Obama: Keystone XL verdict hinges on its carbon footprint

President Barack Obama on Tuesday put climate change at the center of the heated national debate over the controversial Keystone XL pipeline by insisting in a major policy speech that the project’s fate hinges on how much carbon dioxide it contributes to the atmosphere.

“The net effects of the pipeline’s impact on our climate will be absolutely critical in determining whether this project will be allowed to go forward,” Obama said, during a speech unveiling a broad plan for combating global warming at Georgetown University.

Obama vowed that his administration will only approve the multibillion-dollar pipeline “if this project does not significantly exacerbate the problem of carbon pollution.”

But for environmentalists, oil industry leaders and landowners in the proposed pipeline’s path, Obama’s remarks don’t make a final outcome clear. Some analysts suggested the president was paving the way for approval, based on previous government reports concluding Keystone’s carbon cost isn’t as high as its critics suggest.

The most important finding came from the State Department, which in March concluded that the Keystone XL pipeline was unlikely to cause major changes in the amount of carbon emissions tied to the development of Canada’s oil sands crude. According to State’s environmental analysis, the amount of carbon dioxide emissions tied to oil sands production would drop just 0.83 million metric tons annually if Keystone XL were not built, in contrast to some environmentalists’ warnings that new oil sands development fostered by the project could send 27 million metric tons of greenhouse gases into the air each year.

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But that carbon conclusion was pegged to the State Department’s finding that companies would keep extracting dense bitumen from Canada with or without Keystone XL because other pipelines and trains could transport the hydrocarbon to market. The Environmental Protection Agency, which has its own role evaluating the pipeline, took issue with the State Department’s conclusion and suggested more analysis was needed.

Environmentalists praised Obama for making climate change a decisive factor on Keystone XL but some fretted that unless the State Department changes its conclusion about carbon emissions tied to the pipeline, Obama’s benchmark could mean the project wins approval.

Bill McKibben, the founder of 350.org, said Obama appeared to be setting “an appropriate standard” for reviewing Keystone XL.

“The president is saying what the science has always demanded,” McKibben said. “It’s encouraging news.”

Sen. Barbara Boxer, D-Calif., noted the tension on the issue. While “the president’s commitment today to only approve the tar sands pipeline if there is no net increase in carbon pollution is promising,” she said, “tar sands are one of the dirtiest fuels on the planet and the devil is in the details.”

Bill Snape, with the Center for Biological Diversity, said basing a Keystone XL decision “on the project’s climate dangers” should mean it will be rejected. “Allowing Keystone to move forward would result in more carbon pollution each year than building 50 new coal-fired power plants,” he said. “It’s a no-brainer for the White House to shut down this massive threat to the climate.”

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Similarly, Sierra Club director Michael Brune said Obama’s “strong commitment to using climate pollution as the standard by which Keystone XL will be decided means his decision to reject it should now be easy” since “any fair and unbiased analysis of the tar sands pipeline shows that the climate effects of this disastrous project would be significant.”

(Environmentalists have raised concerns — and the threat of litigation — over whether the State Department’s pipeline review qualifies as “fair and unbiased.”)

Some Republicans and analysts cast Obama’s comments as opening the door to eventual approval.

According to their calculus, if the State Department’s draft environmental assessment is unchanged on carbon impacts, there’s plenty of room to approve the pipeline by citing that as evidence that Keystone XL will not measurably increase carbon emissions.

“The standard the president set today should lead to speedy approval of the Keystone pipeline,” said Brendan Buck, a spokesman for House Speaker John Boehner, R-Ohio. “Based on the lengthy review by the State Department, construction of the pipeline would not have a significant environmental impact.”

In a research note to clients, ClearView Energy Partners noted that the State Department’s State Department’s estimate of incremental greenhouse gas emissions from Keystone XL is lower than those by both the EPA and environmentalists.

“In our view, the president has left the door open to a final approval, and has preserved multiple avenues through it,” ClearView Energy Partners said. “The State Department could determine on its own that the greenhouse gas impacts do not ‘significantly’ exacerbate the nation’s GHG emissions levels or are sufficiently modest relative to other reductions.”

Jack Gerard, president of the American Petroleum Institute, Obama’s “questions about the Keystone XL pipeline have been answered by four comprehensive State Department reviews that have concluded the project will have no significant impact on the environment.”

And Charles Drevna, head of the American Fuel and Petrochemical Manufacturers, said Obama “seems to be finally acknowledging the value of the Keystone XL pipeline.”

“We hope his statement means the State Department will immediately approve the pipeline, since several environmental reviews have concluded that building Keystone XL will lead to fewer greenhouse gas emissions than if we did not build it,” Drevna added.

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Under a nine-year-old executive order, the State Department is tasked with determining whether the project is in the “national interest.” If any one of eight separate federal agencies — including the EPA — disagrees with State’s decision, that would launch a process that would put the final verdict in President Barack Obama’s hands.

The State Department now is working its way through about 1.2 million public comments submitted on its draft environmental study.

TransCanada Corp. first sought approval to build the border-crossing pipeline in 2005. While the northern, border-crossing section of the project is under review, the Calgary company has gone forward with construction of the southern leg of the pipeline.

Environmentalists say that Keystone XL could contribute to climate change by expanding the marketplace for Canada’s oil sands crude. Because the bitumen in Canada’s oil sands is harvested through mining and energy-intensive steam-assisted techniques, it may have a higher carbon footprint than conventional crude.

But pipeline advocates reject opponents’ assertions that diluted bitumen from Canada is significantly dirtier than the crudes from Venezuela and other nations that it would likely displace in Gulf Coast refineries.