The Impact of the Keystone XL Oil Pipeline on the US Climate Agenda

keystone-xl-pipeline-mapOn Thursday January 1, 2015, the Nebraska Supreme Court threw out a lawsuit challenging the proposed route for the Keystone XL oil pipeline which originates on the border between Canada and the North Western part of the USA. The decision overturns a lower court ruling and sets up a showdown between the Republican-controlled American Congress, which say the project will create jobs and boost North American energy security, and the White House, which opposes the pipeline on the basis that it furthers dependence on fossil fuels and hinders the country’s progress in addressing climate change.

The Keystone Project

Keystone-Pipeline photoThe Nebraska ruling means that the 2,148-mile long pipeline has a legal green light to proceed, more than six years after TransCanada first started trying to build it. Removing the last legal barrier to approval of this contested project, the U.S. State Department has already said that the pipeline project would not have major environmental implications.

Despite the position of the State Department, many environmental organizations continue to advocate against the approval of the new pipeline which would mean carrying Canadian oil sands crude (a sludgy, dirty type of crude oil that emits more greenhouse gases in its production than regular oil) over the border into the US down to the Gulf of Mexico.

capitol hillThe Last Battle in Congress

The project now needs to be approved by government before it can proceed. Although the bill concerning the project was approved by the House of Representative last week, this approval falls short of the two-thirds majority in both chambers needed to overcome White House opposition. With the results of the votes in the Senate (the other chamber of Congress) still pending, President Obama has already announced that he would veto a Senate bill aimed at greenlighting the controversial Keystone XL pipeline.

Economic Impact

Jack Gerard, the president of the American Petroleum Institute has stated that the $8 billion project could “create 42,000 American jobs…at a time we need them most”. Commenting on the falling oil prices, Gerard said that there is still long-term growing global demand for energy, including oil and natural gas. The project would carry 830,000 barrels per day of crude oil. Others disagree with this assessment as the State Department’s environmental review of the project said it would lead to only 1,950 construction jobs over a two-year period and 35 permanent jobs. Furthermore, low oil prices would seem to undercut the benefits of a project meant to boost supply for Gulf Coast refineries. However, the expanded capacity from the pipeline could help oil companies ramp up production even at lower prices, because it would offer a lower delivery cost than rail or trucks.

keystone_pipeline_protest_11_07_2011Environmental Impact

The Keystone XL pipeline is likely to be the first big climate test of 2015.

As almost 200 countries try to work out an agreement in 2015 to slash carbon emissions, the U.S. and others are about to make the climate task tougher by adding new fossil fuel pipelines. New pipelines like the controversial Keystone XL have a lifespan of 50 years or more. Coal or natural gas on the other hand typically stay online for 35 to 40 years, according to the University of California at Irvine.

Opponents say the pipeline would worsen global warming by causing emissions during its construction and 50 years of operations. In addition, making a potentially large stream of cheap heavy oil available on the world market would lower global prices—and thus increase consumption and carbon emissions. Thanks to the $18.5 billion a year oil and gas subsidies issued by the federal government,  fossil fuel production and related greenhouse gas emissions, have already risen 2.5 percent in 2013 after years of declines, according to U.S. Energy Information Administration, the cannot increase further.

The Stockholm Environment Institute recently reported that the Keystone XL’s highest potential impact on the climate might be as much as four times greater than the State Department had estimated.

Taken together with the government’s move to promote natural gas plants, U.S. decisions this year on new power plants and a range of major fossil fuel infrastructure projects represent a critical test of whether the nation’s actions line up with its climate-change pledges.

White House Policies on Climate Change

o-CLIMATE-CHANGE-facebookSo far the Obama administration has taken some bold steps to improve the state of climate advocacy in the US. In November, Obama pledged to reduce U.S. carbon emissions as much as 28 percent from 2005 levels by 2025, and around 80 percent by 2050. In December his administration issued new draft guidelines calling for agencies with authority over fossil fuel projects to quantify the climate effects of proposals and to consider reasonable alternatives and mitigations.

These are promising signs for reaching an international climate agreement in Paris in December. That being said, many of the climate delegates due to attend the Paris conference on behalf of their respective countries will be looking at the outcome of this government showdown on the Keystone project to assess the credibility and resolve of US climate policies.

Let’s hope the Obama administration sticks to its cards and wins this important hand.

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