U.S. Department of Energy questions Keystone XL pipeline ‘facts’

WASHINGTON – The U.S. Department of Energy (DOE) on July 26 posted its comments on the State Department Draft Environmental Impact Statement (DEIS) on the Keystone XL pipeline.
The TransCanada Keystone XL Pipeline would carry up to 900,000 b/d of bitumen in a high-pressure pipe from Alberta, Canada, to the U.S. Gulf Coast.
Earlier, the U.S. Environmental Protection Agency posted its reservations about Keystone XL.
DOE, in a series of pointed questions, has asked State to “clarify or qualify” numerous statements made in support of the pipeline
Specifically:
• DOE questions that global and domestic oil supplies are unlikely to decrease substantially over the next 30 years, pointing out that the reports of the EIA (which is a branch of the DOE), upon which that statement is based, are not forecasts but reference cases that assume that technology, demographic trends and other factors - under current laws and regulations - do not change. “Outlooks produced by the EIA are not forecasts and do not imply a probabilistic assessment of the future,” DOE states.
• DOE states that suppliers of crude oil from Canada already have access to two existing pipelines and that “in addition, the recently approved Alberta Clipper and Keystone pipelines will ensure that there is enough pipeline capacity from Canada to the U.S. for some years.” DOE says: “Recognizing that Canadian producers have four pipelines available for exporting WCSB to the U.S., it would be helpful to clarify or qualify the following two statements” that (a) without Keystone XL, there is no ready conduit for this oil, and (b) that the U.S. would remain dependent on unstable sources of oil from “the Mideast, Africa, Mexico, and South America.”
• DOE states that the pipeline will not shield the U.S. from global price shocks, stating “The Keystone XL pipeline would also not eliminate U.S. demand in the international market or its exposure to price shocks propagating through that market, which affect the prices charged for supply from Alberta producers as well.” DOE continues: “When the world experienced an oil price shock in 2008, Canada sold crude to the U.S. at a price linked to a global market price, not at below market rates.” I.e. the pipeline would not reduce the volatility or price of oil overall, nor would it regulate the price of the oil coming through the pipeline itself. DOE asks State to clarify its statements that (a) Keystone XL will lower crude oil prices and price volatility to the Gulf coast refineries and that (b) without Keystone XL, crude oil prices will increase.
• DOE states that arguments that crude oil will go to Asia if Keystone XL is not built are not accurate because building a West Coast pipeline is not mutually exclusive with building Keystone XL. DOE says “it seems that issuance of a Presidential Permit for the Keystone XL pipeline will not foreclose an option others may be pursuing to establish a pipeline to the West” and asks for State to clarify its statement that if the pipeline is not built, much of the oil will be “exported to Japan, China and India.”

