The House is prepared to put a bill approving the Keystone XL pipeline on President Obama’s desk next week, but administration officials seem to be trying to convince the president that building the pipeline is riskier than previously thought.
Last year, the State Department released its final review of 1,100-mile Keystone XL pipeline and found that the project would have little additional impact on the environment or the climate. But the Environmental Protection Agency argues that low oil prices have undermined the main arguments for building the pipeline.
EPA argues that lower oil prices render oil sands less economic to be extracted and shipped by rail, meaning Keystone’s approval will have a bigger impact on production and therefore the emissions that stem from it.
“While the overall effect of the Project on oil sands production will be driven by long-term movements in the price of oil and not short term volatility, recent large declines in oil prices (oil was trading at below $50 per barrel last week) highlight the variability of oil prices,” the EPA wrote in a letter to the State Department.
The EPA adds that the project’s carbon dioxide emissions will be the equivalent to “7.8 coal fired power plants.”
“In other words, the [State Department review] found that at sustained oil prices within this range [$65 to $75 per barrel], construction of the pipeline is projected to change the economics of oil sands development and result in increased oil sands production, and the accompanying greenhouse gas emissions, over what would otherwise occur [without the pipeline],” the EPA added.
The State Department, on the other hand, determined that oil sands extracted in Alberta, Canada would be transported to buyers even if Keystone XL was not approved by Obama. This would be done via railroads or through existing pipelines.
The only difference, pipeline proponents have argued, is that if a pipeline was not built through the U.S., the oil would simply be shipped across the Pacific, to countries like China, rather than refined in and shipped from the Gulf Coast.
The EPA’s letter comes just as House Republicans are preparing to pass a bill approving Keystone XL, meaning President Obama could be forced to approve or veto the project next week.
But Obama’s approval of the pipeline hinged on its impact on global warming. Environmentalists are hoping that EPA’s argument that low oil prices mean Keystone XL will contribute more emissions to global warming than predicted — therefore failing Obama’s “climate test.”
“The EPA today confirmed what we’ve been saying all along: that the Keystone XL pipeline fails President Obama’s climate test,” said Luisa Abbott Galvão with the environmental group Friends of the Earth. “EPA rejects the State Department’s conclusion that the tar sands would inevitability be developed. These comments further support the rejection of this senseless project by President Obama.”
For years, environmentalists have been battling the oil industry over building the Keystone XL pipeline which would bring oil sands from Alberta, Canada to refineries on the Gulf Coast. A major backer of Keystone’s opposition has been San Francisco billionaire Tom Steyer, whose old hedge fund had investments with a company wanting to build a competing pipeline to Keystone XL.
Environmentalists have argued Keystone would exacerbate global warming, cause oil spills, and raise gas prices. Most recently, opponents have tried to argue that Keystone oil would be sent to the Gulf of Mexico just to be shipped around the world and not refined domestically.
Republicans, however, have been pressuring the Obama administration to approve the project for years. Last week, the Senate Republicans passed a bill to approve the pipeline with the help of some Democrats. The House will likely pass the bill next week and send it to Obama’s desk for approval.
“Passing this measure will send the bill right to the president’s desk after years of uncertainty and delay,” said House Majority Leader Rep. Kevin McCarthy. “Finally, we will know if the president will side with American jobs and North American energy security or not.
“I hope that the president will look at how Republicans and Democrats worked together to pass this bill and will reconsider his veto threat,” McCarthy said.