License to Spill


Keystone (1) On February 17, 2013, nearly 50,000 people gathered in Washington D.C., including a contingent from Columbia University, to participate in “Forward on Climate,” the largest climate rally in US history. These thousands convened from all over the country in order to urge President Obama both to say no to the Keystone XL pipeline, a proposed extension to the Keystone pipeline that has become a rallying point in the fight against climate change, and to take swifter action to combat climate change more generally.

The XL extension, a seven billion dollar pipeline, would stretch 875 miles from Canada, crossing Montana, South Dakota, Nebraska, Kansas, and Oklahoma, before ending in Texas. It would transport 830,000 barrels of diluted or crude oil per day to refineries on the Gulf of Mexico. The oil in the pipeline would be extracted from the Alberta tar sands in northern Canada, which contain a vast quantity of bitumen, a solid state of petroleum, mixed with water, sand, and clay. Tar sands oil (diluted bitumen) is known as an unconventional fossil fuel because of its particularly energy-intensive extraction process; according to the State Department, it emits 17 percent more CO2 than conventional oil, since it requires a large quantity of heat to separate the oil and sand.

The president now faces a difficult decision. Since the pipeline would pass international borders, it requires a permit from the State Department, and so Obama and his administration have the final say on whether or not the project is approved. On the left, he faces intense pressure from environmentalists—many of whom were key supporters, and donors, in 2008 and 2012. On the other side are those advocating for jobs and a secure source of energy, including many moderates and conservatives, as well as the labor movement.

According to leading environmentalist Bill McKibben, the pipeline’s construction would be “the fuse to the biggest carbon bomb on the planet.” In addition, refining the oil, which is slated for facilities in Texas, is even more destructive than refining conventional oil, emitting nitrous oxides and sulfur oxides, chemicals that contribute to acid rain, smog, and asthma. Oil spills are an issue as well, considering that the Keystone I pipeline has leaked 12 times in the past year, threatening wildlife and exposing communities to toxic materials. The pipeline is an environmental disaster, threatening local ecosystems and communities, and extracting tar sands oil is a grave mistake for our climate.

Though he was out golfing with oil executives as the protestors surrounded his home last February, the president has heard their message over and over since the first major protest in August 2011. More than 1,000 people were arrested there, making it the largest collective act of civil disobedience in the history of the climate movement. Led by leading international climate organizations such as and the Sierra Club, opponents to the pipeline have sent more than a million messages and letters to the State Department’s public comment system, consistently impeded construction of the southern portion of the pipeline in Texas by chaining themselves to trees and machinery, and bringing the question of the pipeline’s permit into mainstream American political discourse. In August 2011, it was assumed that the pipeline would be approved easily, but the surge of protest has continued to delay a decision—until recently.

Many have predicted that the president will make a decision within 90 days of the State Department issuing its last report on the pipeline—the Final Supplemental Environmental Impact Statement (or Final Supplemental EIS). This report is an evaluation of the environmental impact that the pipeline would have and responds to the millions of comments that the State Department has received.

The publication of the report marks the end of the environmental review process and ushers in the Presidential Permit review. This period of deliberation will, according to a statement from the State Department, consider “whether the proposed Project serves the national interest, which involves consideration of many factors: including, energy security; environmental, cultural, and economic impacts; foreign policy; and compliance with relevant federal regulations and issues.” The government has opened up another round of commenting, slated to end on March 7, after which the president will presumably make a final decision.

The Final Supplemental EIS was not promising for environmentalists. Nor did they expect it to be, after uncovering ties between the report’s contractors and TransCanada, the Calgary based energy infrastructure company responsible for the Keystone project. The main player responsible for the research and report is Environmental Resources Management (ERM), a company with very close ties to the fossil fuel industry. ERM is one of a few energy industry groups that are publicly in support of approving Keystone, and even had a lobbying contract from a group that included TransCanada. Additionally, ERM worked with TransCanada on the Alaska Pipeline Project. Jacobs Consultancy, the company that analyzed the effects on climate change and greenhouse gas emissions, is also owned by a tar sands developer and was hired by the Alberta government. Despite recent claims by environmental lawyers that these are significant conflicts of interest, the State Department has not made any concessions, ensuring the apparent objectivity of the report.

The EIS analyzed eight key areas, coming to similar conclusions as they had in past reports in all sections except climate impacts. In the climate section, the report came to the conclusion that building Keystone XL would not significantly affect greenhouse gas emissions. This statement has created a political pathway by which the president can approve the pipeline and not go back on previous promises. In a climate speech at Georgetown University last June, he stated that he would approve pipeline only if it would not “significantly exacerbate” greenhouse gas emissions—this statement has now been corroborated by the State Department. Unfortunately, it is incorrect.

Keystone (2)The State Department argues that Canada will extract and sell the oil no matter what since the pipeline is not the only way to transport the oil. They claim, therefore, that the issue of increased greenhouse gas emissions and climate change is irrelevant. Yet if we examine the alternatives—the State Department points to three: rail and pipeline, rail and tanker, and rail direct to the Gulf Coast—it is clear that Keystone is the only viable option. The State Department has failed to recognize the limited feasibility of these other options.

In the rail and pipeline scenario, crude oil would almost certainly be sent via rail from Lloydminster, Saskatchewan to Stroud, Oklahoma. It would be stored in Oklahoma and then enter existing and expanded pipelines to refineries in Cushing, Oklahoma. Similarly, with rails and tankers, the oil would first be sent out via rail. It would then travel to Western Canada, where it would be loaded onto tankers and shipped to the Gulf Coast. Finally, they propose that oil be directly sent to the Gulf Coast by rail. The report stated, “rail will likely be able to accommodate new production if new pipelines are delayed or not constructed.” But this ignores all of the issues with rail.

