Keystone XL: Greenhouse Gas Emissions
Assessments in the Final Environmental
Impact Statement
Richard K. Lattanzio
Analyst in Environmental Policy
March 7, 2014
Congressional Research Service
7-5700
www.crs.gov
R43415
Keystone XL: Greenhouse Gas Emissions Assessments in the Final Environmental Impact Statement
Summary
On June 25, 2013, President Obama announced a national “Climate Action Plan” to reduce
emissions of carbon dioxide (CO2) and other greenhouse gases (GHG), as well as to encourage
adaptation to climate change. During his speech, the President made reference to the proposed
Keystone XL Pipeline project—a pipeline that would transport crude oil derived from Canadian
oil sands deposits in Alberta to a market hub in Nebraska for further delivery to U.S. Gulf Coast
refineries. He stated that an evaluation of the proposed pipeline’s impacts on climate change
would be “critical to determining whether this project is allowed to go forward.”
State Department Assessment
The State Department released a Final Environmental Impact Statement (FEIS) on January 31,
2014, to inform the project’s national interest determination. Among the various environmental
impacts analyzed, the FEIS estimates GHG emissions that would be attributable to both the
approval and the denial of the permit application for the project. The FEIS finds that
• the direct and indirect GHG emissions released during the construction period for
the project would be approximately 0.24 million metric tons of carbon dioxide
(CO2) equivalents (MMTCO2e) due to land use changes, electricity use, and fuels
for construction vehicles (this estimate is comparable to 0.004% of U.S. annual
GHG emissions);
• the direct and indirect GHG emissions released during normal operations would
be approximately 1.44 MMTCO2e/year due to electricity use for pumping
stations, fuels for maintenance and inspection vehicles, and fugitive emissions
(this estimate is comparable to 0.02% of U.S. annual GHG emissions);
• the total, or “gross,” life-cycle GHG emissions (i.e., the aggregate GHG
emissions released by all activities from the extraction of the resource to the
refining, transportation, and end-use combustion of refined fuels) attributable to
the oil sands crudes transported through the proposed pipeline would be
approximately 147 to 168 MMTCO2e per year (this estimate is comparable to
2.2%-2.6% of U.S. annual GHG emissions);
• the incremental, or “net,” life-cycle GHG emissions (i.e., life-cycle GHG
emissions over and above those from the crude oils expected to be displaced in
U.S. refineries) are estimated to be 1.3 to 27.4 MMTCO2e per year (this estimate
is comparable to 0.02%-0.4% of U.S. annual GHG emissions); but
• according to the State Department’s market analysis, “approval or denial of any
one crude oil transport project, including the proposed project, is unlikely to
significantly impact the rate of extraction in the oil sands or the continued
demand for heavy crude oil at refineries in the United States based on expected
oil prices, oil-sands supply costs, transport costs, and supply-demand scenarios.”
Many oil industry stakeholders, the Canadian and Albertan governments, and proponents of the
project have supported the analysis as presented in the FEIS. They contend that the demand for
the oil sands resource, as well as the economic incentives for producers and the Canadian
governments, is too significant to dampen production. However, other stakeholders have
questioned several of the conclusions in the FEIS and argue that the project may have greater
Congressional Research Service
Keystone XL: Greenhouse Gas Emissions Assessments in the Final Environmental Impact Statement
climate change impacts than projected, depending upon the assumptions selected from the range
of scenarios considered in the FEIS. These assumptions include projections for global market
conditions, crude oil prices, rail transport costs, new project costs, refinery inputs, and carbon
regulatory policies in the United States or Canada.
Congressional Attention
Members of Congress remain divided on the merits of the project, as many have expressed
support for the potential energy security and economic benefits, while others have reservations
about its potential health and environmental impacts. Though Congress, to date, has had no direct
role in permitting the pipeline’s construction, it has oversight stemming from federal
environmental statutes that govern the review. Further, Congress may seek to influence the State
Department’s process or to assert direct congressional authority over approval through new
legislation.
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Keystone XL: Greenhouse Gas Emissions Assessments in the Final Environmental Impact Statement
Contents
Background ...................................................................................................................................... 1
The State Department’s GHG Emissions Assessment ..................................................................... 2
Reported Findings ..................................................................................................................... 2
Methodology.............................................................................................................................. 4
Evaluation Considerations ......................................................................................................... 7
The Life-Cycle GHG Emissions Assessment ...................................................................... 7
The Market Analysis ........................................................................................................... 9
Concluding Observations ............................................................................................................... 13
Figures
Figure 1. Incremental Life-Cycle GHG Emissions Attributable to Oil Sands Crudes
Compared to a Reference Crude ................................................................................................... 5
Contacts
Author Contact Information........................................................................................................... 15
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Keystone XL: Greenhouse Gas Emissions Assessments in the Final Environmental Impact Statement
Background
In 2008—and again in 2012—the Canadian company TransCanada submitted to the U.S.
Department of State an application for a Presidential Permit authorizing construction and
operation of pipeline facilities to import crude oil across the U.S.-Canada border. The proposed
Keystone XL Pipeline project (the project) would transport crude oil derived from Canadian oil
sands1 deposits in Alberta, as well as crude oil produced from the Bakken region in North Dakota
and Montana, to a market hub in Nebraska for further delivery to U.S. Gulf Coast refineries.
A decision to issue or deny any Presidential Permit for a pipeline project that would cross a U.S.
border is conditioned on the State Department’s determination that the proposal would serve the
national interest. Whether or not a proposal would be deemed to serve the national interest
depends on numerous factors. For the project, the State Department has indicated it will look
specifically at factors related to energy security; foreign policy; and environmental, social, and
economic impacts, as well as whether the project, as proposed, would comply with relevant
federal regulations.
With regard specifically to the assessment of the project’s potential environmental and cultural
impacts, the State Department prepared an environmental impact statement (EIS) as required
under the National Environmental Policy Act (NEPA).2 A draft EIS (DEIS) was released for
public comment on March 1, 2013, followed by a final EIS (FEIS) on January 31, 2014.3 The
FEIS identifies anticipated direct and indirect impacts of the project, as proposed by
TransCanada, as well as various project alternatives, including a “no action” alternative (i.e.,
impacts associated with denying TransCanada’s permit application). Among the various
environmental impacts identified in the FEIS are those involving GHG emissions.
