#EnergyChat: Will the Keystone XL pipeline increase carbon emissions?

Key Takeaways

welcome to this live energy chat sponsored by the energy collective.com I'm your host and moderator Jesse Jenkins and we have a great discussion in store today last Friday the US state department released its final environmental impact statement for the Keystone XL pipeline thrusting the controversial project back into the news the final Eis gave ammunition on both sides of the debate over the proposed 1,179 M long pipeline which would link Alberta's Sands with American refineries and Export terminals in the Gulf Coast region the reports headline conclusion approval or denial of the Keystone XL pipeline would not have a significant impact on the rate of Canadian tar Sands extraction that's because under the reports author's assumptions uh the most likely or the mo most likely assumptions are that oil from the tar Sands will find its way to Market with or without the Keystone project but the report also concluded that depending on your assumptions the state the final as says that if built the 800 30,000 Barrel per day pipeline could cause an extra 1.3 million to 27.4 million metric tons of carbon dioxide emissions each year that's the equivalent of putting in extra 250,000 to 5.5 million vehicles on the road more than enough carbon to give climate Advocates ammunition in the debate as well today we'll be talking Keystone XL climate change and energy markets what should President Obama decide on the controversial pipeline is Keystone excel in America's national interest and what are its implications for global climate change to help us sort through this I'm joined today by Elena Shore a reporter with environment and energy publishing in Washington DC who has followed the pipeline debate closely for the past several years Elena thanks for joining me thanks it's actually Alana com Alana I'm sorry about that I'm also joined by Jeff Styles a 22-year veteran of the oil and gas industry and now managing director of GSW strategies a Consulting Group morning Jesse good morning finally I'm joined by Daniel Kesler a climate activist who has helped shape Communications on the Keystone Pipeline with 350.org and Greenpeace International and is now communications director at the climate action lab in Berkeley California thanks for joining us Dan you're welcome hello so Elena or Alana I'm sorry can you um maybe talk us through um a little bit more details on the uh final e statement uh what is State Department's uh assessment of the pipeline and its likely impacts on climate change well you had that range of of carbon emissions estimates correct between um you know about 1 plus to about 27 million you know however in the e in a provision that that very few people talk about it actually discusses that uh the state department believes that highend scenario is somewhat unlikely um basically uh Mike Levy at the Council on Foreign Relations uses the term stress tests for these scenario these scenarios and I think it's a very apt because what state decided to do here is subject the claim that the oil SS would be veloped anyway to various oil pricing and Market scenarios because obviously no one can predict the future States finally acknowledging that so depending on what the price of an average Barrel is in americaabroad state worked out you know several possible uh end games for the pipeline being built or not being built and in one particular endgame namely pretty low oil prices 65 to 75 a barrel uh the high end of this carbon emission scenario could happen it does however it believes that's unlikely because its fundamental conclusion is Rail and tanker and Barge will go a long way towards filling the capacity Gap that Keystone would represent not fully but a long way so that's that's basically what the is looks like we may have lost your oh there you great thanks Elana um temporarily lost your video feed but it looks like you're back um Jeff let's talk through some of those economics the uh some of the key economic analysis here as to whether or not the pipeline will have an impact on the development of tarand really H comes down to the difference in cost uh and assumptions about that between shipping the rail to uh the oil to Market over Rail and shipping it over more affordable pipeline uh walk us through those numbers what do the economics look like and the differences between uh shipping by Pipeline and shipping by uh rail well really the starting point is that you have to look at the discounts that are being applied to Jeff are you there I am here yeah you have to start with the discounts that are being applied to the Western Canadian crude coming from the oil stands and those are really substantial $15 $20 a barrel versus internationally traded crudes like Brent so when you start at that point you know you have a lot of room to pay for transportation um and still cover your costs of production to get it to Market um clearly pipeline is cheaper but from everything that I've seen it's not as drastically cheaper as you might guess it's a long pipeline um tariffs on Long pipelines tend to be relatively High um and it's clear that the railroads are looking for this business um they've lost a tremendous amount of business with the decline of cool shipments so I think they're happy to have additional shipments of oil and they've made the tariffs relatively attractive so as I understand it you're only looking at several dollars a barrel additional cost you still get the product or the the crude to Market and the market that we're talking about here is the market for Gul Coast refiners in the US it's not really an export Market um I think one of the things that people tend to overlook when they look at this is that Gul Coast refineries are currently importing two to three million barrels a day consistently of similar cruds from offshore that's really the market that the Canadian producers are targeting with their oil sands crude via the Keystone XL pipeline and Dan so let's let's talk about this stress test that the uh the state department ran um the the you know the arguments