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Controversy over Meaning and Timing of Oil Pipeline Report

TransCanada says their proposed pipeline could free the U.S. of Middle Eastern oil imports. Opponents say DOE's report shows the pipeline is not needed

By Elizabeth McGowan

Feb 4, 2011

WASHINGTON—Allowing a Canadian company to construct a third oil sands pipeline through the nation's heartland could eventually eliminate U.S. dependence on Middle Eastern oil, while having little impact on global emissions of heat-trapping gases.

That's how oil pipeline giant interprets a new report focused on its controversial Keystone XL pipeline project.

Economists and environmental advocates reviewing the same report beg to differ with those sweeping conclusions.

At issue is a recently released U.S. Department of Energy study called "," which has sparked further debate over the long-running pipeline controversy, as Canada's prime minister visits the White House today and protesters take up positions outside.

DOE's hired the consulting firm to write the report. EnSys was tasked with evaluating what impact TransCanada's Keystone XL project would have on refining, trade and oil markets. The authors present multiple scenarios in their 124-page study.

Energy Department officials commissioned the analysis for the State Department as part of a wide-reaching environmental review of the $7 billion-pipeline proposed by Calgary, Alberta-based TransCanada. The is in the midst of updating its draft environmental impact statement.

"This study supports what we have been saying for some time," TransCanada president and chief executive officer Russ Girling said via a . "Keystone XL will improve U.S. energy security and reduce dependence on foreign oil from the Middle East and Venezuela."

Due to the international nature of Keystone XL, Secretary of State Hillary Clinton's team at the State Department is tasked with granting a thumbs up or down to TransCanada's request for a presidential permit to build and operate the 1,959-mile pipeline.  The infrastructure could carry up to 510,000 barrels of heavy crude oil from tar sands mines in the province of Alberta and across six states to refineries in the Gulf of Mexico.

A decision on the proposal is expected within the next weeks or months. The approved the project in March 2010.

Despite the involvement of several federal agencies, the State Department appears to be calling the shots over the pipeline, and was responsible for releasing the DOE report.

Liz Barratt-Brown, a senior attorney with the , pointed out to Solve Climate News in an interview the curious timing of the study's release. The study is dated Dec. 23, 2010, but it was only made public earlier this week, just ahead of Canadian Prime Minister Stephen Harper's meeting today with President Obama at the White House.

The two leaders are likely to discuss the Alberta oil sands and the new pipeline, as well as bilateral efforts on climate change, trade and security, according to news reports about the visit.

Greenhouse Gas Emissions

Last July, the gave the draft environmental impact statement that the State Department issued concerning Keystone XL its lowest possible ranking.

EPA officials said they found the document "inadequate" because of a lack of safety and spill-response planning, inattentiveness to the potential impact on Canada's indigenous communities and concerns about greenhouse gas emissions affiliated with the pipeline.

Oil Sands Pipeline Assessment Report

The Ensys pipeline assessment report clearly indicates that "Together, growing Canadian oil sands imports and U.S. demand reduction have the potential to very substantially reduce U.S. dependency on non-Canadian foreign oil, including from the Middle East." And, not accepting the sands imports means that the Canadian oil sands product will go to Asia, mostly China, and that reductions in traditional crude oil from US and Canadian will means more imports from the middle east. None of this will reduce carbon emissions. What is at issue is an energy security question. We can have a North American energy security zone and we can worry about emissions at the same time, or we can be dependent on middle east oil and worry about emission. I think the former is a better bet than the latter. I think in the volatile anti-American world we live in energy security should be the priority while we work at reducing emissions by triaging our emphasis on major sources such as power plants.

DOE Report

The DOE study DOES NOT say that mid east crudes will replace Canadian crudes if XL isn't built. It says (all else equal) mideeast crudes will replace canadian crudes if the Western pipelines (Gateway, TransMountain) ARE built. The report states this clearly "Essentially, the more WCSB crude moves to Asia, the more MiddleEast crude (displaced from Asia) moves into the USA" (p.103).

So the priority for those concerned about reducing Mideast oil imports to the US should be to reduce demand and stop the Western pipelines, not to start XL.

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