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EPA Unlikely to Buy Argument that Keystone XL Will Not Worsen Climate Change: Agency Concerns Were Ignored

Keystone XL and the EPA

The lead U.S. environmental agency has for several years raised serious concerns about the climate, environmental, safety, and health impacts of the proposed Keystone XL tar sands pipeline.  Three different times, the U.S. EPA  has issued failing grades saying the true impacts of the pipeline have not been adequately considered.  And yet, the Final Supplemental Environmental Impact Statement (FSEIS) released in January by the State Department’s Bureau of Oceans and International Environmental and Scientific Affairs (OES) and its contractor ERM failed again to meet the grade.  NRDC has completed a review and concludes that the FSEIS failed to address many of the core concerns raised by the EPA and thereby fails to fully calculate the full extent of the pipeline’s environmental and human impact.  The EPA is unlikely to buy the conclusion the pipeline has no significant impact on climate.  At this point, the EPA can – and should – weigh in again during this critical final phase of the permitting process.  Despite the serious flaws in the FSEIS underestimating impacts of the pipeline, there is enough evidence to reject the pipeline.  Any meaningful analysis of the EPA’s concerns – including the failure of the environmental review to addresses those concerns – should lead to a very clear conclusion:  Keystone XL is not in this nation’s national interest and should be rejected.

The EPA provided OES with comments in 2010, 2011, and 2013.  Over this time, EPA has raised fundamental concerns about the project and how the State Department’s OES office and its contractor ERM addressed these concerns.   Below we have outlined some of the key issues.  A more detailed analysis can be found here.

Climate change

While the FSEIS has acknowledged EPA’s concern that tar sands is more carbon intensive and could have a considerable climate impact, the environmental review ignored EPA’s request to seriously consider the carbon pollution impacts of the project.   

Despite requests by the EPA, OES has failed to illustrate just how big an impact Keystone XL will have on efforts to slow the threat of climate change.  The FSEIS shows that greenhouse gas emissions related to Keystone XL could total as many as 8.4 billion metric tons over the 50 year lifetime of the project. This is equivalent to annual emissions from 35 million passenger vehicles for 50 years.  To gauge just how high that number is, the total number of passenger vehicles registered in Canada in 2010 was just over 20 million.  Even if you only count the additional emissions of the project (using tar sands oil instead of conventional oil) those emissions would be more than half the countries in the world (27.4 MMTCO2e annually).  In the Northeast and Mid-Atlantic, the Regional Greenhouse Gas Initiative (RGGI) is project to reduce emissions by up to 11.9 million metric tons CO2 per year. 

If Keystone XL’s 8.4 billion metric tons of CO2e were released, Keystone XL alone would be responsible for using up to 1.8% of the total remaining global budget for carbon emissions. In 2013, the Intergovernmental Panel on Climate Change (IPCC) released figures that have been termed Earth’s “carbon budget.”  This “budget” consists of the total greenhouse gas emissions that may be released if average global temperatures are to be held at or below a two degree centigrade increase. 

For a single industrial project, that number should shock anyone who believes there is any hope of mitigating global temperature increases.  What’s worse, at current production levels, the tar sands industry will produce nearly 23 billion tons of greenhouse gases over the next 50 years, or nearly 5% of the total remaining global carbon budget.  The environmental review’s failure to consider the impact of these emissions cut to the heart of its failure to disclose the real and substantial risks posed by Keystone XL and the tar sands industry.

While the social costs of carbon from the pipeline equate to $128 billion (based on the FSEIS climate numbers), EPA’s request that these economic costs be included was ignored.

In every letter it has written to the State Department, EPA has recommended that State significantly expand its analysis of greenhouse gas emissions associated with Keystone XL and include an analysis of both their social cost and their roll in global climate change.  Thankfully, we know from the FSEIS and information from Interagency Working Group on Social Costs of Carbon that the overall social cost of greenhouse gas emission increases caused by Keystone XL is $128 billion.  While the social cost is easily determined, the FSEIS failed to provide any estimates or any analysis on this issue in its FSEIS. 