from the the climate activist side has been that the Keystone Pipeline would significantly impact uh America's contribution to climate change and should be rejected by the president um is that is it your um your read of the pipeline or sorry your read of the environmental impact statement that um that it's highly likely that Keystone's going to significantly contribute to our Our National Climate emissions yes certainly um I there's multiple ways to look at it first of all the do they came out on Friday is a market-based business as usual analysis has nothing to do with social movements or the fact that when perhaps we're not going to have business as usual that eventually we will get around to taking action on climate change we will have a price on carbon we will have an international regime to regulate emissions so this document doesn't capture that it doesn't talk about the fact that the people along the coasts of British Columbia don't want pipelines going out to the West people along the east coast and all across the middle of Canada don't want a pipeline going out to the East and certainly as we've seen there's a rising movement to stop oil development or I should say Taran development in the heartland of the US so the the document doesn't it doesn't capture that and and but it does show though is that under certain scenarios this is the the kind of climate bomb that many climate scientists and many market analysis and economic or Economist said it would be can we look at the Dan you talked about stopping alternative yeah Jee just just a second Dan you talked about um about uh trying to block alternative pipelines that uh to the British Columbia for example or out to the east that would help uh provide alternate routes to Market is it only under a condition in which the climate movement is successful in really um fundamentally altering that landscape and blocking um really all options to Market that that this is the kind of you know pivotal issue um you know what what kind of bar are you setting for yourself as sort of part of the climate movement to to make sure this this uh wind really sticks and has an impact on on co2 emissions well here's what we know I mean we know the tands are probably the third largest pool of carbon on the planet it's why Dr James Hansen Dr Michael man and other climate scientists have come out and said if we fully develop it we're going to have a big problem we also know that the oil is landlocked so you can go out through the west through the east or through the South and this is why the oil industry is so dependent on getting these pipelines now rail certainly is going to makeups for some of it but if you look at their own words what they've been saying over the five years that we've been having this fight they say that they need added pipeline capacity so that's why the activist Community is really centered on that this is really a multi primed approach I mean I think as we see more development with Rail and of course as we see more accidents or I should say tragedies uh we're going to see a rising movement around rail transport as well and these are things that can't necessarily be accounted for and a market-based analysis like what came out from the state department but the there's no mistake that the climate movement is growing it's gaining in political uh Power and that you know over the next few years I see the climate change movement as being one of the dominant political forces in North America you wanted to jump in there and look at some of our Alana as well go ahead it's fine Jee you're welcome to go well first first of all I would I would disagree with the characterization of this as a market-based analysis frankly it's an emissions-based analysis and you have to look at some Market scenarios to gauge the emissions under different scenarios but let's talk about the emissions so if you take the high side of the incremental impact that the state department identified the 27 million tons a year of incremental greenhouse gas emissions that's that's 0.4% of current US greenhouse gas emissions it's comparable to what the US emits from making glass um which is a relatively small source of emissions down the food chain if you look at the total emissions let's assume assume that all of this crude ended up being additional to the market 800,000 barrels a day of additional um oil sands crude that would not be produced under any circumstances they give a range of impacts of 147 to 168 million metric tons a year Soup To Nuts that's from the well head all the way to burning the fuel in your car where 70 plus perc of the emissions occur that figure um is roughly 0.3% of global emissions of about 50 billion tons a year of greenhouse gases so to say that this is you know extraordinary that it's endgame that it's game over anything like that gross exaggeration from my perspective you know at that level for a project this size this does not meet the test that the president put up of significant president said you know if the if the emissions are significant in exac ating climate change he wouldn't approve it it's hard to see how emissions at this scale are significant plug these into a climate model and they're within the uncertainty band they're even the the 27 million tons that's one tenth of the uncertainty range of the US greenhouse gas inventory so we're talking about numbers here that get lost in the rounding and I might add I might add also on the emissions front that the James Hansen game over number let's be clear about what we mean by fully developing the Alberta oil sands it's it's not going to happen in our lifetime or our children's lifetime this is 168 billion barrels of oil that those those assessments were predicated on and you know what's happening already is is frankly the development of this oil sands peace meal through other pipelines including the southern leg of Keystone XL which is going to start to accept it soon so we shouldn't talk about this pipeline as the Beall end all for the oil sands even if Canadian pipelines are blocked and ie agree with Daniel strong chance they are blocked