1 The resource has been referred to by several terms including “oil sands,” “tar sands,” and, most technically,
“bituminous sands.” This report uses the term “oil sands” because of its widespread use in both U.S. government
agency and academic literature. Oil sands are formations of loose sand or consolidated sandstone containing naturally
occurring mixtures of sand, clay, water, and a dense and extremely viscous form of petroleum called “bitumen.” This
report uses the term “oil sands crudes” as an abbreviation for all crude oils that are derived from oil sands bitumen in
the Western Canadian Sedimentary Basin (WCSB). Further, the term “reference crudes” is used as an abbreviation for
all other global crude oil resources against which the oil sands crudes are compared. Most reports suggest that the form
of oil sands crude that would likely be transported through the proposed pipeline is “diluted bitumen,” or “dilbit.”
Dilbit is bitumen that is blended with lighter hydrocarbons, typically natural gas condensates, to create a lighter, less
viscous, and more easily transportable material. For more discussion on the resource, see CRS Report R42611, Oil
Sands and the Keystone XL Pipeline: Background and Selected Environmental Issues, coordinated by Jonathan L.
Ramseur.
2 For more discussion on NEPA procedures, see CRS Report RL33152, The National Environmental Policy Act
(NEPA): Background and Implementation, by Linda Luther.
3 U.S. Department of State, Final Supplemental Environmental Impact Statement for the 2012 Presidential Permit
application for the proposed Keystone XL pipeline, January 31, 2014, at http://www.keystonepipeline-xl.state.gov/;
The State Department refers to draft and final EISs prepared for TransCanada’s 2012 Presidential Permit application as
“supplementary” EISs. This was done to indicate that the documents supplement the FEIS prepared for TransCanada’s
2008 Presidential Permit application that was denied by the State Department in 2012. TransCanada’s submission of a
new permit application in 2012 initiated a new federal action subject to NEPA. While the State Department may have,
in fact, supplemented a previous NEPA document, the EISs prepared for the 2012 Presidential Permit application are
not “supplemental” EISs, as defined in regulations implementing NEPA (see 40 C.F.R. §1502.9(c)). As a result, CRS
does not use the term “supplementary” when referring to EISs prepared for the 2012 Presidential Permit. For further
information about the NEPA process for the 2008 and 2012 Presidential permit applications, see CRS Report R41668,
Keystone XL Pipeline Project: Key Issues, by Paul W. Parfomak et al.
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Keystone XL: Greenhouse Gas Emissions Assessments in the Final Environmental Impact Statement
On June 25, 2013, President Obama announced a national “Climate Action Plan” to reduce
emissions of carbon dioxide (CO2) and other greenhouse gases (GHG), as well as to encourage
adaptation to climate change.4 During his speech, the President made reference to the proposed
Keystone XL Pipeline, and stated that an evaluation of the project’s impact on climate change
would factor into the State Department’s national interest determination:
Allowing the Keystone pipeline to be built requires a finding that doing so would be in our
nation’s interest. And our national interest will be served only if this project does not
significantly exacerbate the problem of carbon pollution. The net effects of the pipeline’s
impact on our climate will be absolutely critical to determining whether this project is
allowed to go forward.5
Both supporters and opponents of the proposed Keystone XL Pipeline project reacted positively
to the President’s comments, signaling that an assessment of the net effects of the project’s impact
on the climate—as well as the significance of those effects—is still under intense debate.
The State Department’s GHG Emissions Assessment
The effects of the proposed Keystone XL Pipeline project on climate change may be analyzed, in
part, by an assessment of the GHG emissions attributable to the project. Such an analysis could
encompass a variety of activities and implications relative to the project, including the GHG
emissions associated with the proposed pipeline’s construction and operation. A broader scope
could include an analysis of the GHG emissions attributable to the production and use of the
crude oils that would be transported through the pipeline. Any assessment would depend on many
factors, most notably the availability and quality of GHG emissions data for the industry, the
scope of industry activities included within the assessment, and the assumptions made about how
to model these activities. Many secondary considerations—for which projections have even
greater uncertainty—may also impact an assessment. These include projections regarding global
crude oil markets, refinery inputs and outputs, transport options, policy considerations, and the
end-use consumption of petroleum products. Different values attached to these varying factors
return different estimates for the GHG emissions attributable to the operation of the project, as
well as the production and use of the crude oils transported through it.
Reported Findings
A number of publicly available studies have attempted to assess the GHG emissions attributable
to the production and use of crude oils derived from Canadian oil sands deposits. The State
Department, in the FEIS for the Keystone XL Pipeline project, has produced one such
assessment. The FEIS includes an analysis of (1) the GHG emissions associated with the
construction and operation of the proposed Keystone XL Pipeline (i.e., the impacts of issuing a
Presidential Permit); (2) the GHG emissions associated with using other transport options (i.e.,
impacts of denying the permit application); and (3) the GHG emissions attributable to the
4 For an analysis of the Obama Administration’s Climate Action Plan, see CRS Report R43120, President Obama’s
Climate Action Plan, coordinated by Jane A. Leggett.
5 White House, “Remarks by the President on Climate Change,” Georgetown University, Washington, DC, June 25,
2013, http://www.whitehouse.gov/the-press-office/2013/06/25/remarks-president-climate-change.
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Keystone XL: Greenhouse Gas Emissions Assessments in the Final Environmental Impact Statement
production and use of the oil sands crudes that would be transported to market, regardless of the
transport option assumed.
The State Department characterizes the GHG emissions attributable to the construction and
operation of the project (as well as the alternatives to the project) as “direct and indirect GHG
emissions.” These values are generated by calculating GHGs emitted during fugitive releases,
land use changes, and fuel use for construction, maintenance, and inspection vehicles (direct
emissions), as well as off-site electricity generation for power purposes (indirect emissions).
Further, the State Department defines the GHG emissions attributable to the production and use
of the oil sands crudes that would be transported through the project as “indirect life-cycle GHG
emissions.” This value is generated by examining the full GHG emissions profile of oil sands
crudes (i.e., the aggregate GHG emissions released by all activities from the extraction of the
resource to the refining, transportation, and end-use combustion of refined fuels). In addition, the
FEIS reports estimates for the “incremental indirect life-cycle GHG emissions” of the oil sands
crudes. This value is generated by comparing the emissions profile of the oil sands crudes to
those of other comparable crudes it may displace in U.S. refineries, and then estimating the
difference between a scenario where the project is constructed and a scenario where it is not.
Based on a review of the available GHG emissions data, as well as an analysis of North American
crude oil transport infrastructure and global crude oil markets, the FEIS concludes the following:6
1. The project would emit approximately 0.24 million metric tons of carbon dioxide
(CO2) equivalents (MMTCO2e)7 during the construction period and 1.44
MMTCO2e per year during normal operations.
2. The total life-cycle GHG emissions attributable to the production, refining, and
combustion of 830,000 barrels per day (bpd) of oil sands crude transported
through the proposed pipeline are approximately 147 to 168 MMTCO2e per year.
