| WASHINGTON, April 22
WASHINGTON, April 22 The U.S. environment
regulator on Monday said the State Department must take a harder
look at climate and other impacts of the Canada-to-Texas
Keystone XL oil sands pipeline before the Obama administration
issues a final decision on the project.
The Environmental Protection Agency rated the State
Department's 2,000-page March 1 draft review of the TransCanada
Corp pipeline project as "insufficient," in a letter to
department officials as a public comment period ended on Monday.
The agency's tough stance signals that unless the State
Department addresses its concerns in a final review, it could
create more hurdles for a $5.3 billion dollar project which has
been pending for more than four years.
Backers say the project would boost North American energy
security and provide thousands of construction jobs. Opponents
argue that it would lead to higher releases of greenhouse gases.
The EPA said it was concerned about carbon emissions from
the oil sands that are energy-intensive to produce, and about
the safety of transporting Canadian crude via pipeline following
a high profile spill in a Michigan river in 2010.
There was a reminder of the threat last month when an Exxon
Mobil pipeline spilled thousands of barrels of Canadian
crude in Arkansas, but the EPA letter did not mention that
The agency was also concerned about the State Department's
conclusion that the climate would not be affected by approval of
the line because rail would be a major transport alternative.
"This analysis should include further investigation of rail
capacity and costs, recognizing the potential for much higher
per barrel rail shipment costs," the letter said.
The Obama administration is expected to make a final
decision on the line late this year.
The EPA said the State Department should estimate the social
cost of emissions from the pipeline including damage to
agriculture, human health and property from climate change.
The request came despite an almost 20 percent reduction in
the EPA's estimate of how much carbon dioxide would be released
from the oil sands crude carried by the pipeline over its
50-year life, to 935 million metric tons.
"We seem to have continued concern," said a source at the
EPA. "We're pretty assiduously tracking the project."
An interagency Obama administration group has put the social
cost of carbon emissions at $5 to $65 dollars a ton. If the
emissions of the oil sands are not reduced, that means emissions
from the Keystone pipeline could cost between nearly $5 billion
to more than $60 billion over 50 years.
The State Department will have to address the EPA concerns
when it finalizes its review, which could take some time as it
reviews more than 1 million public comments.
In a statement it said it had "always anticipated" the need
to do further analysis on the basis of feedback to its draft
Once the final review is released, the EPA will have another
three months to raise further objections if it is still not
The State Department is in charge of determining whether
Keystone should get a presidential permit because the pipeline
would cross the national border. President Barack Obama is
expected to weigh in on the decision.
NOT A REPUDIATION
An environmentalist said the EPA's concerns should push
Obama to oppose the project, even though the southern leg of the
pipeline, which did not need State Department approval, is
already 60 percent built.
"We still expect him to do the right thing and the EPA has
given him yet another reason to reject Keystone XL," said May
Boeve, the head of environmental group 350.org.
TransCanada spokesman Shawn Howard said emissions should not
be a factor in the decision because Canada's oil sands would
replace imports of heavy oil from Mexico and Venezuela.
In the more than four years that Washington has considered
permitting TransCanada's project, the EPA had raised concerns
three times about State Department reviews of the project. And
the concerns have led to delays.
But the EPA ratings have improved. In 2010 the agency gave
the State Department's first environmental review of the project
the worst possible rating of "inadequate".
An energy policy analyst said the environment agency's
comments on Monday were not likely to stop the approval process
from moving forward.
"This is not a blessing by any means, but it's not a
repudiation, either," said Kevin Book of ClearView Energy