there's major resistance so so let's talk a little bit more about this obviously I mean the the global climate problem is a huge problem and when you talk about global you know emissions figures and percentag of global emissions figures I mean anything looks pretty small uh in comparison to that you know unless you're talking about the entire National emissions of a country like the United States which itself is only a fifth of uh Global emissions but uh Dan the president said in his State of the Union Address that he wants to be able to look his children and grandchildren in the eyes and say we've done everything we can uh to help address the threat of global climate change is it your position that you know regardless of whether or not this is just an incremental increase or or not um you know this is where we have to draw the line in the sand and and big projects like this just can't move forward yeah I mean I would say a couple things to that well I want to say three things the first is that without a social movement without a global movement to regulate emissions and to tackle the climate problem we have no chance so we already know what the oil industry's Playbook is we know that they have a record of being dis honest with the Public Funding fing think tanks um doing everything they can to slow down progress in Congress um at 1600 Pennsylvania Avenue and in world capitals around the world so at some point we need to build a movement that's strong enough to push back on them Keystone you know whether or not it was the right fight I'm I'm I'm not an expert enough to decide on that but it has become B fight and so from a social movement a political Movement we need this win to show that we're going to be serious about taking on the fossil fuel industry that the president actually has an agency to stop project projects like this secondly um you know a lot of the environmental Community is really looking towards 2015 through a global deal in Paris to have a global regime to regulate emissions and uh you know if if Obama rejects the pipeline we can look the rest of the world in the face and say the United States President Obama is the first world leader to say no to a major infrastructure project based uh on on climate scenarios based on climate impacts and that carries a lot of symbolism and a lot of moral Authority um you know I think doing something like that is really going to allow us to have more space to lead the last thing I want to say is this admissions conversation having a market-based analysis doing a very dry uh you know numbers based look at this is very interesting and I'd like to dive into the numbers just as anybody else but we can't forget about the people you know there are people who live Downstream from taran's development they're experiencing huge spikes in cancer rates we already know what's going on with the communities that live around refiner communities this is an a environmental justice fight just as much as it is as a climate fight and I don't hear a lot of dialogue in the press or amongst industry you know industry or C certainly Market experts talking about the real effect on the development of the tar sands on people and I think that's something that needs to be part of this conversation can we talk I've gotta I've got to jump in here too I'm sorry and say that you know land owners and you know water rights issues in the Heartland is also something that I'm surprised is not a bigger part of this conversation you know the environmental movement has as Daniel said made this a climate fight you know but what's in the Eis is also some serious red flags on safety very few people are paying attention to the fact that it acknowledges the pipeline will leak and there's very little transparency on trans Canada's emergency response plans so we're having a climate battle and not a safety battle and I for one question whether that was an amazing call yeah I've got can go back to the people issue yeah Jeff sorry just just a second I want to follow up on the oil spill uh question because we have a comment uh from from Twitter from the folks at your energy blog who asked um how will an oil spill be discovered on the you know 1,000 plus mile long Pipeline and how quickly will it be noticed we've also uh seen questions about uh the challenges associated with cleaning up vitamin or or diluted vitamin from o Vin uh because it's uh it's much heavier than uh than conventional crude and sinks to the bottom of water bodies uh elani do you want to do you want to comment on that or Jeff what are the oil spill measures protection measures that we're likely to see and and are they likely to be adequate what does the state's e say about those issues Jeff do you know I mean I'm happy to jump in here um go ahead um state acknowledges that you know it will leak uh somewhat uh under about a thousand barrels a year on average that's just a projection as far as how it will be detected uh statistics prepared for the government show that the general public is about twice as effective as computer-based modeling systems in terms of actually finding spills um there are regulations that ask the company to develop their own plans for periodic inspections um those are rarely enforced so basically you have Trans Canada saying yes we're going to take a look we're going to walk the line we're going to have planes flying over it tough to tell whether that ever really happens what we have seen recently is as I mentioned land owners finding this themselves North Dakota a land owner discovered you know a 20,000 Barrel spill on his land that didn't go reported by the state for weeks so that's the scenario there as far as response resources Trans Canada basically and all pipeline companies it's not just Trans Canada inserted effectively a placeholder emergency response plan it's allowed to do that um it it has to develop specific plans and give them to the government but those aren't going to be given to the public in the E Jeff you want to jump in here on the spill issue or on the broader environmental issues for for land owners near the tar Sands development