3. The range of incremental life-cycle GHG emissions attributable to the oil sands
crudes that would be transported through the proposed pipeline is estimated to be
1.3 to 27.4 MMTCO2e per year over and above the life-cycle GHG emissions
attributable to the crude oils expected to be displaced in U.S. refineries.8
4. As projected in the market analysis, “approval or denial of any one crude oil
transport project, including the proposed project, is unlikely to significantly
impact the rate of extraction in the oil sands or the continued demand for heavy
crude oil at refineries in the United States based on expected oil prices, oil-sands
supply costs, transport costs, and supply-demand scenarios.”
Overall, the reported findings in the FEIS are similar to those given in the DEIS released in
March 2013. There are, however, a few changes in the methodology, the presentation of the data,
and the emphasis on the key findings.9 For a detailed review of the DEIS, see CRS Report
6 FEIS, pp. ES-15, ES-16, 4.14-39.
7 “Carbon dioxide equivalent” is a metric used to compare emissions of various greenhouse gases based upon their
global warming potential as indexed against one unit of carbon dioxide.
8 The estimated range of potential emissions is large because it incorporates many technical variables including
different studies and different reference crudes used for comparison.
9 Changes are noted, where significant, in the analysis that follows.
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Keystone XL: Greenhouse Gas Emissions Assessments in the Final Environmental Impact Statement
R43180, Keystone XL: Greenhouse Gas Emissions Assessments in the Draft Environmental
Impact Statement, by Richard K. Lattanzio.
Methodology
The range of incremental GHG emissions for crude oil that would be transported by the
proposed project is estimated to be 1.3 to 27.4 MMTCO2e annually ...10
How does the State Department calculate this estimate, and what does it say about the climate
change impacts of the project?
Life-cycle assessments. The State Department calculates the GHG emissions attributable to the
production and use of the oil sands crudes transported through the proposed pipeline by
developing a “life-cycle assessment” of the Canadian oil sands resource. Life-cycle assessment
(LCA) is an analytic method used for evaluating and comparing the environmental impacts
associated with supplying a useful product (in this case, the climate change implications of a
petroleum resource). LCAs can be used in this way to identify, quantify, and track emissions of
carbon dioxide and other GHG emissions arising from the entire life-cycle of the resource (i.e.,
from extraction through combustion), and to express them in a single, universal metric of carbon
dioxide equivalent (CO2e) GHG emissions per unit of fuel or fuel use. This figure is commonly
referred to as the “emissions intensity” of the fuel.
Emissions intensity of the oil sands. The State Department employs the results of a number of
publicly available studies that have attempted to assess the life-cycle GHG emissions intensity of
oil sands crudes, including four primary LCAs: Jacobs Consultancy 2009, TIAX LLC 2009, U.S.
Department of Energy, National Energy Technology Laboratory (NETL) 2008, and NETL 2009.11
These four studies report generally that (1) oil sands are heavier and more viscous than lighter
crude oil types on average, and thus require more energy- and resource-intensive activities to
extract, and (2) oil sands are chemically deficient in hydrogen and have a higher carbon, sulfur,
and heavy metal content than lighter crude oil types on average, and thus require more processing
to yield consumable fuels by U.S. standards. However, the four studies use different design
parameters, input assumptions, and industry data to model the GHG emissions intensities from
the production and use of oil sands crudes. Thus, each returns different estimates. As one
example, the U.S. Department of Energy’s assessment (NETL 2009) looks at both oil sands
mining and in situ production techniques,12 and examines the GHG emissions profiles for the
extraction, transportation, refining, and use of these crudes into gasoline, diesel, and jet fuel
products. NETL reports the average GHG emissions intensity of oil sands crudes to be equivalent
to 106.3 grams of carbon dioxide equivalent for each megajoule of energy released by its
combustion as gasoline (gCO2e/MJ LHV gasoline). NETL compares this result to a baseline value
10 FEIS, p. ES-15.
11 The FEIS focuses on four primary life-cycle assessments: Jacobs Consultancy, Life Cycle Assessment Comparison of
North American and Imported Crudes, 2009 (Jacobs 2009); TIAX LLC, Comparison of North American and Imported
Crude Oil Lifecycle GHG Emissions, 2009 (TIAX 2009); National Energy Technology Laboratory, Development of
Baseline Data and Assessment of Life Cycle Greenhouse Gas Emissions of Petroleum-Based Fuels, November 26,
2008 (NETL 2008); and NETL, An Evaluation of the Extraction, Transport and Refining of Imported Crude Oils and
the Impact of Life Cycle Greenhouse Gas Emissions, March 27, 2009 (NETL 2009).
12 Oil sands are produced through two primary extraction methods: conventional strip-mining (“mining”) and
steam/solvent-assisted drilling (“in situ”). For a description of the various extraction processes, see CRS Report
R42537, Canadian Oil Sands: Life-Cycle Assessments of Greenhouse Gas Emissions, by Richard K. Lattanzio.
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Keystone XL: Greenhouse Gas Emissions Assessments in the Final Environmental Impact Statement
of 91 gCO2e/MJ LHV gasoline, which it reports as “the weighted average of transportation fuels
sold or distributed in the United States in 2005.”13
Overall, the four LCAs return emissions estimates for several different types of oil sands
production techniques in the range of 101-120 gCO2e/MJ LHV gasoline. The State Department
uses these results to report that oil sands crudes “are generally more GHG intensive than other
heavy crudes they would replace or displace in U.S. refineries, and emit an estimated 17 percent
more GHGs on a lifecycle basis than the average barrel of crude oil refined in the United States in
2005.”14
Figure 1 presents one estimate of the incremental GHG emissions attributable to oil sands crudes
over emissions from a comparable reference crude.
Figure 1. Incremental Life-Cycle GHG Emissions Attributable to Oil Sands Crudes
Compared to a Reference Crude
Source: U.S. Department of State, Final Environmental Impact Statement for the Keystone XL Pipeline Project,
January 31, 2014, p. ES-16.
13 This baseline is from NETL 2008. It assesses “the average life cycle GHG profile for transportation fuels sold or
distributed in the United States in 2005 (p. ES-5). The baseline value is consistent with the definitions for “baseline
life-cycle greenhouse gas emissions” as used in the Energy Independence and Security Act (EISA) of 2007 and the
U.S. Renewable Fuel Standards Program of 2010.
