2013- 2015 Keystone XL Pipeline Environmental Review by US State Department

“[T]he Final SEIS concluded that although development of oil sands would lead to significant additional releases of greenhouse gasses, a decision not to grant the requested permit would likely not change that outcome, i.e., those significant greenhouse gas emissions would likely happen regardless of the decision on the proposed Project…

Given the recent variability in oil prices, it is important to revisit these conclusions. While 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 per barrel last week) highlight the variability of oil prices. The Final SEIS concluded that at sustained oil prices of $65 to $75 per barrel, the higher transportation costs of shipment by rail ‘could have a substantial impact on oil sands production levels – possibly in excess of the capacity of the proposed project.’ In other words, the Final SEIS found that at sustained oil prices within this range, construction of the pipeline is projected to change the economics of oil sands development and result in increased oil sands production, and the accompanying greenhouse gas emissions, over what would otherwise occur.”

US Environmental Protection Agency (EPA), Letter to State Department, Feb. 2, 2015

On Jan. 31, 2014, the US State Department issued its “Final Supplemental Environmental Impact Statement” for the proposed Keystone XL pipeline which provided an assessment of potential environmental impacts that could occur if the pipeline was built. The State Department wrote in a Jan. 31, 2014 “Media Note” that the next step in the process is a Presidential Permit review that will decide “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.”

US State Department, “Final Supplemental Environmental Impact Statement for the Keystone XL Project: Executive Summary,” Jan. 31, 2014

The Environmental Protection Agency (EPA) released a public letter on Mon. Apr 22 criticizing the conclusions of a Mar. 1, 2013 State Department environmental review of the proposed Keystone XL tar sand pipeline.

The EPA letter argued that the State Department Supplemental Draft Environmental Impact Review did not properly assess the higher costs associated with rail transport of tar sand oil. The EPA reasoned that higher transportation costs could reduce the total amount of tar sands oil that is extracted and refined, thus reducing future greenhouse gas emissions.

For more information on this EPA letter click here.

The US State Department concluded in its “Supplemental Draft Environmental Impact Review” that tar sand oil would continue to find its way into the US market regardless of whether or not the pipeline is built, and therefore, approval of the pipeline would “not by itself substantially affect GHG [greenhouse gas] emissions or contribute to climate change.”