By Timothy Gardner
WASHINGTON, March 1 The Keystone XL oil pipeline
got a boost on Friday when the U.S. State Department said the
project would not likely change the rate at which Canada's oil
sands are developed, discounting warnings from environmentalists
that it would lead to a spike in greenhouse gas emissions.
The report is far from the last word on Keystone. The
environmental assessment must be finalized after the public
comment. Federal agencies will then have 90 days to work with
the State Department to determine whether the pipeline is in the
national interest, with U.S. President Barack Obama ultimately
able to approve or block the project.
TransCanada Corp's proposed project is "unlikely to
have a substantial impact" on development of Alberta's oil
sands, the world's third-richest oil deposit, the State
Department said in a long-awaited report of more than 2,000
pages. It said the pipeline would result in "no substantial
change in global greenhouse gas emissions."
The more than 800,000 barrel per day pipeline would have
little environmental impact on most resources along its proposed
route, provided the company takes certain measures to make it
safer, the review added.
Supporters of the project, which would bring oil to Texas
refineries, have dismissed concerns it would lead to additional
greenhouse gas emissions, saying the oil would reach markets
regardless of whether the pipeline is built.
Obama rejected the pipeline in 2011 on concerns about its
route through ecologically sensitive regions of Nebraska and
after several high-profile spills on lines carrying Canadian
Subsequently, TransCanada issued a new route for the
pipeline, which Friday's assessment took into consideration.
PUBLIC TO SHAPE DEBATE
The State Department stressed that the report did not judge
the project. The public will have 45 days to comment during a
review starting next Friday. A final decision by the Obama
administration that has been pending for more than 4-1/2 years
is not expected until July or August.
TransCanada's chief executive, Russ Girling, said that
construction of the pipeline could be complete by late 2014 or
early 2105 if a final decision by the Obama administration comes
Kerri-Ann Jones, assistant secretary of the State
Department, repeatedly refused to address whether the report
offered support for building the pipeline, telling reporters on
a press call that it would be premature to draw conclusions from
the environmental assessment.
"We're really looking for the public debate at this point,"
Jones said. "We're looking for the feedback from the public to
help us shape this going forward."
ClearView Energy Partners, an energy consulting firm, said
the draft review signals that the administration may be
preparing to argue that the construction of Keystone will not
play a major role in climate change.
"Today's SEIS could be an indication that the White House is
trending towards approval," ClearView said in a research note,
although the group warned the administration may not be fully
committed to that decision yet.
Many environmentalists oppose the project because, from
wells to wheels, oil sands are more carbon-intensive than
average crudes refined in the United States. They had been
cheered by recent strong speeches by Obama and Secretary of
State John Kerry on the need to take action on climate change.
One of Keystone's top critics said Friday's review was
little different from a U.S. assessment in 2011.
"We're hearing the same rehashed arguments from the State
Department about why a great threat to the climate is not a
threat at all," said Bill McKibben, the founder of 350.org, an
"Mother Nature filed her comments last year - the hottest
year in American history; the top climate scientists in the U.S.
have already chimed in. The rest of us have 45 days to make our
voices heard, and we will," said McKibben, who has led protests
at the White House.
Environmentalists have also raised concerns that oil sands
are more corrosive and toxic than other forms of oil, which
could lead to spills that threaten water supplies.
Supporters of Keystone say it would provide thousands of
jobs, drain a glut of domestic crude oil from the North Dakota
oil boom and strengthen North American energy security.
"The Keystone XL pipeline will make more Canadian and U.S.
oil available to us - oil that will not need to be imported from
unfriendly places," said Karen Harbert, president of the U.S.
Chamber of Commerce's Institute for 21st Century Energy.
Construction of the pipeline would support 42,100 jobs
across the United States, directly and indirectly, the review
said. The operation of the pipeline would result in 35 to 50
permanent jobs, it added.
Canadian politicians and industry have ratcheted up lobbying
in support of Keystone. The stakes have risen for the Canadian
pipeline supporters as prices for oil sands crude have slumped,
partly due to limited capacity to export the oil.
Ottawa has warned that the oil price discount is taking a
toll on Canada's national economy. Unidentified members of Prime
Minister Stephen Harper's government told the Globe and Mail
newspaper this week that a rejection of Keystone XL by Obama
would seriously damage Canadian-United States relations.
TransCanada's Girling said there are now 12,000 pages of
documents on the project, including the latest review, and that
no stone has been left unturned in terms of environmental or
"I believe this is a very good day for the Keystone project.
It's just moved one step closer to approval," Girling said.
The southern half of the pipeline, from Texas to Oklahoma,
is more than halfway built. Approval from the State Department
was not needed because it does not cross the national border.
U.S. Senator John Hoeven, a Republican from North Dakota,
said after four environmental reviews, the administration needs
to make a decision on the project.
"While we welcome a finding of no significant impact, yet
another indeterminate delay runs counter to both public opinion
and reasonable due diligence," said Hoeven, who has crafted
legislation that would allow Congress to approve the pipeline.
The pipeline would also move oil from his state, where
shale oil production is booming.