EPA slams State Department DEIS for Keystone XL, recommends delay in approval

WASHINGTON – In a politically astute move that was widely anticipated, the Environmental Protection Agency in a July 6 letter took the U.S. State Department off the hook by recommending a delay in approval of construction of TransCanada’s proposed Keystone XL crude oil pipeline.
If the State Department accepts the recommendation, it can delay a decision on the controversial pipeline until after fall elections.
In recommending a delay in approval, the Environmental Protection Agency said the draft environmental impact study for TransCanada Corp.'s proposed oil pipeline from Canada to the Gulf of Mexico is inadequate and should be revised.
Keystone XL would move bitumen from Alberta, Canada, down through Montana, South Dakota and Nebraska in the upper Great Plains. It would then merge with the Keystone pipeline under construction in Kansas before splitting off again to pass through Oklahoma to end at the largest U.S. refining complex in Texas and the Gulf of Mexico.
Environmental groups have raised concerns that the pipeline could pollute air and water supplies and harm migratory birds and other wildlife. They have also speculated about what they consider inadequate pipeline safety and emergency spill response.
In a letter to the State Department, EPA's assistant administrator for enforcement and compliance assurance, Cynthia Giles, said the draft environmental impact statement failed to adequately address those concerns.
The impact from "air emissions from refineries and the potential contamination of drinking water supplies from an oil spill have not been fully evaluated," Giles said in the letter.
She also said the study also does not "evaluate the environmental justice issues associated with potential impacts to communities in Port Arthur, Texas, where numerous industrial facilities, including chemical plants and a hazardous waste incinerator, are contributing to the residents' overall exposure to contaminants."
The agency said the State Department should revise the study and open it up for more public comment.
TransCanada spokesman Terry Cunha said the company disagrees and that the State Department "did a thorough and complete job in preparing the Draft EIS."
He said TransCanada looked "forward to the environmental review process continuing through DOS's review of comments and preparation of the Final EIS."
The EPA sent its report to the State Department, which has to approve the pipeline because it crosses an international border.
The State Department is reviewing comments from eight agencies on the draft environmental report. The public comment period on the current draft document ended July 2.
"The State Department seriously considers all public comments received as part of the public comment process. However, we will not have a detailed response until we complete the review process," State Department spokeswoman Jill W. Dietrich said in an e-mail.
Keystone XL will move diluted bitumen from Alberta, Canada, down through Montana, South Dakota, Nebraska in the upper Great Plains, and then from Oklahoma to Texas and into the Gulf of Mexico. Under its planned route, the pipeline would cross several rivers and aquifers, including the Ogallala aquifer which supplies water to several Midwestern states.
TransCanada has said the pipeline would provide a reliable source of oil to the U.S. from a stable trading partner and would not adversely affect the environment.
Cunha has said construction of Keystone XL should provide more than $20 billion in new spending to the U.S. economy and more than $585 million in state and local taxes in states along the pipeline route.
Susan Casey-Lefkowitz, director of international programs for the National Resources Defense Council, said the environmental advocacy group was "happy to see how seriously EPA was taking the environmental and public health concerns around the pipeline," and said other pipelines have not undergone such scrutiny.
Keystone has already won approval for pipelines that move oil from Canada through the Dakotas, Nebraska and Missouri to Illinois, as well as for the section being built in Kansas.
"But of course... the first Keystone was under the Bush administration, and the goal of the Bush administration was to push it through as quickly as possible," she said.
She said NRDC has asked the State Department to release correspondence from other federal agencies that have responded to the Keystone XL proposal but had not seen any of those.
EPA gave the State Department’s draft EIS its lowest possible rating. EPA recommended that the State Department provide new analysis and information in a revised draft environmental impact statement that will circulate for public review. This means additional time for analysis and reflection. EPA also says that the proposal is a potential candidate for referral to the White House Council on Environmental Quality - the office responsible for developing recommendations when there are disagreements among agencies.

NRDC questions State Dept.’s early release of DEIS for Keystone XL

WASHINGTON - Senior Attorney Susan Casey-Lefkowitz of the Natural Resources Defense Council wrote on her Blog on April 9 “the State Department (on April 9) made available on its webpage its draft environmental impact statement (DEIS) for the proposed Keystone XL tar sands pipeline. The DEIS is oddly dated one week from now and it seems as though no Federal Register notice has been published. We can only hope that its premature release is a trial balloon and that initial reaction will be considered before the real publication occurs.”
NRDC contends that State should have waited for completion of a new White House guidance on incorporating greenhouse gas emissions impacts into environmental impact statements. And, State should have been taking a hard look at whether Keystone XL is in the national interest before investing in a draft EIS.
Keystone XL is a target of environmental groups because it will double the amount of tar sands oil currently being piped into the United States – of what will be bitumen, not syncrude. Much of the tar sands oil received in the U.S. is already refined to a synthetic crude, more like common oil. Bringing in the raw bitumen in the new pipeline means that the upgrading and refining has to take place in the United States, resulting in increased emissions of greenhouse gases, heavy metals, and other pollutants, say the environmentalists.