14 FEIS, p. ES-15.
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Keystone XL: Greenhouse Gas Emissions Assessments in the Final Environmental Impact Statement
Total emissions through the proposed pipeline. Using the emissions estimates from the four
LCAs (with some additional calculations),15 the FEIS determines a value for the total, or “gross,”
GHG emissions that would be attributable to the crude oils transported through the proposed
pipeline. The FEIS reports that “the total life-cycle emissions attributable to the production,
refining, and combustion of 830,000 [barrels per day] of oil sands crude ... is approximately 147
to 168 MMTCO2e per year.”16
Incremental emissions through the proposed pipeline. Assuming a scenario wherein the oil
sands crudes transported through the proposed pipeline would displace an equivalent volume of
other crude oils currently processed at the Gulf Coast refineries, the FEIS uses the emissions
estimates from the four LCAs to compare the profiles of Canadian oil sands crudes against three
reference crudes available to Gulf Coast refineries: Venezuelan Bachaquero, Mexican Maya, and
Middle Eastern Sour. In each case, the GHG emissions profile for oil sands crudes is higher than
that of the reference crude. Based on the data, the FEIS reports that “the range of incremental
GHG emissions attributable to the oil sands crude that would be transported through the proposed
pipeline is estimated to be 1.3 to 27.4 MMTCO2e per year” over and above the GHG emissions
attributable to the crude oils expected to be displaced in U.S. refineries.17
GHG equivalencies of the incremental emissions.18 The FEIS reports that the incremental
emissions are equivalent to “annual GHG emissions from combusting fuels in approximately
270,833 to 5,708,333 passenger vehicles, the CO2 emissions from combusting fuels used to
provide the energy consumed by approximately 64,935 to 1,368,631 homes for one year, or the
annual CO2 emissions of 0.37 to 7.8 coal-fired power plants.”19 EPA reports total domestic GHG
emissions for all sectors in 2012 to be 6,502 MMTCO2e, thus making the incremental emissions
attributable to the project comparable to 0.02%-0.4% of U.S. annual emissions.20
Market analysis. The FEIS notes that the reported emissions do not consider the effects of
market dynamics, stating that “the incremental emissions estimate represents the potential
increase in GHG emissions attributable to the proposed pipeline if it is assumed that approval or
15 Responding to comments received on the DEIS, the FEIS attempts to correct for some modeling deficiencies and
data gaps that exist in the four reference LCAs, including (1) emissions from land use and land use changes, (2) co-
product emissions, (3) offset credits when those co-products are consumed off-site, and (4) updated statistics for the
weighted average of the oil sands export mix and production efficiencies.
16 FEIS, Appendix U, p. 87. The designed capacity of the proposed pipeline is 830,000 bpd. The DEIS did not report a
value for the total, or “gross,” GHG emissions that could be attributable to the crude oils transported through the
proposed pipeline.
17 FEIS, Appendix U, p. 87. The estimated range of potential emissions is large because it incorporates many technical
variables including different studies and different reference crudes used for comparison.
18 The FEIS GHG equivalencies are generated using the U.S. Environmental Protection Agency’s “Greenhouse Gas
Equivalencies Calculator,” http://www.epa.gov/cleanenergy/energy-resources/calculator.html.
19 FEIS, pp. ES-15, 4.14-39. For comparison, the equivalences for the total, or gross, GHG emissions estimates of 147
to 168 MMTCO2e per year are the annual GHG emissions from combusting fuels in approximately 30,625,000 to
35,000,000 passenger vehicles, the CO2 emissions from combusting fuels used to provide the energy consumed by
approximately 7,342,657 to 8,391,608 homes for one year, or the annual CO2 emissions of 41.6 to 47.6 coal-fired
power plants.
20 The full range of life-cycle GHG emissions attributable to the oil sands crudes transported through the project would
not necessarily be counted in EPA’s domestic inventory, as some of the production emissions would occur in Canada
and some of the combustion emissions from the refined fuels would potentially occur in other countries. These
percentages are given in this report to serve as a comparison. EPA, Draft Inventory of U.S. Greenhouse Gas Emissions
and Sinks, 1990-2012, http://www.epa.gov/climatechange/ghgemissions/usinventoryreport.html.
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denial of the proposed pipeline would directly result in a change in production of 830,000 bpd of
oil sands crudes in Canada ... However, such a change is not likely to occur under expected
market conditions.”21 The FEIS examines several market scenarios and concludes that under the
most likely conditions, “approval or denial of any one crude oil transport project, including the
proposed project, is unlikely to significantly impact the rate of extraction in the oil sands or the
continued demand for heavy crude oil at refineries in the United States.”22
Operational emissions. The FEIS also calculates GHG emissions resulting from the construction
and the annual operation of the project. It reports construction emissions of 0.24 MMTCO2e (due
to land use changes, electricity use, and fuels for construction vehicles) and pipeline operation
emissions of 1.44 MMTCO2e/year (due to electricity for pumping stations, fuels for maintenance
and inspection vehicles, and fugitive emissions).23 Operational estimates are commonly included
in many life-cycle assessments (including those referenced in the FEIS); thus, the State
Department does not incorporate these reported values into the value for the total life-cycle GHG
emissions for the project. However, given that the State Department investigates the potential
impacts for various project alternatives—including a “no action” alternative—the FEIS compares
the operational GHG emissions from the project to various transportation alternatives such as rail,
rail and pipeline, and rail and tanker. The FEIS reports the annual operational emissions attributed
to the no action alternatives to range from 28%-42% greater than for the proposed project.
Evaluation Considerations
Both the GHG emissions assessment and the crude oil market analysis in the FEIS are models.
Each model must consider many variables and uncertainties in available data to arrive at an
estimate. A review of some of these uncertainties is provided below.
The Life-Cycle GHG Emissions Assessment
Oil Sands Assessment. The State Department references third-party sources for the raw data on
the GHG emissions intensities of oil sands crudes. Thus, the FEIS is less an independent and
original assessment than a comparative analysis of multiple other studies, each presenting
significant variations in both reported findings and input assumptions. Life-cycle assessment has
emerged as an influential methodology for collecting, analyzing, and comparing the GHG
emissions and climate change implications of various hydrocarbon resources. However, because
of the complex life-cycle of fuels and the large number of analytical design features that are
needed to model their emissions, LCAs retain many uncertainties. The NETL 2009 LCA—from
which the State Department sources many of the estimates for oil sands crudes—has very specific
design parameters and input assumptions. The LCA is also five years old and utilizes certain data
that are almost 10 years old (e.g., GHG emissions intensities of the oil sands crudes are compared
against a 2005 U.S. baseline). Opponents to the Keystone XL Pipeline are critical of many of the
exclusions in the NETL 2009 LCA, including the tightly delimited system boundaries and the
omission of co-product emissions (e.g., petroleum coke).24 The FEIS attempts to correct for some
21 FEIS, Appendix U, p. 88.
22 FEIS, p. ES-16.
23 FEIS, pp. 4.14-15 and 4.14-17.
24 For a detailed analysis of the input assumptions made by the NETL 2009 LCA, see CRS Report R42537, Canadian
Oil Sands: Life-Cycle Assessments of Greenhouse Gas Emissions, by Richard K. Lattanzio.
