EPA and State Department Square Off on Tar Sands Pipeline

Before July 16, when the Environmental Protection Agency issued its 18-page letter directing the State Department to more carefully assess the considerable risks of the $7 billion Keystone XL oil pipeline from Alberta, Canada to the Gulf Coast, Secretary of State Hillary Clinton was expected this fall to issue a Presidential permit approving construction. The penetrating critique of the State Department’s permit review of the 1,702-mile pipeline, which the EPA called “inadequate,” puts that fall schedule on indefinite hold. The proposed Keystone XL pipeline, to be built by TransCanada, is the latest of three big oil pipeline construction projects that are at the vanguard of a new era in hydrocarbon development. Instead of drilling deep underground for pools of oil that are getting harder to find and more dangerous to punch open, energy developers are becoming miners, tapping what the energy industry calls “unconventional” reserves contained in oil-saturated sands and shales. Near the northern end of the Keystone XL pipeline lies Alberta’s bitumen-saturated tar sands, a forested region as large as North Carolina that conservatively contains 175 billion barrels of recoverable oil, or enough to satisfy U.S. demand at current rates of consumption until 2035. American, Canadian, Chinese, Korean, and European oil companies are spending $15 billion a year to manage and expand immense open pit mines, processing plants, and toxic tailing ponds in order to boost production from 1.3 million barrels a day to over 3 million barrels per day by 2025. The United States is the primary market for tar sands oil.According to Cambridge Energy Research Associates, the U.S. imports 1.1 million barrels of tar sands oil a day. Alberta’s tar sands have quietly become the largest source of American oil imports and one of the largest new sources of greenhouse gas emissions contributing to climate change.Moreover, the intensity of tar sands development is quickening. At the other end of the proposed Keystone XL pipeline, and several more coming online, are refineries in Oklahoma, Texas, Louisiana, Illinois, Indiana, Michigan and several more heartland state that are expanding their capacities, at a cost of more than $20 billion. Oil companies investing in tar sands production and distribution have been very confident that their plans would prevail. The State Department, under President George W. Bush, had already approved two other Presidential permits to allow big new tar sands oil pipelines to cross from Canada into the U.S. In April, Enbridge completed the $3 billion, 1,000-mile Alberta Clipper from Hardisty, Alberta to Superior, Wisconsin, which will eventually be capable of transporting 800,000 barrels of tar sands oil a day to refineries in the Great Lakes region. TransCanada’s has partially-completed the $5 billion, 2,151-mile Keystone pipeline from Hardisty to Illinois and Oklahoma, which will transport nearly 600,000 barrels of tar sands oil to the Midwest. The first oil shipments began on June 30. But with its letter to the Department of State, the EPA became the first U.S. government agency to formallyintervene in the rapidly developing, and ecologically risky unconventional oil play. The environmental agency’s challenge requires the State Department to rework its first environmental review and develop new data on the pipeline’s effects on greenhouse gas emissions, safety, air quality, water resources, wetlands, wildlife, and communities. Division in The Obama Administration. Just as significantly, the letter revealed a significant schism in the Obama administration that pits energy security against climate action. On the one hand, the president pledged last year at the Copenhagen Climate summit to reduce greenhouse gas emissions 17 percent below 2005 levels by 2020, and 80 percent by 2050. The White House and the EPA are putting the federal Clean Air Act to work to significantly reduce greenhouse emissions from vehicles and heavy industry. In April, the EPA issued new vehicle emissions standards for cars and light trucks that the agency said would save 1.8 billion barrels of oil from 2012 to 2016, and reduce greenhouse gas emissions by 900 million metric tons. Both are significant. The annual fuel savings, nearly 400 million barrels, represent roughly 6 percent of all the oil used in America last year, according to the Energy Information Administration. The emissions reductions, roughly 180 million tons annually, represent 3 percent of all carbon emissions the U.S. produced in 2008, according to the EPA. Producing and using tar sands oil is blunting those reductions. The 1.3 million barrels of oil currently produced in Canada also produces 40 million metric tons of greenhouse gases annually, or 5 percent of all Canadian carbon emissions, according to the Pembina Institute, a respected environmental research center. According to various estimates by government agencies and non-profit environmental organizations and think tanks every 1 million barrels of tar sands oil refined and consumed in the U.S. produces another 30 million to 40 million metric tons of greenhouse gases. Big Climate Emitter The EPA says that greenhouse gas emissions from tars sands mining to finished gasoline and diesel are 82 percent higher than from conventional sources of oil. Every 900,000 barrels of oil carried every day by the Keystone XL pipeline, said the agency, would produce an extra 27 million metric tons annually of carbon emissions. “To provide some perspective on the potential scale of emissions,” said the authors of the EPA letter, “27 million metric tons is roughly equivalent to annual CO2 emission of seven coal-fired power plants.” But on the other hand, leaders in the Obama administration are equally concerned about the diplomatic and economic consequences of limiting tar sands development. Secretary of State Clinton and her aides are mindful of the close diplomatic relationship with Canada. The administration’s economic and commerce leaders are interested in securing America’s fuel supply and protecting the $600 billion annual trade between the two nations. Obama’s Middle Ground. In February 2009, during his first meeting in Ottawa with Prime Minister Stephen Harper, President discussed the tightening tar sands, climate and energy security knot. Hesuggested that the solution is to capture carbon during the mining and early processing of tar sands oil and inject the emissions deep underground. “We’re not going to solve these problems overnight,” said President Obama, who is well aware that the so-called carbon capture and sequestration technology is unproven and only now being sporadically tested by several American utilities. The pragmatism expressed by the president is supported by a number of energy and climate authorities in Washington, among them Michael A. Levi, director of the Program on Energy Security and Climate Change at the Council on Foreign Relations. In a study last year that weighed tar sands development and climate emissions,Levi wrote that “oil sands production delivers both energy security benefits and climate change damages,” though he also argued both effects were overstated. “For the near future, the economic and security value of oil sands expansion will likely outweigh the climate damages that the oil sands create. But climate concerns cannot and must not be ignored, and will become more important over time.” But prominent environmental advocates are more adamant. “The main set of concerns around this tar sands pipeline are not around how it is constructed, but about the type of oil it will transport. Bitumen or raw tar sands oil is the dirtiest oil on Earth,” said Susan Casey-Lefkowitz, a tar sands specialist with the Natural Resources Defense Council, in an August 5 blog post. “The United States does not need the Keystone XL tar sands pipeline. The administration’s decision on the Keystone XL pipeline also is stirring concern among Democrats on Capitol Hill. On June 23, 50 House Democrats signed a letter urging Secretary Clinton not to approve the Keystone XL pipeline. On July 2, three days after the State Department held a public hearing in Washington on the pipeline, Representative Henry Waxman, Chairman of the House Energy and Commerce Committee, sent a letter to Secretary Clinton that raised serious concerns about the effect the pipeline would have on climate change and asking whether the project was “in the national interest.” “The State Department’s decision on whether to permit this pipeline represents a critical choice about America’s energy future,” said Rep. Waxman. “This pipeline is a multi-billion dollar investment to expand our reliance on the dirtiest source of transportation fuel currently available. While I strongly support the president’s efforts to move America to a clean energy economy, I am concerned that the Keystone XL pipeline would be a step in the wrong direction.” On July 25, 9 days after the EPA sent its letter to the State Department, a tar sands oil pipeline owned and operated by Enbridge ruptured along the Kalamazoo River in southern Michigan, releasing 1 million barrels of oil, the largest oil accident ever in the Midwest. ((see maps)) ((20 AUG 2010))


















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