We've been fighting the proposed Keystone XL tar sands pipeline for nearly six years now - and
|Joy Bergey and Rob Altenburg (PennFuture), Lena Moffitt (NWF),|
and Chelsea Harnish (Virginia Conservation Network) left to right
In June 2013, in his historic climate speech at Georgetown University, President Obama said that Keystone XL would not be found to be in the national interest if the project “significantly exacerbate[s] the problem of carbon pollution.” Over the past year, it has become increasingly evident that Keystone XL would have a significant impact on destabilizing the climate, and should therefore be rejected. Since the State Department released its Final Environmental Impact Statement in January 2014, reality has demonstrated that Keystone XL is, in fact, key to expanded tar sands developments. Unlike the State Department’s erroneous conclusion, tar sands expansion is not inevitable and is, in fact, dependent on several key factors. Over the past 11 months, we’ve watched a natural experiment unfold, demonstrating what happens when a few key factors turn against the industry’s favor. These factors are detailed below:
- The price of oil plummeted well below the State Department’s estimates. And without high oil prices, extremely expensive tar sands projects quickly become uneconomical. *
- Tar sands oil is not being transported by trains to the extent the State Department predicted. Rail remains an expensive, logistically difficult alternative that has not filled the place of needed pipeline capacity.
- Other pipelines (alternatives to Keystone XL) remain on hold and face increasing opposition, both in Canada and the U.S. From Enbridge’s Northern Gateway, to TransCanada’s Energy East Project, to the Portland-Montreal line, tar sand pipelines face mounting opposition and legal battles wherever they are proposed.
The fact is that with oil prices low, tar sands producers’ profit margins are narrow, and they need cheap pipeline transportation options to get their product to market (transporting tar sands by rail is between 40 percent and up to 150 percent greater than pipeline transport). This means that a major, dedicated tar sands pipeline like Keystone XL, which would lock in cheap transportation for tar sands to the Gulf Coast, would be hugely beneficial to this industry, triggering other projects to move ahead.
And in fact, even the State Department’s FEIS indicated just that. The State Department considered several “scenarios” in its analysis and, under a scenario that looks like what reality has turned out to be – one with low oil prices, low transport of tar sands via rail, and constrained pipeline options – Keystone XL would, in fact, have “substantial impact on oil sands production levels,” and, thus, on the climate.
While the State Department deemed this scenario “unlikely” in February of this year, it is this very scenario that reality has borne out in the interim 11 months. Simply put, even the State Department’s FEIS indicates that Keystone XL will have a significant impact on the climate under circumstances like those we are seeing today.
Given this, along with the President’s resurgent leadership on climate lately (releasing first-ever limits on carbon pollution from our power sector, announcing an historic deal with China to reduce our nations’ economy-wide emissions, sending Secretary Kerry to Lima to forge a global climate agreement), the President is well positioned to seize yet another leadership moment for protecting the climate by rejecting Keystone XL. We certainly hope he does.
* WTI (a crude oil benchmark price) has lost around 40 percent since June. Many tar sands producers are cutting back capital expenditure as a result.
Joy Bergey is PennFuture's federal policy director and is based in Philadelphia. She tweets @joybergey.