Air pollution and community impacts

The environmental review underestimated how Keystone XL has a disproportionately high and adverse human health and environmental effects – a key EPA concern.

EPA has raised concerns about whether Keystone XL will have a disproportionate impact on low-income, minority, and/or tribal communities.  As the State Department found, many environmental justice communities along Keystone XL’s route have insufficient access to medical care, a fact that suggests threats from a spill or other accident are actually quite severe for these communities.  It will be up to the EPA to raise concerns that these impacts were underestimated (the FSEIS limited its analysis of impacts to those caused by noise, competition, and transportation disruption all of which it deems to be temporary and minor). 

EPA has long requested that the State Department’s environmental review of Keystone XL defend its conclusion that expected increases in refinery emissions tied to refining tar sands crudes “would likely not be major.”  Indeed, the evidence shows that burning tar sands in Gulf Coast refineries will worsen air pollution given tar sands crudes have higher sulfur, metal, and VOC content.  Furthermore, the evidence now suggests that Gulf Coast refineries are burning lighter oils meaning an influx of heavy and dirty tar sands will cause a greater impact.  Despite mounting evidence, the FSEIS came to a flawed conclusion that emission increases from approving the pipeline were not expected to be major.

The risk of a pipeline spill and impacts to water

Following two ruptures of pipelines carrying tar sands crude oil in Michigan and Arkansas, the EPA has expressed very serious concerns about the sufficiency of OES’s disclosures about the differences between conventional and tar sands crudes. 

The environmental review took a significant step acknowledging EPA’s concern that the chemical composition of diluted bitumen was different.  But EPA’s concern regarding the overall impact of tar sands remains unaddressed.

Following spills in Michigan and Arkansas, EPA has become increasingly concerned about the public health impacts of spills of tar sands crudes.  Because tar sands are semi-solid, a diluting agent must be added to make them flow through pipelines.  This diluting agent contains many toxic constituents, some of which are carcinogenic, which quickly evaporate into the air around a spill, leading to the risk of widespread human health impacts.  Though the environmental review acknowledges some differences between tar sands and conventional crudes, it downplays these differences and essentially concludes that tar sands just aren’t that different from other crude oils.  This conclusion once again flies in the face of what is known about tar sands crude and the extremely high levels of volatile organic compounds that they contain. 

Keep in mind that Keystone XL’s leak detection systems are only sensitive enough to detect leaks totaling more than 1.5% of the pipeline’s capacity.  This means that the leak detection system would not detect spills below 12,450 barrels or 522,900 gallons of tar sands oil.  Considering that the pipeline traverses large swaths of uninhabited farmland, the risk of a spill going undetected appears extraordinarily high.  Independent engineering reviews of Keystone XL’s safety measures echo this concern and suggest that additional spill detection systems must be put in place to ensure that these types of leaks are more quickly detected.

EPA raised a concern that approving Keystone XL could take expand Nation’s commitment to carbon intensive oil.

In their July 2010 comments, the EPA stated: “[W]e believe the national security implications of expanding the Nation’s long-term commitment to a relatively high carbon source of oil should also be considered.”  We agree.  Secretary Kerry should closely evaluate whether the U.S. should permit a 50-year infrastructure project that amounts to a long term commitment to producing, refining, and selling a fossil fuel with higher than average concentrations of carbon.  Approving this 50-year carbon intensive project would be completely at odds with the Obama administration’s climate and clean energy goals.  It is time to reject the Keystone XL tar sands pipeline.

For a complete analysis of EPA’s concerns and the State Department’s responses, click here.

This analysis and blog was co-drafted with Josh Axelrod.

Photo Credit: EPA and Keystone XL/shutterstock

Danielle Droitsch's picture

Thank Danielle for the Post!

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Discussions

John Miller's picture
John Miller on Mar 15, 2014 7:58 pm GMT

The major argument (in this post) against the Keystone XL is that if it were not built, no future increase in Canadian oil sands crude would develop or associated impacts such as climate change and SCC.  This assumption appears to have a very low probability of actually developing.  Since the original Keystone XL pipeline permit application was submitted in 2008 (and approval decision delayed) the amount of U.S. Canadian imports, primarily oil sands synbit/dilbit, have increased by over 600 thousand barrels per day (KBD).  These increased oil sands imports have been transported largely by increased rail.  The 600 KBD represents about 70% of the Keystone XL design capacity and the assumed negative environmental impacts have also likely already developed.

