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Did the Latest State Dept. Report Just Make Keystone Inevitable?

Environmentalists can chain themselves to the White House fence all they want: The TransCanada Keystone XL pipeline appears to be slowly but surely headed for approval.

On Friday afternoon, that time of day for rolling out news the White House would like to see buried, the State Department released its long awaited environmental impact report, which concluded that the project would have only minimal environmental impact.

The decision could provide President Barack Obama with cover to sign off on the project after more than five years of review. In a speech last summer, Obama said he would only approve the pipeline if it did "not significantly exacerbate the problem of carbon pollution. The net effects of the pipeline's impact on our climate will be absolutely critical to determining whether this project is allowed to go forward." Now, he has a report in hand making that exact argument. Moreover, the report claims that the pipeline would create some 42,100 jobs and generate $2 billion in earnings across the U.S. economy.

U.S. environmentalists have made the pipeline a signature issue and it has become a rallying cry for the left. But the pipeline has become equally important to Republicans, who have used the issue to beat Obama over the head on the issue of energy security and creating American jobs. That has left the president in something of a bind: Either way he turns, he's on the losing end of a political argument. As a result, the administration has slow-rolled the approval process for the pipeline, and on Friday they received a much-needed datapoint in bolstering the case for approving the pipeline.

The release of the report, the final Supplemental Environmental Impact Statement, represents one of the last hurdles the project must clear in order to garner approval. The State Department still has to issue its report on whether the pipeline is in the national interest, which will take into account the security concerns of reliance on foreign oil and how Keystone might impact the U.S. relationship with Canada. Canadian Natural Resources Minister Joe Oliver called the report a "positive step on the route to approval," according to Reuters. "This has been a lengthy and thorough review process. The benefits to the United States and Canada are clear. We await a timely decision on this project."

For the moment, though, the report's conclusions signal a slow, but steady march toward approval.

The pipeline, which would carry 830,000 barrels of oil per day from Alberta, Canada, to refineries on the Gulf Coast, has been attacked as the release valve for the more carbon-intensive bitumen that is fueling Canada's energy boom. While the heavy crude coming from the Alberta fields would release roughly 17 percent more carbon than the heavy crude it would displace from U.S. refineries, the report claims that Keystone "remains unlikely to significantly impact the rate of extraction in the oil sands, or the continued demand for heavy crude oil at refineries in the United States." In short, the oil is coming out one way or another -- it's only a matter of how it travels.

Whether the pipeline is built will have little impact on whether the Alberta fields continue to pollute, and as a result, the State Department refuses to factor in the impact of the carbon released from tar sands against Keystone. "The incremental impact of not going to market doesn't have to be counted anymore," Kevin Book, an analyst for Clearview Energy Partners, told Foreign Policy. "The crude will get to market some other way."

By placing the inevitability of Albertan oil production at the center of the report, Obama may have just won some room to maneuver. Considering the impact of other forms of transportation -- including rail -- the report found that not building the pipeline would release 28 to 42 percent more greenhouse gas than not doing so, assuming the same volume of oil was being transported. In short, if the development of tar sands is all but inevitable, Keystone might be the least-worst option. Moving oil through a pipeline is simply more efficient than by rail.

Moreover, shipping oil by rail has recently come under criticism after a series of high-profile accidents. In late December, a train carrying oil through North Dakota burst into flames, and in June, a derailed train in Lac-Mégantic*, Quebec, exploded and killed 47 people. Concerns about such accidents could help bolster support for the pipeline, according to Book. "It's an optics problem for the Obama administration," he said. "How do you turn down a pipeline when trains are blowing up all over the place?"

Environmental groups, however, disagree with that interpretation of the report. Susan Casey-Lefkowitz, the international program director of the Natural Resources Defense Council, said in a statement that the State Department, for "the first time, acknowledged that the proposed project could accelerate climate change. President Obama now has all the information he needs to reject the pipeline. Piping the dirtiest oil on the planet through the heart of America would endanger our farms, our communities, our fresh water, and our climate. That is absolutely not in our national interest."

If the review process stays on schedule, the final decision could coincide with the release this summer of the Environmental Protection Agency's new standards for existing power plants. That could allow the Obama administration to give something to both sides of the debate, approving the pipeline in a gesture toward Republicans who have hounded the administration on the issue while cracking down on power plants to appease environmentalists.

"Saying no can be done with no preparation whatsoever, but saying yes to something controversial takes a lot of care," Book said.

*Correction, Feb. 3, 2014: This article originally misstated the place where the train derailed. It derailed in Lac-Mégantic, Quebec, not Montreal. (Return to reading.)

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