The U.S. State Department released its long-awaited supplementary environmental impact statement on TransCanada’s proposed Keystone XL pipeline to the Gulf of Mexico on Friday, setting the stage for a showdown between oilsand proponents and environmental groups opposed to the project.
The supplementary assessment had been requested by the U.S. government’s Environmental Protection Agency earlier this year because the original statement left out information regarding full cycle greenhouse gas emissions of oilsands crude and failed to consider alternatives to routing the line through environmentally sensitive watersheds.
Although the key conclusions of the report were unchanged, it found that “wells to wheels” emissions from diluted bitumen were about 17 per cent higher than comparable averages for oil refined in the U.S. and marginally higher than comparable heavy oils from Venezuela and Mexico.
Although the report said there would be environmental impacts associated with Keystone, it added they wouldn’t be any greater than with other pipelines that would be needed if Keystone is not built.
It also said the consequences of not building the line could include supply disruptions and price spikes that would hurt consumers.
“Oil shocks (unanticipated supply reductions that result in price spikes) arise through unstable crude oil supplies and would be more likely to occur under the No Action alternative, as compared to the proposed project, since crude oil supplies would continue to be sought from unstable foreign sources and transported over longer distances in the near term,” the report said. “In contrast, projects which stabilize crude oil supply through diversification and increased access to politically stable regions, such as the proposed project, benefit the U.S. economy.”
The supplementary report will now be subject to a 45-day comment period and then incorporated into the final environmental assessment. A separate report will consider the “national interest” provisions relegated to energy security and economic benefits from the project. The U.S. government has said it will issue a ruling either way before the end of the year and there was nothing in the report to suggest the timelines have changed.
Although they got some ammunition from the report in terms of higher greenhouse gas emissions, environmental groups said they were disappointed with other findings that downplayed the risks of oil spills on regional water supplies.
“On first reading, we are concerned that the State Department has still not done a serious and thorough analysis of significant dangers, including the safety of tarsands oil pipelines and the pollution caused by tarsands oil production,” Friends of the Earth campaigner Alex Moore said in a statement.
However, “the State Department has taken an important step in categorically stating that tarsands oil has far higher greenhouse gas emissions than do other forms of oil used in the U.S. This finding alone should lead the State Department to reject the permit for this pipeline.”
TransCanada representatives said they were pleased the regulatory process in the U.S. is moving ahead, although they declined to comment on specific findings in the report.
“We’ve made the decision to read it first,” said spokesman Shawn Howard. “We’re pleased they have published the report because it signifies that the process is moving forward.”
The announcement came after the close of markets. TransCanada shares gained 38 cents on the Toronto Stock Exchange Friday, to close at $40.07.