The statement: “burning oil sands in Gulf Coast Refineries will worsen air pollution” is highly erroneous.  First, Refineries do not directly burn crude oil feedstocks and generally only use the lighter hydrocarbon co-product fractions after refining-processing; distillation, hydro-cracking into lighter, more valued products, and, removing sulfur and metals.  VOC’s or fugitive emissions are not a function of crude feedstock gravities/qualities, and are addressed by state-of-art environmental controls required by the EPA and States.  U.S. Refineries are the most efficient and cleanest facilities in the world today.  They do not pollute at greater levels by substituting Canadian heavier crude oil imports due to existing environmental regulations and controls.  All Refineries have design constraints on efficiently and cleanly processing different crude oil feedstocks into petroleum transportation and heating fuels.  To accomplish this U.S. Refineries in the Gulf normally substitute heavier domestic or imported crudes for Canadian imports.  An obvious example has been displacing heavy Venezuela syncrude, whose imports have declined by about 400 KBD 2008-2013, with Canadian syncrude imports.

Pipelines are the normally cleanest, safest and most efficient mode of transporting crude oil on average and historically.  Unfortunately the only alternative to lack of pipelines/capacity has resulted in recent rail incidents within North America.  To mitigate these risks and possible repeat incidents has resulted in implementing required preventative regulation upgrades; improved train operations, tank car standards, routings, etc.

As far as the: “Keystone XL expanding the U.S.’s commitment to oil”, once again the facts do not support this assumption.  Without the Keystone, U.S. oil demand will continue to be met by increased domestic production or imports from outside North America.  Only by successfully and substantially decreasing the need and demand for oil (increased energy efficiency and cost effectively developing alternative energy supplies to petroleum), will any policy decision reasonably reduce the demand for world oil supplies; including Canadian oil sands.

Bob Meinetz's picture
Bob Meinetz on Mar 16, 2014 6:47 am GMT

@John: the U.S. cannot prevent Canada from developing its tar sands. What we can do is not serve as an accomplice by facilitating the extraction of the material 40% responsible for climate change.

Western Canadian Select futures are currently trading at a $20/bbl discount to West Texas Intermediate, and it’s in large part because of bottlenecks due to Keystone XL not being operational.

Will Keystone make gasoline cheaper? No.

Will Keystone create permanent American jobs? No.

Bottom line: the only reason to accomodate TransCanada is to make it more profitable for them to sell the dirtiest source of petroleum on the planet. America can take an important and very public stand against global warming and BAU, or it can send a signal that the most entitled and energy-consuming nation on Earth is not willing to step up to the plate.

What kind of precedent does that set?

John Miller's picture
John Miller on Mar 16, 2014 9:48 pm GMT

Bob, I definitely respect your opinion, but in this case I have to disagree.

1.      The contribution of oil sands to future carbon emissions is relatively insignificant compared to total world coal and petroleum consumption.  Most estimates overlook the fact that U.S. Refineries are significantly more efficient than average Asia/EU Refineries (most likely alternative oil sands markets outside North America) and the pipeline transport is far more efficient than marine transport cross-oceans.  Added oil sands carbon emissions from refining in Asia/EU could be directionally double the level of processing the oil sands crude within North America.

2.      The primary reason why Canadian synbit/dilbit crudes cost $20/Bbl less than WTI. is due to the difference of crude oil qualities & associated market value.  WTI is generally lighter and lower sulfur, which makes it much less expensive/energy intensive to refine into EPA/States specifications for cleaner motor and heating fuels.

3.      The Keystone will directionally make gasoline cheaper vs. imported crudes from outside North America, but the cost savings could be small depending on many other market variables.

4.      Job creation will initially be very significant (many thousands) due to the construction of the pipeline and fabrication of required construction materials, but will definitely decline to much lower levels after construction is complete.  Operating and maintaining the pipeline will add a couple hundred long-term permanent  jobs.  The maximum number of longer term jobs will clearly be in Canada.