The major flaw with rail and tanker, which the State Department overlooks, is that the costs are currently prohibitive. There are huge expenses in building new infrastructure as well as a significant increase in cost to transport each barrel, compared with transport by pipeline. Each of these situations requires the construction of multiple new rail facilities and would involve 12-14 unit rails—trains in which all cars travel from one point to another, usually transporting a singular good in bulk—per day. The construction of these terminals and many new cars would be expensive. This is in addition to the extra costs of shipping via rail as opposed to pipeline. Estimates say that a barrel will cost $15.50 by rail, but in current practice the cheapest non-pipeline method is rail and barge, costing $30 a barrel. In comparison, the State Department says that the Keystone pipeline will be eight to ten dollars per barrel. Additionally, Reuters reporter Patrick Rucker investigated the costs and came to the conclusion that to get the oil to the Gulf Coast, railway rates would cost more than two times what pipeline tariffs would be. While economic conditions change with time, it is clear that at this time the State Department’s claim— that rail is ready to fill a gap left by scuttling the Keystone XL extension— is untenable.

Rail was traditionally seen as just a short-term alternative because of such high costs. It may not even be possible to build all of the facilities needed. Construction to expand rail capacity is currently in process in Alberta, but it has been much more difficult than expected, facing unfavorable weather conditions, increased labor costs, and logistical challenges. Canexus Corp. in Alberta is in the process of building Canada’s first unit train terminal—a station that would have a much larger capacity than any existing ones and would solely send out unit trains carrying tar sands oil. Since it started the process of construction, costs have risen 40 percent, and the process is many months behind schedule. Rail is also a highly dangerous way of transporting oil. Two recent accidents—one in Quebec last July, and one in Alabama last November—resulted in more than 50 deaths, and have led lawmakers to draft new standards for transporting oil via rail. These new regulations are likely to reduce efficiencies and further drive up the price of rail.

Other sectors of the government are raising objections to the State Department report. The Environmental Protection Agency stated that the State Department report “is not based on an updated energy-economic modeling effort...This analysis should include further investigation of rail capacity and costs, recognizing the potential for much higher per barrel rail shipment costs.” The State Department has been overly optimistic about rail in the past. In a 2011 report, it wrote that “shipment of conventional or oil sands crude in Canada is arguably just now reaching a takeoff point…the implication is that we could see a growing scale of shipment of crude by rail in the next one to two years.” This prediction has not been fulfilled. In 2011, refineries in the Gulf Coast processed 150,000 barrels per day of Canadian crude, and that number decreased to less than 100,000 in 2012 (most of the oil was transported via rail from Alberta to the southern United States). It has been more than two years, and we can see that transport by rail from Canada has stalled, despite increased investments in rail infrastructure.

Even if rail and barge systems were set up successfully, it is undeniable that the amount of oil processed and transported would be less than by pipeline due to the cost and practical advantages of pipeline over rail. The Royal Bank of Canada’s brokerage services, under the title RBC Dominion Securities Inc., referred to Keystone XL as “a key supply chain link” for tar sands oil in a recent market analysis. Various projections corroborate the claim that Keystone would expand tar sands exploitation in comparison to rail options.

The same RBC report predicted that a rejection of Keystone would reduce tar sands extraction by 450,000 barrels per day from now until 2017. Just in the processes of mining and turning bitumen into synthetic crude oil, each barrel produces about 116 kg of greenhouse gas emissions, according to oil industry consultants IHS Cambridge Energy Research Associates. That means rejecting the pipeline would save 52,200,000 kg of greenhouse gases per day, or 19,053,000,000 kg per year, an amount equal to the annual emissions of 145,544 cars. By these numbers, the State Department’s assertion that Keystone would have no climate impact is preposterous.

Despite the setback, the environmental movement is not giving up the fight. Many recognize that the pipeline will be a threat to our climate, despite the proposed alternatives, and are taking a stand to stop it. Even in the very unlikely case that the State Department report is correct and the construction of the pipeline will not affect the rate of tar sands extraction, the message that the United States sends to the world with this decision is still important. Rejecting the pipeline would affirm Obama’s commitment to renewable energy and a future that shifts away from fossil fuels.

On March 2, more than 300 college-age students were arrested protesting the pipeline outside the White House, including 13 from Columbia University. The action, named XL Dissent, was the largest single-day act of civil disobedience in the District of Columbia. Concern with the pipeline and passion to protect the future of our planet inspired over one thousand people to put themselves on the line—physically, as they staged a mock oil spill and chained themselves to the gates of the White House.

Thousands of American citizens—at least 76,000—have signed the Keystone XL Pledge of Resistance, organized by Rainforest Action Network and CREDO. The pledge, started in April 2013, will organize protests across the country at strategic locations such as embassies and TransCanada’a offices, if the State Department’s National Interest Determination finds that Keystone XL would indeed be in the national interest, thereby approving the pipeline.

The Keystone Pipeline would cause “game over” for the planet, according to James Hansen, Columbia University Professor and NASA’s former head climate scientist. By allowing Canada to export 830,000 barrels of tar sands oil through the United States per day, we would be spelling out the destruction of our planet. This issue is larger than the pipeline. Fossil fuels cause climate change: It is indisputable that Keystone XL will have an effect on our climate. Even if we interpret it like the administration did—looking at the alternatives, assuming that the oil will be used no matter what—it is clear that the rejection of Keystone will still reduce emissions from tar sands extraction because of logistical and monetary constraints.

As a nation and as a world, we must start thinking about the long-term impacts of our actions, rather than the short-term economic and energy benefits. Sustainable growth today will be more profitable in the future. Rejecting Keystone XL this spring is the right choice both for the nation and for the planet.