EPA: Cheap oil raises Keystoneâs climate impact
The Environmental Protection Agency gave President Barack Obama a road map for rejecting the Keystone XL on Tuesday, warning that the pipeline could drive up production from Canadaâs oil sands and worsen climate change. Obama, who is set to veto a bill that would take the decision over the Canada-to-Texas oil link away from the White House, has not indicated whether heâll ultimately give a green light to the project after six years of study. Story Continued Below But his recent comments on Keystone have shown him to be skeptical of the benefits that its backers say the pipeline would offer the U.S., and the EPA statements could provide him with a policy rationale to deny it the needed permits. In its long-awaited comments on the State Departmentâs environmental review of Keystone, EPA said State should give âadditional weightâ to whether the sharp drop in oil prices would increase the pipelineâs environmental impact and stimulate production in the carbon-rich Canadian oil sands. Green groups hailed the EPA comments, which they said provided the White House with enough doubt to deny the project a permit, while pipeline supporters dismissed them as a bid to provide political cover to the president. State had outlined a low oil price scenario in its Keystone review last year â a possibility deemed unlikely until crude prices began their steep swoon last June â saying the rejection of the pipeline could make a notable difference in the production of Albertaâs heavy crude as well as greenhouse gas emissions. âWhile 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 a barrel last week) highlight the variability of oil prices,â EPA wrote in its comments to State. State had said in its report that the high crude oil prices meant Canadaâs oil producers had sufficient market incentive to produce oil and ship it to customers by rail or truck â transportation alternatives that have a higher greenhouse gas impact than a pipeline. Perhaps most important for environmental groups, EPA used four variations on the same word Obama uttered in June 2013 to describe his benchmark for judging the pipelineâs climate impact: âsignificant.â âUntil ongoing efforts to reduce greenhouse gas emissions associated with the production of oil sands are more successful and widespread,â EPA wrote in its letter to State, the administrationâs environmental review shows that âdevelopment of oil sands crude represents a significant increase in greenhouse gas emissions.â Bill McKibben, co-founder of the green group 350.org, welcomed the EPA letter. âItâs always a rare and interesting day when someone from Washington says something accurate and straightforward,â he told reporters on a conference call. The House plans to vote on the Senate version of the Keystone bill next week, senior aides told POLITICO on Monday, which could see the measure that would approve the pipeline reach Obamaâs desk by Presidents Day. The White House has said Obama will veto the bill. The EPA letter also praised State for having âstrengthened the analysis of oil spill preventionâ and responses in its yearold environmental review of Keystone, as well as its inclusion of new measures from pipeline backer TransCanada to alleviate the negative effects of potential leaks. âWe have a deep care for the environment and all of the unique habitats and resources along all of our energy infrastructure corridors, and we work tirelessly to minimize the impact of our operations on all of them,â TransCanada spokesman Shawn Howard said in a statement on the EPA letter, noting that âmany parts of it are positive.â âNo single entity or group has a monopoly on caring for the environment, and our track record speaks for itself,â he added. Anthony Swift, an attorney at the Natural Resources Defense Council, acknowledged that EPA did point to areas âwhere State has improved,â but he said the comments generally depict Keystoneâs environmental impact as ample and negative. The oil industry did not disagree. Louis Finkel, executive vice president for government affairs at the American Petroleum Institute,slammed the EPA letter in a statement as âpolitics as usualâ and âjust another attempt to prolong the KXL review.â APIâs Cindy Schild said in an interview that Obama has âgot his political cover here if he wants itâ to reject Keystone on global warming grounds. But she also noted that the administrationâs estimate that Canadaâs oil sands have a 17 percent higher carbon footprint compared to other crude oil sources had been contested by other, industry-backed studies. And she pointed to EPA praise for other aspects of the State Department review. âKudos to finally seeing some acknowledgment in that arena,â Schild said. Heightening the political stakes for API and congressional backers of Keystone is the likelihood that the EPA letter will be the only comment on the pipeline thatâs been made public before the White House makes its final decision. State said on Monday that it would not publicly release broader comments on whether the pipeline was in the national interest that were submitted by EPA, the departments of Energy and Interior and perhaps five other federal agencies. Interior had commented in 2013 on a draft environmental review by State but this year chose to focus its comments on the national interest process, a spokeswoman confirmed on Tuesday. In its comments, the spokeswoman said, Interior âencouraged the State Department to give appropriate consideration to comments previously submitted during the Keystone XL permit review process as well as concerns expressed by some tribes in Indian Country about the project.â