biggest single source of carbon emissions in the United States, Obama said his strategy “does not mean we are going to suddenly stop producing fossil fuels.”
“But our energy strategy must be about more than just producing more oil. And, by the way, it’s certainly got to be more than just building one pipeline,” Obama said.
“I know there has been, for example, a lot of controversy around the proposal to build (Keystone XL). That would carry oil from the Canadian tar sands down to refineries in the Gulf and the State Department is going through the final stages of evaluating the proposal. That’s how it has always been done.”
It was the first time in months that Obama has made a direct reference to Keystone XL and the first time he had used the term “tar sands,” favored by critics and seen by the industry and the Alberta and Canadian governments as less accurate and more pejorative than “oil sands.”
Oliver: standards could be met
Canada’s Natural Resources Minister Joe Oliver quickly seized on the conditions set by Obama, suggesting the US$7.6 billion Keystone XL could easily meet those standards.
“We agree with President Obama’s State Department Report in 2013 which found that, ‘approval or denial of the proposed project 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,’” he said.
Oliver has repeatedly noted that GHGs from the oil sands are 0.1 percent or one-thousandth of global emissions, or less than half the emissions from coal-fired power plants in Illinois and just one-fortieth of all coal emissions in the United States.
He has said that Canada will reduce the GHGs from oil sands even further through upcoming new regulations targeted specifically at the oil and gas industry, while Alberta is on the verge of further tightening its own carbon taxes on oil sands operators.
Oliver, noting that Keystone XL has been the “most studied pipeline in the history of the world,” said the 3,500-page State Department report was the “second major independent comprehensive study” the department had conducted on the pipeline.
Alberta International and Intergovernmental Relations Minister Cal Dallas said the province welcomed Obama’s new climate change policy.
“Americans should feel confident that Alberta is the safest, most secure and responsible energy supplier to the United States,” he said.
The Calgary-based Pembina Institute, an environmental think-tank, lauded Obama’s conditions, describing them as a “measured and cautious approach.”
“Our analysis shows that filling the proposal pipeline with oil sands bitumen would require a 36 percent increase in production from today’s levels. In terms of Canada’s greenhouse gas emissions, that’s the equivalent of adding more than 4 million cars to the road.”
TransCanada pleased
TransCanada Chief Executive Officer Russ Girling said he was pleased with Obama’s remarks because “the almost five-year review of the project has already repeatedly found that these criteria are satisfied.”
“These review have found that, from a global perspective, the decisions whether to build the proposed project would be unlikely to substantially affect the rate of extraction or combustion of Canadian oil sands crude and its global impact,” he said.
Girling said the alternative would be far worse if oil had to move by truck, rail and tanker which would “significantly add to global greenhouse gas emissions.”
Gary Doer, Canada’s ambassador to the United States, said he agreed with the State Department`s finding in March that blocking Keystone XL would not stop production of oil sands bitumen.
“Oil will get to market. It gets to market with pipelines. It will get to market by trains. It will get there by trucks. It will get to India, it will get to China and it will continue to have the opportunity to go to U.S. refineries, which create a lot of jobs for the United States for the manufacturing sector on the manufacturing sector on the U.S. Gulf Coast,” he said.
Doer said Canadian officials are driving home the point that the oil will be developed regardless of the U.S. decision and Keystone presents the opportunity to transport bitumen and release less carbon dioxide that any other delivery method.
—Gary Park