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technical aspects to the NETL 2009 and other LCAs, but data gaps remain. Conversely,
proponents of the Keystone XL Pipeline point to the many recent advances in energy efficiency
and GHG mitigation technologies that Canadian oil sands producers have made.25 They note also
that the government of Alberta has implemented policies to help mitigate and reduce the GHG
emissions associated with oil sands production. These include (1) a mandatory GHG intensity
reduction program for large industrial emitters,26 (2) a fund for clean energy investment that is
capitalized by the reduction program, and (3) dedicated funding for the construction of large-scale
carbon capture and sequestration (CCS) facilities.27 Proponents suggest that these and other
advances may make the GHG emissions intensity of oil sands crudes more in line with other
reference crudes going forward.
Reference Crudes Assessment. Similarly, assessing the life-cycle GHG emissions intensities of
the reference crudes requires calculations similar to those performed on the oil sands, and thus
harbors many of the same uncertainties. Complicating this analysis, the quality of the data and the
transparency in presentation for many of the global reference crudes are not as robust as data on
the oil sands. Some, even, have yet to be fully modeled (e.g., Bakken tight oil). This is primarily a
function of changing conditions as well as the difficulty in accessing necessary data from the
field. A lack of equivalence can impede the ability to make meaningful comparisons.
Comparisons are also complicated by the fact that emissions factors for Canadian oil sands crudes
and reference crudes will change over time, and it is not clear how these changes will impact their
respective GHG emissions. On one hand, secondary and tertiary recovery techniques will become
more common in conventional oil, increasing the GHG emissions of reference crudes. In contrast,
oil sands surface mining is expected to have a relatively constant energy intensity for a long
period of time, and in situ techniques may be expected to become more efficient. Exploration for
new oil reservoirs will also continue (with the possibility of commercializing both greater and
lesser emissions-intensive resources), while the location and extent of Canadian oil sands is
generally well understood.
Displacement Analysis. A determination of which reference crudes would be displaced at Gulf
Coast refineries is left open by the State Department’s analysis, as the FEIS reports a range of
values for several different scenarios. Different LCAs make different assumptions regarding the
effects of Canadian oil sands development on the production of other global crudes. For example,
NETL 2009 assumes that resources from Venezuela or Mexico may likely be the first displaced
by Canadian oil sands crudes at U.S. refineries. However, to the extent that a crude like Saudi
Light (i.e., Middle Eastern Sour) is the world’s balancing crude, NETL also suggests that it may
ultimately be the resource backed out of the global market by increased Canadian oil sands
production. Many factors—from economics to geopolitics to trade issues—could influence the
balance of global petroleum production. Incremental global GHG emissions would vary greatly
depending upon this calculus.
25 For examples, see CAPP, “Oil Sands Today: GHG Emissions,” http://www.oilsandstoday.ca/topics/ghgemissions/
Pages/default.aspx.
26 See Government of Alberta, Climate Change and Emissions Management Amendment Act,
http://www.qp.alberta.ca/574.cfm?page=2007_139.cfm&leg_type=Regs&isbncln=9780779738151.
27 Government of Alberta, Alberta’s Oil Sands Fact Sheet: Carbon Capture and Storage,
http://www.oilsands.alberta.ca/FactSheets/Carbon_Capture_FSht_June_2012_Online.pdf.
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The Market Analysis
The FEIS references several third-party market forecasts for current and future market conditions.
These include analyses from the U.S. Department of Energy, Energy Information Administration
(EIA), the Canadian Association of Petroleum Producers (CAPP), Canada’s National Energy
Board (NEB), and the International Energy Agency (IEA).28 Analysis focuses on crude oil prices,
production volumes, refinery inputs, and consumer demand, and assesses how changes in these
variables may impact oil sands development. The forecasts reach out to the period 2035-2040. In
each, the “business-as-usual” scenario for Canadian oil sands producers is one in which “the
industry and market react based on normal commercial incentives.”29 Thus, each forecast
generally assumes that projects currently proposed, approved, and under construction will go
forward, and that adequate takeaway capacity (e.g., the proposed Keystone XL Pipeline project)
will be available to oil sands producers over time. Estimating the effects of not constructing
adequate pipeline takeaway capacity becomes the “counterfactual” scenario the FEIS must
calculate. Thus, instead of modeling how the construction of the proposed pipeline might affect
the short- to medium-term growth of the industry, the State Department models instead how
industry and market forces may react to the denial of the project over the long term.
Using this approach, the FEIS models 16 different scenarios that combine various supply-demand
assumptions and pipeline constraints, including ones wherein there is a potential higher-than-
expected U.S. supply, lower-than-expected U.S. demand, and higher-than-expected oil production
in Latin America. The FEIS finds generally that the most likely scenario for oil sands crudes is
one of steady to rising global oil prices, diminishing transportation constraints, decreasing
production costs, and continued demand in U.S. Gulf Coast refineries. With this analysis, the
FEIS concludes that if the proposed pipeline is denied, the rate of development in the oil sands is
unlikely to be substantially impacted because the market would respond by adding broadly
comparable transport capacity over time. The State Department bases this conclusion on three
projections: (1) the crude oil input mix at Gulf Coast refineries remains constant, (2) rail and
other non-pipeline transport options would fully accommodate all projected growth in oil sands
production, and (3) at no point would the global price of oil fall—or the marginal cost of
production increase—such that investment in new oil sands projects would be deemed
uneconomical (i.e., below the breakeven price for production).
The Demand Argument. The FEIS reports that “approval or denial of any one crude oil transport
project, including the proposed project, is unlikely to significantly impact ... the continued
demand for heavy crude oil at refineries in the United States.”30 The State Department supports
this analysis with several projections, including (1) no new capacity would be added or installed
on the Gulf Coast to refine additional crude oils made available by increased North American
supply,31 (2) oil refineries optimized for heavy crudes would process only heavy crudes, (3) oil
28 U.S. Energy Information Administration, Annual Energy Outlook with Projections to 2040. DOE/EIA-0383, 2013;
Canadian Association of Petroleum Producers, Crude Oil Forecast, Markets, and Pipelines, June 2013; National
Energy Board, Canada’s Energy Future: Energy Supply and Demand Projections to 2035, 2011; and International
Energy Agency, World Energy Outlook, 2013.
29 FEIS, p. 1.4-9.
30 FEIS, p. ES-16.
31 The DEIS notes that U.S. refinery throughput has remained constant over recent years, stating that “U.S. refineries
have not materially changed.” DEIS, 1.4-14. The FEIS does not comment on historical trends in U.S. refinery capacity.
