Policy: Environment & Energy

State Department gives Keystone XL a passing environmental grade

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The proposed Keystone XL oil sands pipeline would not significantly increase greenhouse gas emissions, the State Department said Friday in a long-awaited environmental report, delivering a victory for the pipeline's boosters and a blow to environmental and left-wing groups that oppose it.

The findings in the final environmental impact statement reaffirmed a draft report released in March 2013. Chiefly, it found that demand would bring oil sands to market with or without TransCanada Corp.'s Keystone XL and that, as a result, the pipeline would not facilitate growth that adds to greenhouse gas emissions.

"The updated market analysis ... concludes that the proposed project is unlikely to significantly affect the rate of extraction in oil sands areas," the report said.

But Kerri Ann Jones, assistant secretary for oceans and international environmental and scientific affairs at State, quickly qualified the report's findings on climate change during a Friday media call.

Asked whether Keystone XL would have a net effect on greenhouse gas emissions, Jones said, "The specific answer that you are looking for — that is not in this document."

The report is one of the final major hurdles to a White House ruling on the Canada-to-Texas pipeline that has been in the State Department's hopper for more than five years.

The report itself isn't a decision on the pipeline. However, it will be used to inform whether building the pipeline is in the national interest — a determination State will make after a 90-day interagency comment period. Given the direction of the review, it appears likely that the agency will view Keystone XL favorably, though Jones said it's just one of many documents involved in the process.

The final decision on Keystone XL will come from the White House. President Obama has said he would reject it if the pipeline "significantly exacerbates the problem of carbon pollution" — which the final report, in line with a draft that Keystone XL opponents criticized, said it wouldn't.

Industry groups urged Obama to green light the pipeline, as they said the report met the president's metric for approval.

"They're running out of reasons to delay this, and they're certainly running out of reasons to even question this," Ross Eisenberg, vice president of energy and resources policy with the National Association of Manufacturers, told the Washington Examiner.

But Sen. John Hoeven, R-N.D., pointed out that the final report is more "vague" than the draft about Keystone XL's environmental impact. The draft said there was "no significant adverse environmental effects" — the final one doesn't.

With no requirement to approve or deny the pipeline within a certain time period following the national interest determination, Hoeven said he is concerned Obama might use that relative ambiguity to punt a decision past the 2014 elections.

"Without some of the specificity, the president might see this as a way to delay this until after the midterm," Hoeven told the Washington Examiner. "We need to keep pushing congressionally."

The array of business groups, unions, Republicans and centrist Democrats who support the project say it would bring jobs — 42,100 direct and indirect during the one- or two-year construction period, and 35 permanent posts — and strengthen energy security. Canada also has lobbied the Obama administration on the issue.

But the project's opponents, which include green groups and most Democrats, say the pipeline would devastate the climate by enabling oil sands growth, and they question whether the crude would remain in the U.S.

Those detractors said the report buoyed their case that Keystone XL would contribute to climate change. They pointed to language in the report that said the project "would contribute to cumulative global GHG (greenhouse gas) emissions."

"Even though the State Department continues to downplay clear evidence that the Keystone XL pipeline would lead to tar sands expansion and significantly worsen carbon pollution, it has, for the first time, acknowledged that the proposed project could accelerate climate change," said Susan Casey-Lefkowitz, international program director of the Natural Resources Defense Council.

Opponents also criticized State for releasing the report when Foggy Bottom's internal watchdog is still investigating a potential conflict of interest by the outside contractor that performed the study. That contractor, London-based Environmental Resources Management, had previously done work for TransCanada.

"If anything, this shows how brazenly the State Department has allowed big oil to run this show. Now up to the point of helping sweep under the rug a host of stunning revelations about how TransCanada, ERM and the State Department were all in bed together on this report," Elijah Zarlin, senior campaign manager with left-leaning group Credo Action, told the Washington Examiner.

Even some of Keystone XL's more ardent supporters questioned the State Department moving ahead with the environmental report with the investigation into its contractor choice ongoing.

"It makes no sense to issue an EIS while the matter with ERM is unsettled," Don Canton, a spokesman for Hoeven told the Washington Examiner.

For its part, Jones said State was "very confident" that Environmental Resources Management presented no conflict of interest.

Still, Keystone XL opponents are keen to hammer away at the issue. And they're also gearing up for new pressure on Obama with a series of nationwide protests.

“The State Department has given Obama all the room he needs to do what he promised in both campaigns: to take serious steps against global warming. He's about the only person who hasn't weighed in on Keystone XL; now we'll see if he's good for his word or if the fossil fuel industry is so strong they control even the president of the United States," said Bill McKibben, co-founder of climate advocacy group 350.org.

The pipeline's backers aren't resting, either.

Republican leadership in the House is considering tying approval of Keystone XL to a bill to raise the debt ceiling, which lawmakers must do by the end of February.

Such a maneuver would face headwinds in the Senate, where Senate Majority Leader Harry Reid, D-Nev., would likely seek to keep the pipeline out of the bill. And the White House has urged lawmakers to pass a clean debt ceiling bill.

"I haven't seen much get through as far as any of the efforts to move this forward," Cindy Schild, senior manager for refining and oil sands with the American Petroleum Institute, told the Washington Examiner. "I think, as with many issues, it seems to be a difficult Congress to move things forward, so we are hoping the president will finally make the decision."

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