DC Keystone Protest (Photo credit: 350.org)
Ed. note: This piece was first published on Robert Rapier’s R-Squared Energy Blog.
If not for the US government’s latest demonstration of incompetence that played out at the end of last week (a.k.a. sequestration), the top news story might have been a report issued by the US State Department late Friday.
The report was the Draft Supplementary Environmental Impact Statement (SEIS) for the Keystone XL Pipeline project, and it was unwelcome news for environmentalists who have been protesting the crude pipeline extension that would link Canada’s oil sands to Gulf Coast refineries.
It may seem arbitrary, given the large number of oil and gas pipelines that already criss-cross the US, that this particular one has generated such a high profile debate around energy security and the environment. But this debate isn’t really about a pipeline. This pipeline isn’t going to make or break the development of Canada’s oil sands, nor — as I will show here — is it going to make a measurable difference with respect to climate change.
The truth is that the Keystone XL pipeline is symbolic. The environmental movement sees the pipeline as a continuation of a fossil-fuel dependent lifestyle that is leading to a climate catastrophe. Pipeline supporters argue that the pipeline will create jobs and strengthen our relationship with Canada, our most important source of oil imports. The truth is that it isn’t that big of a deal either way.
State Department Findings
The newly-released SEIS reads very much like the “final” EIS that the State Department released in August 2011, and once more environmentalists are in an uproar. The problem, as I see it, is that they are making emotional arguments, which aren’t necessarily effective against a technical assessment. When you “do the math,” it becomes clear that their focus on this project is a misallocation of resources. They are consuming political capital fighting the wrong battle.
According to the new SEIS, “Approval or denial of the proposed project is unlikely to have a substantial impact on the rate of development in the oil sands, or on the amount of heavy crude oil refined in the Gulf Coast area.”
Further, the report considered alternate scenarios. Without pipeline routes to move the crude from the oil sands in Alberta, the oil would be moved by rail, it concluded. Because there is a higher cost associated with rail, the report projected slightly lower production by 2030: “the incremental increase in cost of the non-pipeline transport options could result in a decrease in production from the oil sands, perhaps 90,000 to 210,000 bpd (approximately 2 to 4 percent) by 2030.”
On the other hand, if some of the other pipeline projects that are under development go forward, the decrease in production by 2030 is projected to be a more modest 20,000 to 30,000 bpd if Keystone XL is denied.
How significant are these numbers? Even if the largest production shortfall of 210,000 bpd is realized — and presuming the supply wouldn’t simply be developed elsewhere — this only amounts to 0.2 percent of current global oil demand.
Further, because global carbon dioxide emissions are actually dominated by coal consumption, the savings in carbon dioxide emitted to the atmosphere would amount to only 0.07 percent of current global carbon dioxide emissions. (That’s a straightforward calculation based on the carbon dioxide emitted by 210,000 bpd divided by global carbon dioxide emissions according to the BP Statistical Review of World Energy). How small is that? That level of contribution wouldn’t even be measurable above the background noise of global temperature and carbon dioxide concentrations. It is certainly smaller than the margin of error in measuring global carbon dioxide. No matter how you slice it — even assuming that stopping Keystone will forever keep the entire capacity in the ground — you can’t reach even a hypothetical savings of 0.5% of global carbon dioxide emissions.