EIA data report “U.S. gross inputs to refineries” and “operable utilization rate” as only slightly increasing since 2010,
http://www.eia.gov/dnav/pet/pet_pnp_unc_dcu_nus_m.htm.
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sands imports would displace only other heavy imports, and (4) any growing domestic light oil
production from tight oil plays—in the Bakken, the Eagle Ford, or others—would displace only
light crude imports.32 Further, the FEIS determines that the projected drop-off in U.S. tight oil
production by the mid-2020s would dissuade Gulf Coast refiners optimized for processing
heavier crudes from switching.33
Other analysts argue that increased transport of oil sands crudes out of Canada would not simply
displace other crudes but could serve to optimize operating capacity at Gulf Coast refineries or
even encourage an expansion in investments. They maintain that any additional production
capacity (of oil sands crudes or others) would not simply substitute for current levels, but add to
them, increasing the incremental, or “net,” GHG emissions attributable to the proposed pipeline.
Similarly, some commentators have pointed to recent reports that suggest that domestic light oil
production (e.g., Bakken, Eagle Ford) is not only backing out imported light crudes but also
displacing the market for heavier crudes.34 Further, this displacement may traverse the entire
supply chain for North American petroleum infrastructure, from refinery inputs to transport
capacity to investment in production facilities. They contend that this switch, even in the short to
medium term, could have substantial impacts on the use of oil sands crudes in U.S. refineries and
the GHG emissions attributable to the sector.35
The Capacity Argument. The State Department reports that while no new pipeline capacity has
been added from Canada into the United States since 2011, a number of projects are proposed or
in development, specifically those entailing modifications and/or use of existing rights-of-way
(e.g., Enbridge’s Alberta Clipper expansion).36 Further, the FEIS points out that many interstate
pipelines that do not cross international borders face less regulatory review (e.g., the Enbridge
Flanagan South and Trunkline conversion, among others), and that their development “would
directly support the export of [oil sands] crudes and/or move [oil sands] and Bakken crudes to
destination markets.”37 Nevertheless, for the purposes of its analysis, the State Department
examines scenarios for transporting all new production of oil sands crudes by rail and other non-
pipeline transport options. It surmises that scaling up transport is logistically and economically
feasible, based on past and present evidence in the Powder River Basin and the Bakken,38 as well
32 The FEIS supports this analysis with 2013 data from EIA showing decreasing volumes of light crude imports at Gulf
Coast refineries while heavy crude imports remain robust. The FEIS states, “growing domestic light crude production is
backing out (reducing) light imports,” and “refiners optimized for crude slates that use heavy crudes still have demand
for heavy crude and continue to meet that demand through imports.” Thus, “refiners’ preferences for heavier crudes
appear to be enduring despite rising domestic light supplies.” FEIS, p. 1.4-22.
33 The FEIS reports that “[U.S.] crude production is expected to grow further in the coming years, but there is
uncertainty about how high supplies will go and how long they will remain elevated,” and that “most forecasts ...
expect U.S. production growth to be driven by light, tight oil and to peak between 2019 and 2025 before starting to
decline.” FEIS, pp. 1.4-14-15.
34 EIA has recently noted that U.S. tight oil could be priced at such a sustained discount that it would be “sufficient to
encourage its use in refineries along the Gulf Coast that are optimized for heavier crudes.” EIA, “This Week in
Petroleum,” May 1, 2013.
35 Natural Resources Defense Council et al., “Request for Supplemental Environmental Impact Statement for the
TransCanada Keystone XL Pipeline Based on Significant New Information,” submitted to the U.S. Department of
State, June 24, 2013, p. 10.
36 FEIS, p. 1.4-45. The FEIS also recognizes that some proposed projects (e.g., the Enbridge Northern Gateway project
and the Kinder Morgan Trans Mountain expansion) “face significant opposition from various groups, and ... may
continue to be delayed.” It should be noted that the Alberta Clipper expansion also requires a Presidential Permit.
37 FEIS, p. 1.4-46.
38 Increases in rail shipment in the Bakken have grown from approximately 50,000 bpd in December 2010 to 700,000
(continued...)
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as the oil sands region itself.39 Given the identified commercial demand for oil sands crudes in
Gulf Coast refineries, the FEIS concludes that “rail will likely be able to accommodate new
production if new pipelines are delayed or not constructed.”40
Other analysts, however, are skeptical of rail’s ability to accommodate all new production in the
oil sands. They contend that expansion would require significant infrastructure development,
including loading and unloading facilities, rail network capacity, and specialized tank car
availability.41 The International Energy Agency (IEA) has reported that the failure to build needed
oil sands pipelines—particularly Keystone XL—could result in “persistent price discounts and
slow expansion of the sector.”42 A similar short- to medium-term reduction is supported by other
market analyses of the oil sands (e.g., CIBC, TD Economics, Goldman Sachs).43 Most of the
third-party market analyses do not report conditions for the medium to long term, as some assume
that transport logistics would be worked out by the market in the long term, and others do not
speculate.
The Cost Argument. To assess the potential impact of increased supply costs on the oil sands
production (whether transportation costs or others), the State Department reviews information
regarding “breakeven prices” for different types of oil sands projects. The “breakeven price” is
(...continued)
bpd in mid-2013. In comparing Western Canada to the Bakken, the FEIS notes that “although they followed different
trend lines, total shipments in each area increased to roughly 150,000 bpd over the first 24 months of their respective
crude-by-rail growth periods.” FEIS, p. 1.4-6.
39 Reports by the two major rail operators in Canada, Canadian National (CN) and Canadian Pacific Railway System
(CPRS), indicate crude and fuel oil car-loadings in Western Canada increased from nominal amounts in early 2011 to
approximately 160,000 bpd by April 2013 (however, “not all of the crude oil loaded by rail in western Canada is
necessarily exported to the United States,” and “approximately half of the crude oil hauled by rail in western Canada
was light, and half was heavy.” FEIS, pp. 1.4-52-56. Further, crude-by-rail loading facilities have expanded
considerably in the past several years, with capacity expected to reach 720,000 bpd in WCSB by the end of 2014. FEIS,
p. 1.4-61. The analysis also determines that the expansion of rail network capacity and rail tank car fleets could be
accommodated without encountering capacity issues. FEIS, pp. 1.4-74, 1.4-80.
40 FEIS, p. 1.4-8. Most of the transport analysis in the FEIS focuses on the possibility for long-run impacts; however, in
light of comments provided to the DEIS, the FEIS also reviews assertions on short- to medium-term impacts. While the
DEIS granted that “if the rate of production is substantially higher than indicated in the CAPP 2012 forecast, and if
there are delays in the delivery of new rail cars and terminals ... it is possible that some short-term shut-in of WCSB
heavy crude could occur” (DEIS, p. 1.4-48), the FEIS concludes instead that “the extensive rail data in Section 1.4.3,
Crude Oil Transportation, indicate that pipeline constraints are unlikely to significantly affect oil sands production in
the short run.” FEIS, p. 1.4-134.
