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As a Driver of Tar Sands Expansion, Keystone XL Fails President Obama's Climate Test

In June President Obama laid out a plan for the U.S. to tackle climate change including a climate test for the proposed Keystone XL tar sands pipeline. A new economic and environmental analysis from NRDC makes it clear that the Keystone XL tar sands pipeline fails the President’s climate test. Industry analysts agree that Keystone XL is a critical piece of the puzzle for the tar sands industry to build new extraction projects. Tar sands oil production causes the release of huge amounts of carbon pollution from its energy-intensive extraction methods and refining processes.  The Keystone XL tar sands pipeline would add 935 million to 1.2 billion metric tons of carbon pollution to our atmosphere—a significant increase in greenhouse gas emissions—over the 50-year life span of the project. Expansion of the very energy-intensive and costly tar sands are not in our national interest and the proposed (Photo: maisa_nyc/ Flickr)Keystone XL tar sands pipeline should be rejected.

President Obama said that his administration would reject Keystone XL if the tar sands pipeline failed the following climate test:

“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.”

In a rush to find a silver lining in this very clear statement, pipeline supporters have pointed to the State Department draft environmental assessment of Keystone XL. The State Department, while acknowledging that tar sands has higher greenhouse gas emissions than conventional oil, claimed that it didn’t need to take those climate emissions into account since the tar sands would be developed anyway. The State Department got it wrong. What they need to do now is take a serious look at the climate impacts from Keystone XL, including how this is a pipeline that will drive expansion of the tar sands.

Tar sands oil production causes the release of huge amounts of carbon pollution from its energy-intensive extraction methods and refining processes.  The State Department acknowledges this. The Keystone XL tar sands pipeline would add 935 million to 1.2 billion metric tons of carbon pollution to our atmosphere—a significant increase in greenhouse gas emissions—over the 50-year life span of the project. And this is without taking climate pollution from destruction of Boreal peatlands and wetlands into account.

This is common sense to those working to tackle the challenge of climate change. Congressman Waxman and Senator Whitehouse recently sent a letter to the Administration urging consideration of Keystone XL’s climate impacts. Senator Whitehouse said, “The approval of the Keystone XL pipeline could undo much of the good work President Obama is doing to reduce carbon pollution and address climate change. With the effects of climate change already harming communities across our country, I hope the administration will ultimately reject the development of this toxic pipeline.” And Congressman Waxman said, “I am opposed to the Keystone XL pipeline.  In the face of climate change, the last thing we should be doing is giving a green light to tripling production of tar sands, which are substantially more carbon polluting than conventional oil.  I believe a rigorous analysis will show that the Keystone XL pipeline fails the test the President has set forth and must be denied.”

The oil industry has recently once again confirmed that it is planning a massive expansion of tar sands production. This means new and costly strip-mines and in situ drilling facilities. And Keystone XL is an indispensable part of making this expansion happen. As RBC Capital Markets stated in February, “Should Keystone XL be rejected, Canadian oil sands producers will need to rethink expansion plans, timelines, and export pipeline solutions.” And in June, Goldman Sachs reported that without Keystone XL, lower tar sands prices and higher transport costs will result in the cancelation or deferment of tar sands expansion projects.

Yet, Canadian pipeline company TransCanada is grasping at straws trying to wiggle out of the climate impacts by claiming that Canadian tar sands would replace Venezuelan heavy crude in the Gulf Coast refineries. Our partners Oil Change International have responded with an analysis showing that far from replacing Venezuelan crude refining in the Gulf, tar sands would be additional and that producers plan to exploit a loophole in U.S. crude oil export regulations and export tar sands crude oil into the global market from U.S. ports.

The NRDC analysis takes a closer look at how and why Keystone XL is so critical for tar sands expansion and therefore why the emissions from that expansion must be part of any credible climate analysis.

The expansion of tar sands production is limited by the capacity of pipeline systems to move tar sands to refineries and especially to access overseas markets. Keystone XL, by increasing transport capacity, would enable increased tar sands production and trigger all the attendant increases in greenhouse gas emissions.  Because Keystone XL would link Alberta to international markets, it would enable the tar sands industry to access higher world oil prices.  This would make costly tar sands development more lucrative, encouraging new extraction projects.

And it is not as though there are alternatives to the Keystone XL tar sands pipeline. To accomplish the industry’s planned expansion, they need Keystone XL plus all the other pipeline proposals and more. Ironically, none of these other pipeline proposals to take tar sands to overseas markets seem to be moving forward as they all face substantial legal and public opinion obstacles. Most recently, for example, British Columbia opposed Enbridge’s proposed Northern Gateway tar sands pipeline across the province.  Nor is rail an economically viable alternative for tar sands oil transport. In short, expansion of tar sands extraction depends on the Keystone XL pipeline and the climate emissions from that expanded amount of tar sands production need to be counted by the State Department.

NRDC’s new analysis confirms that Keystone XL fails any climate test. Approval of the Keystone XL pipeline permit will trigger very large increases in carbon pollution that will significantly worsen climate change.  Denial of the permit will prevent these increases. Keystone XL is not in the national interest, and should be rejected.