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State Department Issues Draft SEIS on Keystone XL Pipeline

The U.S. State Department on Friday released a draft supplemental environmental impact statement (DSEIS) on the proposed northern portion of TransCanada Corp.'s controversial Keystone XL oil pipeline from Western Canada to Cushing, OK, drawing strong reactions from supporters and opponents alike.

Identifying it as the DSEIS from Canada to Nebraska, the State Department announcement said this kicks off a 45-day public comment period. "Specific instructions about how to submit comments will be provided via the Federal Register and on the State Department Keystone XL website," the State Department said.

One conclusion in the 28-page report is that "approval or denial of any one crude oil transport project, including the proposed project remains unlikely to significantly impact the rate of extraction in the oilsands, or the continued demand for heavy crude oil at refineries in the U.S." It goes on to point out that "limitations on pipeline transport would force more crude oil to be transported via other modes of transportation, such as rail, which would probably (but not certainly) be more expensive."

TransCanada welcomed the DSEIS and said it "remains strongly committed" to obtaining approval to safely build and operate the pipeline, and will continue to be engaged in the process as the State Department enters its final stages of reviewing the project.

The DSEIS reaffirmed that "there would be no significant impacts to most resources along the proposed project route." It said that Keystone XL would result in no "substantive change in global GHG [greenhouse gas] emissions." It also said "the denial of a Presidential Permit would likely result in actions by other firms in the United States (and global) petroleum market, such as use of alternative modes to transport WCSB [Western Canada Sedimentary Basin] and Bakken crude."

"Completing the draft supplemental environmental impact statement for Keystone XL is an important step towards receiving a Presidential Permit for this critical energy infrastructure project," said TransCanada CEO Russ Girling. "No one has a stronger interest than TransCanada does in making sure that Keystone XL operates safely, and more than four years of exhaustive study and environmental review show the care and attention we have placed on ensuring this is the safest oil pipeline built to date in the United States."

Proponents like the U.S. Chamber of Commerce and National Association of Manufacturers (NAM) called the DSEIS a step in the right direction, "long overdue," and urged an accelerated effort toward final approval of the multi-billion-dollar project, for which the southern portion is already under construction between Oklahoma and Gulf of Mexico refineries in Texas.

Daniel Kish, senior vice president for the Institute for Energy Research (IER), said the DSEIS is more evidence of government red tape interfering with progress. "This is, as President Obama says, 'a teachable moment.' It teaches us why our government's policies continue to stifle job creation, investment and new energy sources and instead spends valuable time and increasingly limited resources studying things to death. While we welcome this report, we also note this is the fourth such environmental report on the Keystone XL pipeline proposal and since it is only a 'draft' there will be at least five federal environmental studies before a decision is made by our government on the pipeline. The Canadian government made a decision in six months; our government has taken 54 months so far."

A coalition of environmental groups opposing the project used the announcement as a reason to reiterate its opposition and to emphasize that the original EIS for the Keystone XL permit from TransCanada Corp., which was rejected in 2011 by the State Department, included "significant missing sections." The groups said they will be gearing up for the public comment period.

Following the DSEIS release, Energy and Natural Resources Committee Chairman Ron Wyden (D-OR) called for a clear analysis of the impact of the Keystone XL pipeline on U.S. consumers.

"While I appreciate the hard work that has gone into the State Department's draft assessment, it falls short on a fundamental question: What is the impact on American consumers?" Wyden said. "The State Department needs to explain how it is in America's national and economic interests to facilitate Keystone XL's completion, especially if the pipeline is simply a conduit for oil and refined products to go elsewhere that makes the United States less energy secure and drives domestic gas prices higher."

U.S. Chamber CEO Karen Harbert said the DSEIS was "long overdue and continues to build a strong case supporting the construction," adding that Keystone XL has now become "one of the most closely examined infrastructure projects in our nation's history." NAM said it will continue to lead the charge for the project's approval, citing its job creating and overall economic benefits for the nation.

In January, Nebraska Gov. Dave Heineman approved a revised route for the northern portion of the oil pipeline that would run through his state (see Shale Daily, Jan. 23). The northern portion of the proposed $7 billion, 1,700-mile project from Alberta to refineries in the GOM region of Texas and Louisiana requires a presidential permit from the State Department.

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