41 The FEIS assesses the scenarios for infrastructure development at length in its market analysis. Critics of the FEIS’s
analysis, however, argue that comparisons of the WCSB’s development to the Bakken’s are not merited, as significant
differences exist between the two resources (e.g., Bakken oil is closer, lighter, and does not require special equipment
or handling; further, rail cars carrying oil sands cost more to run because they must be heated, and they cannot carry as
much because the oil is much heavier than typical crude). As for comparisons with the Powder River Basin, many
differences exist between current global crude oil markets and historical coal markets with respect to production and
consumption, which may problematize this comparison. For a detailed analysis of current issues involved in crude oil
transportation by rail, see CRS Report R43390, U.S. Rail Transportation of Crude Oil: Background and Issues for
Congress, by John Frittelli et al.
42 International Energy Agency, “Medium-Term Oil Market Report,” May 14, 2013.
43 Canadian Imperial Bank of Commerce, “Too Much of A Good Thing: A Deep Dive Into The North American
Energy Renaissance,” Institutional Equity Research Industry Update, August 15, 2012; TD Economics, “Pipeline
Expansion is a National Priority,” Special Report, December 17, 2012; Goldman Sachs, “Getting the Oil Out of
Canada: Heavy Oil Diffs Expected to Stay Wide and Volatile,” June 2, 2013. Goldman Sachs estimates that rail
capacity would peak at 500,000 bpd over the next three to four years, further noting that most of the current and future
shipments from Western Canada would be light crude oil, not oil sands crudes (p. 15).
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often expressed as the lowest price of a benchmark crude that is necessary to enable a potential
oil sands project to cover all its costs and earn a commercial rate of return on capital employed—
typically 10%-15%. A long-term increase in supply costs acts as an increase in the breakeven
price for producers.44 The State Department posits that if the supply costs for new oil sands
projects were to rise above the benchmark price for an extended period of time, conditions would
lend themselves to a potential decrease in oil sands production and a dampening of future
investment. To assess the likelihood of this scenario, the State Department references a range of
third-party reports for new oil sands projects.45 The FEIS harmonizes these data, conjoins them
with existing project costs, and reports supply costs at $65-$70 per barrel for in situ crude; $80-
$85 per barrel for mining (without upgrader);46 and $90-$100 per barrel for mining (with
upgrading).47 Comparing these supply costs to price projections of benchmark crudes, the State
Department reports the following:
Above approximately $75 per barrel (West Texas Intermediate [WTI]-equivalent), revenues
to oil sands producers are likely to remain above the long-run supply costs of most projects
responsible for expected levels of oil sands production growth. Transport penalties could
reduce the returns to producers and, as with any increase in supply costs, potentially affect
investment decisions about individual projects on the margins. However, at these prices,
enough relatively low-cost in situ projects are under development that baseline production
projections would likely be met even with constraints on new pipeline capacity.48
Other analysts have argued that significantly increased supply costs, decreased oil prices, or
changes to other market variables could have impacts on both oil sands development and GHG
emissions. In recognition of these uncertainties, the FEIS models 16 different scenarios that
combine various supply-demand assumptions and pipeline constraints. Certain scenarios show
that delays in rail development could impact system capacity in the short term.49 Other scenarios
indicate that pipeline constraints could reduce the prices received by oil sands producers by up to
$8 per barrel.50 A final scenario estimates that benchmark crude oil prices of around $65-$75 per
barrel, coupled with heightened transportation costs, “could have a substantial impact on oil sands
production levels.”51
The market analysis in the FEIS is presented separately from the GHG emissions assessment.
Thus, the FEIS does not report numerical estimates for GHG emissions based on any of the
examined market scenarios. By concluding that the most likely scenario is one in which oil sands
44 The FEIS notes that “the terms supply cost and breakeven price are commonly used interchangeably, including in
[the FEIS].” FEIS, p. 1-4.32.
45 New oil sands project supply costs are reported by third-party sources at $43-$82 per barrel for in situ crude; $67-
$100 per barrel for mining (without upgrader); and $83-$103 per barrel for mining (with upgrading). All estimates in
WTI-equivalent $/bbl. Sources include BMO Capital Markets, Canadian Energy Research Institute, Canadian Imperial
Bank of Commerce, Energy Resources Conservation Board, Goldman Sachs, National Energy Board.
46 “Upgrading” refers to a pre-refining process that turns the very heavy hydrocarbons of oil sands crude into lighter
fractions that are more conducive to pipeline transport.
47 FEIS, p. 1.4-36.
48 FEIS, p. 1.4-8. Modeling results in the FEIS indicate that severe pipeline constraints reduce the prices received by
bitumen producers by up to $8 per barrel, but not enough to curtail most oil sands growth plans or to shut in existing
production (based on expected oil prices, oil-sands supply costs, transport costs, and supply-demand scenarios).
49 FEIS, p. 1.4-77.
50 FEIS, p. 1.4-7.
51 FEIS, p. 1.4-8. At publication, spot prices for WTI crude oil were $103.17/bbl (EIA). The prices ranged from $86.65
to $110.62 over the past year. A discussion on oil price volatility or projections is beyond the scope of this report.
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production would be unaffected at expected market conditions, the FEIS implies that the
incremental life-cycle GHG emissions attributable to the oil sands crudes transported through the
proposed pipeline are negligible. In this scenario, the only differences in GHG emissions would
arise from the choice of transportation (e.g., emissions attributable to the annual operation of
pipelines, railways, trucks, or tankers). The FEIS reports that the annual operational emissions for
the “no action” alternatives range are 28%-42% greater than for the proposed project. By
comparison, the March 2013 DEIS reported numerical estimates for its competing scenarios,
estimating the incremental cost of rail over pipeline as $5 per barrel, with a 2%-4% decrease in
oil sands production levels, and an incremental GHG emission reduction of up to 5.3 MMTCO2e
annually.52
Concluding Observations
President Obama has stated that an evaluation of the “net effects of the pipeline’s impact on our
climate” would factor into the State Department’s national interest determination for the proposed
Keystone XL Pipeline in order to determine if the project would “significantly exacerbate the
problem of carbon pollution.”53 The release of the final environmental impact statement (FEIS)
represents one step in the State Department’s evaluation process. The FEIS itself does not include
a recommendation to approve or deny the permit. Instead, its technical assessment and market
analysis will be used to help inform the national interest determination.54
Perhaps not since the Trans-Alaska Pipeline System debate during the Nixon Administration has
international attention focused so heavily on the construction of a petroleum pipeline in the
United States. In the case of the Keystone XL Pipeline, however, the debate has extended well
beyond the direct environmental impacts of the project (e.g., spills, habitat, and, in this instance,
the GHG emissions attributable to the construction and operation of a pipeline). For many, the
impact of the proposed pipeline is tied explicitly to its effect on the rate of development of the
Canadian oil sands, as well as the precedent its approval or denial may set for U.S. energy policy.
