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Keystone Won’t Be Big Contributor to GHG, Says State Department

TransCanada Corp.'s controversial Keystone XL pipeline, designed to carry heavy crude from oilsands production in Alberta to Gulf Coast markets, won't significantly affect greenhouse gas (GHG) emissions, the U.S. State Department has concluded. However, whether it gains approval from the Obama administration remained in question on Friday.

According to a final environmental impact statement (FEIS) issued by State on Friday, "approval or denial of any one crude oil transport project, including [Keystone], remains unlikely to significantly impact the rate of extraction in the oilsands, or the continued demand for heavy crude oil refineries in the United States."

A portion of the pipeline being built from Oklahoma through Texas already is near completion (see Shale Daily, Nov. 13, 2013).

The long-awaited analysis triggered fierce criticism from environmental groups, which argue that a leak or spill could disrupt sensitive areas along the pipeline's path. Many also suggest that the pipe's approval would delay independence from fossil fuels by the United States. Canada is the leading oil exporter into the United States.

The State Department's report offers 11 volumes of detail on how Keystone might impact heavy crude extraction in the oilsands. The positive report reached the same conclusion as the draft completed last year: no single infrastructure project would alter Alberta oil development. Some Canadian oil producers have argued that without the Keystone's approval, they would seek support to export production, particularly to the thirsty Asia Pacific area.

The U.S. Environmental Protection Agency (EPA) has questioned whether State was giving enough weight to Keystone's potential negative environmental impacts. Bitumen, which is extracted from the oilsands and diluted for transport, may cause more GHG emissions and be more difficult to manage if a spill occurred, EPA has said.

Yes, said the State report, crude from oilsands is 17% higher in GHG than the average crude oil used in the United States, but it is only 2-10% higher than the heavy crude it would replace at Gulf Coast refineries, said the report.

"Five years, five federal reviews, dozens of public meetings, over a million comments and one conclusion: the Keystone XL pipeline is safe for the environment," American Petroleum Institute President Jack Gerard said. "This final review puts to rest any credible concerns about the pipeline's potential negative impact on the environment. This long-awaited project should now be swiftly approved."

API senior manager for oilsands policy Cindy Schild also chimed in. "Time and time again, State reaches the same conclusion despite the unprecedented and thorough environmental review" using nine criteria such as whether the pipeline served U.S. interests. "When you look at the nine criteria, it is hard to figure out how they could conclude that it is not in the national interest."

When asked on Friday whether the president would soon make a decision about whether to allow the pipeline to proceed, press secretary Jay Carney told reporters a "long-term process" was in place "to determine whether projects like this are in the national interest.”

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