5.      And, of course, where I agree-to-disagree is the fact that the oil sands crude will most likely and eventually be produced even if the Keystone XL is not approved/built.  Yes, the option of moving the Canadian crude into world markets will have lower profit margins than the Keystone XL, but with average world crude prices in the $100 range or possibly higher in the future, adequate profitability is likely to still cost effectively lead to oil sands ultimate development and consumption in the future.

Probably where we most disagree is that the most cost effective and feasible solution to reducing world petroleum demand and associated carbon emissions is to truly develop the efficiency technologies and alternative renewable energy sources that make future petroleum much less attractive to all markets around the world, including Developing Countries in Asia, South America and Africa.

Geoffrey Styles's picture
Geoffrey Styles on Mar 17, 2014 2:13 pm GMT

Don’t forget your own mirror. Even for oil sands, more than 70% of the lifecycle GHG impact occurs during consumption. Since the main use of petroleum fuels is in transportation, with less than 1% used in power generation in the US, consumer demand to fuel cars, buses, planes and the trucks and trains that carry the goods we buy is the real elephant in the room.

By the way, it’s not clear from your choice of adjectives that you appreciate that burning gas in a flare, while less desirable than capturing it for use, is still at least 25 times better from a GHG perspective (mass basis) than venting it as methane.

Lewis Perelman's picture
Lewis Perelman on Mar 22, 2014 12:58 am GMT

John Miller’s exposure of the distortions in the article and the EPA-attributed comments is on target and welcome.

In assessing this NRDC broadside, also consider the relationship between advocacy organizations like NRDC and EPA staff:

http://articles.baltimoresun.com/2014-03-03/news/bs-ed-revolving-door-20140302_1_epa-officials-al-armendariz-natural-resources-defense-council

http://www.foxnews.com/politics/2014/01/22/emails-show-cozy-relationship-between-epa-environmental-groups-on-keystone-coal/

 

 

Bob Meinetz's picture
Bob Meinetz on Mar 24, 2014 1:46 am GMT

Lewis, FOX News is not a reliable source, but suffice to say that industry groups have never been – and never will be – pro-environment. Apparently that mentality gets in the way of making money, mankind’s most rewarding and important pursuit. And if there is a source of animosity between the EPA and industry, it’s certainly not the agency Nixon created or the ethos Teddy Roosevelt espoused,  but the current crop of maniacal right lunatics who have tried every move in the book to thwart, block, or flank any environmental protections which might impact their bottom line.

I have no doubt that environmental advocacy groups seek to influence policy through sometimes nefarious means. The difference is the amount of money which changes hands, and the amount of money behind oil and coal dwarfs what NRDC, Greenpeace, et al have available by probably three orders of magnitude. It’s a miracle they even exist, which is also a testament to their sincerity of purpose (though I hardly agree with all of their positions). But last year, I was personally responsible for uncovering an episode in which the State Dept. was caught red-handed redacting conflicts of interest in their Keystone review. Somewhat remarkably, they later concluded there was no wrongdoing, even with incontrovertible evidence that there was. So if you don’t believe this sword cuts both ways, well, you’ve been watching too much FOX News.

The embarrassingly childish behavior of Republicans over environmental concerns has a precedent: I remember well in the 1970s when automakers and their pro-business representatives sought to portray catalytic converters as catastrophic, as apocalyptic, for their industry. As it worked out, there was no negative economic effect whatsoever, and air in the United States got a whole lot cleaner. Their meme flopped. Hopefully, Obama will ignore these bully-pulpit tactics and put the long-term health of the planet on a slightly higher plane than short-term profit forecasts.

Lewis Perelman's picture
Lewis Perelman on Mar 26, 2014 1:53 am GMT

Bob, Fox News certainly is not an unbiased source. But the facts its report cites are consistent with other sources indicating a revolving-door, collusive relationship between EPA and zealous environmental groups — a relationship even you concede exists.

Given that, the continual invocations of “EPA says” in the above article should be viewed as adding no particular credibility beyond “NRDC says” since the sources and their biases are essentially interchangeable.

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