itself or or near the pipeline well it's it's really a combination of that I think one of one of the things that struck me when I read through the uh the Eis was the assessment of what happens if you don't build the pipeline and I think that that's something that we need to talk more about yeah um go to the human impact if you don't build the pipeline you're looking at a thousand additional rail cars of crude oil every day traversing North Amer America through significantly larger number of communities um more than 10 times as many communities become affected if this crude has to find its way to Market by rail rather than by pipeline um you look at the spill analysis it's clear you will have more spills more incidents more accidents all of those things multiply if producers are forced to go to rail now I think the thing that everybody has to remember here is that the incentive for Canada to develop this resource is enormous just for the crude that would flow through the pipeline you're looking at a figure of about a half a trillion dollars over 20 years um the idea that they're going to leave that in the ground I think is just not viable they will find some way to develop it the folks that own this oil and that are investing in developing it are every bit as motivated and resourceful in finding a way to get that oil to Market as the folks that would like to stop this project um and I think that that can't get lost in this so you know if we don't if the pipeline's not built the oil is still going to find its way to Market because this is a very resourceful industry um and you have a lot of people who are spending their time and are paid to to find solutions to that um and frankly I I think when you step back from this entire process the thing that's troubled me about it the most from the start is not that the Administration has focused on emissions I think that's totally appropriate what's troubled me is that the Administration has taken an approach um that's not focused on trying to find a solution figuring out how to to find a solution that Bridges all of these gaps all of these problems and gets gets the oil to Market in the safest and most environmentally beneficial way possible um there's lots of things that could be done including emissions offsets I don't hear anybody talking about can I yeah go ahead Dan well I just think that it's a really cynical argument to say that we have no choice in this oil is coming out of the ground no matter what I me the fact is that there's a growing social movement around climate change around environmental impacts and around econ environmental justice and we're seeing it manifest its power almost every day so you know uh I realize the oil industry has a lot of resources uh that's an unfortunate reality and many ways they use those resources to ciple democracy and ciple debate but I think it's pretty cynical to say no matter what this is coming out I can we talk about why it's coming out of the ground well I just I'd just like to finish my point but then certain please do and then on solution front you know we're already we have some solutions that are coming online all the time and you know we know the US is using less oil every day than we or every year than we used the year before we know that demand is going down not up and we know that the government has got a number of policies in place in order to get us off theard oil now unfortunately it's not moving as fast as we would like and we need a price on carbon that is the ultimate uh lever to change this but you know to say there's no solutions would be I think it's a BV and exaggeration honestly if I can jump in here and try to do a little bit of refereeing I I think what Daniel and Jeff probably won't tell you is that this has been an incredible organizing tool for the climate movement so Jeff is trying to sort of relay a bit of the facts and and when Daniel talks about social movements being the answer to that he means that it it's a lot easier to organize average Americans behind this pipeline than it is to organize them behind say EPA carbon emissions regulations which would undeniably have a bigger climate impact than this pipeline however people like Daniel are you know they need a sellable message they need a symbol and that's what Keystone is that can't be discounted that's driving a lot of this that for a minute I was just going to say most Americans don't like being told that they have no choice you know this is a fundamental thing in the US that you know we don't like being saying we don't like being told you have no options we're going to do this to you no matter what we like agency we like change we like a dynamic economic culture but you know there's something else that's baked into the American DNA and that's practicality let's talk about why the oil is coming out of the ground so 93% of the energy that's used in transportation in the United States is supplied by oil if you go and look at the Energy Information administration's forecast their very latest forecast for what's going to happen 20 years from now they think 93% of the energy used in transportation is going to come from oil why is that the case so so far 160,000 plug-in electric vehicles are on the roads in the United States those Vehicles if they use electricity for 100% of their transportation energy which they're not if they use 100% electricity it's the equivalent of 5,000 barrels a day of oil displacing the oil that would be coming down the Keystone Pipeline would require 28 million electric vehicles and it it displacing the emissions associated with that oil would require probably double that because a lot of the the electricity generated in the US is still generated from fossil fuels so yeah we have Alternatives they're going to take a very long time to have an impact and during that transition period And I believe strongly that we are in a transition period to a much cleaner Energy System we are still going to be burning billions and billions of barrels of oil and it matters a lot to the United States where that oil comes from we're talking about oil from our most