Assessing these various perspectives involves complex technical analysis, which is complicated
by an inherent uncertainty in future market projections.
The FEIS analyzes the incremental life-cycle GHG emissions attributable to the production and
use of the oil sands crudes to be transported through the proposed Keystone XL Pipeline, and
estimates them to be up to 27.4 MMTCO2e per year more than the crudes they are expected to
replace in U.S. refineries (i.e., equivalent to the annual emissions from up to 5.7 million
passenger vehicles or 7.8 coal-fired power plants). The FEIS also analyzes a variety of future
market projections for oil sands crudes, and finds the most likely scenario to be one of stable to
rising global oil prices, diminishing transportation constraints, decreasing production costs, and
continued demand for heavy crudes in U.S. Gulf Coast refineries. Under this scenario, the FEIS
concludes that approval or denial of the proposed pipeline is unlikely to have a substantial impact
on the rate of development in the Canadian oil sands, as other transport options would fully
accommodate all projected growth. This market scenario makes the technical GHG assessment in
the FEIS less relevant, as the life-cycle GHG emissions from the production and consumption of
52 DEIS, pp. ES-15, 4.15-106.
53 White House, “Remarks by the President on Climate Change,” op. cit.
54 For a brief summary of the Keystone XL Presidential Permitting process, see CRS Report IF00009, The State
Department Releases Its Final EIS for the Keystone XL Pipeline. What’s Next? (In Focus), by Linda Luther.
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oil sands crudes would occur regardless of the transportation method used to bring the crudes to
market. While this view of market inevitability recognizes significant uncertainty, it concludes
that no combination of reasonable market outcomes would be sufficient to cause delays or
decreases in oil sands production. The only question regarding climate change impacts, in this
view, is whether the alternative transportation methods (e.g., rail, truck, tanker) would contribute
greater or lesser amounts of GHG emissions during operation.
Some analysts disagree with the FEIS assessment and argue that there is nothing presumed or
inevitable about the rate of expansion for the Canadian oil sands.55 This skepticism arises from
the observation that oil sands projects face a challenging financial environment, with upfront
production costs and price differentials comparatively higher than for other crudes, making new
investment sensitive to changes in market fundamentals. They stress that oil market projections
and transportation options are rife with uncertainty, and that the proposed Keystone XL Pipeline
could have a much more significant impact on expansion if a number of key variables differ from
the State Department’s projections. These variables include (a) lower global oil prices than
projected; (b) higher rail costs than projected; (c) higher new project costs than expected; (d)
greater competition from shale oil and tight oil plays; and (e) future carbon pricing or
procurement policies in the United States or Canada. They contend that any decrease or delay in
development could significantly impact the rate of growth in global GHG emissions by allowing
more time for the development of energy-efficiency strategies, the promulgation of climate
policies, and the deployment of lower-carbon energy technologies.
Beyond the debate about the proposed Keystone XL Pipeline’s impacts on oil sands production,
some stakeholders have expressed a broader concern about whether the approval or denial of the
project could set a precedent for U.S. energy policy.56 They argue that while many of the
decisions that may affect the development of the oil sands will ultimately be made by the market
and the national and provincial governments of Canada, the choice of whether or not to approve
the permit for the project is an opportunity for the U.S. government to signal its future direction.
Some stakeholders have pushed for a national energy policy that moves the United States away
from a reliance on fossil fuels. They see the decision to build the proposed pipeline as a 50-year-
long commitment to a carbon-based economy and its resulting GHG emissions.57 Some observers
contend that with meaningful action on climate policy slowed or stalled in Congress, the courts,
and, to some extent, the regulatory agencies (i.e., local, state, and federal environmental and land-
use agencies), the sole remaining outlet to leverage a low-carbon energy policy is single-action
initiatives on such items as infrastructure permits. Many have actively opposed the permit for the
project, believing that it may set a precedent; for if the pipeline is allowed to go forward, they
contend, it may be the case that no future infrastructure project would be held accountable for its
incremental contribution to cumulative GHG emissions.
55 See, for example, Natural Resources Defense Council et al., “Request for Supplemental Environmental Impact
Statement for the TransCanada Keystone XL Pipeline Based on Significant New Information,” Submitted to the U.S.
Department of State, June 24, 2013; Oil Change International, “Cooking the Books: How The State Department
Analysis Ignores the True Climate Impact of the Keystone XL Pipeline,” April 2013; and Rep. Henry Waxman et al.,
“Letter to the Hon. Kerry-Ann Jones,” Submitted to the U.S. Department of State, July 10, 2013.
56 Whether the project would set a precedent or send a signal about U.S. energy policy was not addressed in the FEIS.
57 EPA notes in its comments to the DEIS, given the 50-year lifetime of new infrastructure projects such as the
proposed pipeline, “the additional CO2e from oil sands crude transported by the pipeline could be as much as 935
million metric tons” (the FEIS reports a range of 135-1,430 MMTCO2e). FEIS, p. 4.14-41.
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Others recognize that the project could affect U.S. energy policy by setting a precedent and
sending a signal, but they reach a different conclusion. Many regard the project as one element of
a revitalized energy production sector in North America, and urge that U.S. policy should support
investment in such infrastructure for economic and national security reasons.58 They endorse
decisions and policies that help encourage U.S. “energy independence,” or at least shift U.S.
supply to reliable allies and partners like Canada rather than unreliable sources in the Middle East
and Venezuela. In this view, since Canadian oil sands will be developed regardless of the
transportation mode used, the public policy interest lies in supporting North American energy
suppliers rather than those overseas.
Members of Congress remain divided on the merits of the project, as many have expressed
support for the potential energy security and economic benefits, while others have reservations
about its potential health and environmental impacts. Though Congress, to date, has had no direct
role in permitting the pipeline’s construction, it has oversight stemming from federal
environmental statutes that govern the review. Further, Congress may seek to influence the State
Department’s process or to assert direct congressional authority over approval through new
legislation.
Author Contact Information
Richard K. Lattanzio
Analyst in Environmental Policy
rlattanzio@crs.loc.gov, 7-1754
58 See, for example, Rep. Fred Upton, “Opinion: The Architecture of Abundance: Building Energy Infrastructure,”
Reuters, July 25, 2013.
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