Blocking the Keystone XL Pipeline Won't Help Climate Change
Climate Change Insights 2016-12-05
Beginning this past weekend, environmentalists descended onto Washington, D.C. for a two-week protest designed to pressure President Obama to deny a Presidential Permit for the Keystone XL pipeline project. TransCanada is seeking to construct this pipeline, which would transport up to 700,000 barrels per day (bpd) of crude oil from Alberta to delivery points in Oklahoma and Texas, where the product will be refined. The State Department is expected to decide by the end of the year as to whether to grant TransCanada a Presidential Permit for the Keystone XL project.
Environmentalists protesting in front of the White House are arguing that the Administration should deny the Presidential Permit due in part to the lifecycle greenhouse gas (GHG) emissions associated with the oil sands. One of the organizers of the protest, James Hansen, argued that it would be “game over” for the earth’s climate if the Administration approves a Presidential Permit for the Keystone XL pipeline.
Research, however, contradicts Hansen and others’ claims regarding the impact of Keystone XL on climate change. A Department of Energy commissioned study released earlier this year found that global levels of GHG emissions will not be significantly affected one way or the other by the construction of the Keystone XL project. The study also concluded that oil sands production will not be affected by whether Keystone XL is built or not.
Additionally, IHS Cambridge Energy Research Associates released last year a study that found that lifecycle GHG emissions associated with the oil sands are on par with conventional crude imported from Nigeria, Venezuela and some domestically-produced oil. Consequently, the displacement of heavy crude from Venezuela and other importers with Canadian crude in Gulf refineries is unlikely to result in any material change in net GHG emissions. This study reached this conclusion after conducting a meta-analysis of thirteen publically-available studies on the lifecycle emissions associated with the oil sands.
Restrictions that limit access to domestic markets for Canadian oil sands will likely result in Canadian producers shipping crude oil to Asia for refinement. This scenario raises the risk of emissions leakage because shipping Canadian crude to Asia would likely increase lifecycle GHG emissions associated with the oil sands. The emissions associated with shipping crude derived from oil sands to Asia would also likely be substantially higher than comparable emissions associated with transporting the crude oil from Alberta to the Gulf Coast region. Refining Canadian crude in Asia could also have other negative environmental consequences because China and other Asian countries have less transparent and vigorous environmental regulations of the refinery sector than those in the United States.
This analysis of GHG emissions says nothing of the significant energy security and economic benefits associated with Keystone XL project. As noted by the DOE study, increased oil sands imports to the U.S., coupled with reduced domestic demand, “could essentially eliminate Middle East imports longer term.” The project is also projected to create over 20,000 jobs, along with providing states and municipalities with much needed tax revenue.
Responsibly addressing climate change, while also sustainably developing energy resources to meet the needs of our global economy, is one the great challenges of our time. Blocking the Keystone XL project, however, will not have a discernable effect on reducing global GHG levels.