reliable supplier that will displace oil coming in from OPEC suppliers and that's the bottom line what we're talking yeah sorry Alana I was gonna go to you you you tweeted a good factoid the other night um about the amount of carbon and oil saved by the fuel economy regulations that have been Advanced by the Obama Administration since 2008 and compared that to the pipeline could you go through those numbers again I mean Jeff you you talked about the limited number of plug-in hybrids on the road but we're also seeing tremendous improvements in fuel economy and and dramatic reductions in oil consumption absolutely what I did Jesse is I just plugged in the upper bound of State Department's possible carbon emissions into uh the epa's handy little tool that actually allows you to estimate um emission saved in terms of how many cars on the road how many power plants Etc it would represent and what I found is is that you're talking for Keystone less than 2 million tons of carbon saved by 2030 if it's denied according to the AIS fuel efficiency standards according to the union of concerned scientists would save 85 million cars that equivalent and obviously we're not talking actual cars but that just gives you a sense of the scale of emissions that fuel efficiency standards and what Obama has done for them represent Visa V this pipeline but I don't want to miss the chance before we run out of time here to say you know when Jeff talks about OPEC oil and getting this from a safer partner he he touches on something that's going to be crucial right now in this next phase of Keystone review which is you know the state department did not say that this would have a significant not have a significant impact on climate it it consciously left that out which a lot of media reports got a little wrong in the early going and you know the signals I get from the state department is that deals with International climate policy so in the next phase of this review state is going to be looking at what can America do and Obama has said this himself what can America do to force Canada to be cleaner in the oil sands so that's phase of this debate that's going to be a big part of the national interest determination and there's been some Great Canadian reporting from my colleagues in the Press there that Canada is sitting on oil and gas industry emission regulations it has a draft it hasn't been issuing them so so so you think there's a a potential deal in the works here where the state department works on a deal with can Canada to tighten emissions regulations on the oil industry uh in Canada in exchange for approval Daniel would call me super cynical but yeah you don't know what i' call you no that's my greatest it's one of my greatest fears that Carrie is going to stand up and say we made a deal with Canada and you know Canada's been pushing their 4040 plan for a long time to reduce emissions by 40% but Harper is not it's prime minister Harper is not a reliable trading partner this is someone who has the same sort of worldview as George Bush he's defunding science he's silencing scientists he's putting off regulations he removed Canada from Koto protocol so the idea that like we're going to be able to strike a deal with them and they're going to be serious about meeting their their commitments I think is a it's kind of a fallacy Dan it sounds like you're basically just looking for reasons to keep this thing you know in its Half-Life state so that you've got a symbol well it's a powerful symbol but I'd be really happy if the president tomorrow stood up and said no wouldn't you be happier to find a real solution that addresses the emissions here I'd be delighted yeah then then I think that's exactly what question though Jeff yeah absolutely but are those either our propositions to be fair I think the reality is there's a lot of ways to address the the emissions that don't require not building the pipeline well and I think but I think Daniel hits on a real uh Point here which is that if that deal does emerge Canada regulating its industry in exchange for the pipeline um people are going to pay a lot of attention to how effective those regulations actually are and it's undeniable Steven Harper is a very conservative leader and it's very likely those regulations will have considerable loopholes so watch for a deal but who knows how effective that deal will actually be right the Ines are enormous protocol and and did not meet any of its targets because of uh increased emissions due to primarily the development of the Alberta tarand region so I think that's a that's a careful caveat on any deal um we we're just about out of time so I want to give each of you sort of 30 seconds to give your pitch as to whether or not the pipeline is in the US national interest um we'll start with you Jeff I think it's definitely in our national interest I think it increases our access to our most reliable supplier it backs out Imports and it basically puts the oil in the safest lowest emitting form of transportation that's available and Dan uh unsurprisingly I don't think it's in the National interest I think that if we can convince the president to say no to this pipeline he'd be the first world leader to say no to a major infrastructure Project based on climate impact and that would be a very powerful symbol and Alana I know you don't have quite as much of a stake in this but uh how do you see this fitting into the US national interest well look I'm I'm paid to remain studiously objective on all this but uh so in lie of having an opinion I will make a joke that uh Keystone will only create 50 permanent jobs for operation but it's created a lot of jobs in the pundit debating and activism field so yeah Lio all right thanks well this has been an excellent conversation I really appreciate the diverse use on this um Jeff uh Alana and Daniel thanks all for joining us um and we'll continue the discussion of course at the energy collective.com and of course on Twitter uh keep it alive with the uh uh hash energy tag um or sorry energy chat hashtag we can continue the chat there thanks thanks a lot you