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Keystone cop out

For climate change activists and opponents of tar sands development, the news couldn’t have been much worse.

On Friday, the U.S. State Department released its hotly anticipated Supplemental Environmental Impact Statement (SEIS) on TransCanada’s Keystone XL pipeline, which has been the focus of a monster climate change debate Stateside.

Its shocking conclusion: that Keystone “is unlikely to have a substantial impact on the rate of development in the oil sands.”

The 2,000-page document argues that expansion of the tar sands would continue with or without Keystone approval. Michael Brune, executive director of the Sierra Club, called the State Department’s assessment “incredibly cynical.”

It’s also curious considering what Big Oil pipeline boosters, and Alberta Premier Alison Redford, have been saying while on a cross-continent tour to push Keystone approval: that the pipeline is crucial to the future expansion of the Alberta tar sands.

The proposed line is arguably a linchpin, expected to more than double the flow of crude out of the tar sands and to refineries in the Gulf from the current 300,000 barrels to more than 800,000 barrels per day.

Critics say the State Department’s report amounts to tacit approval of the Keystone project – that it provides political cover for the Obama Administration to give the pipeline the go-ahead.

Environmentalists Stateside, however, say U.S. president Barack Obama, who has already delayed the line once after mass protests, can’t talk on the one hand talk about the need to fight climate change, and on the other give Keystone approval. Looked at in that context, the State Department’s SEIS only makes Obama’s decision more difficult.

Here’s an explainer of some of the issues at play.

Breaking down Keystone: Proposed is a massive line, some 1,408 kilometres (875 miles) stretching from the U.S.-Canada border near Morgan, Montana and through five states to Steele City, Nebraska. Another 529 kilometre (300-mile) stretch has already been approved on the Canadian side of the border.

Approval of an earlier version of the project was stalled after concerns were raised about its route through the environmentally sensitive Sand Hills Region of Nebraska, which sits atop the Ogallala Aquifer, part of the High Plains Aquifer System, one of the largest on the planet.

TransCanada proposed an alternate route. But that, pipeline opponents say, is still close enough to Ogallala to pose an environmental hazard in the event of a spill.

There are other environmental obstacles. Chief among them the fact the proposed pipeline will cross more than 1,703 water bodies. Also increasing the potential for groundwater contamination: nearly half the proposed route crosses soil characterized in the State Department’s report as “highly erodible.”

Why Keystone may be a done deal: The southern section of the proposed pipeline, the so-called Gulf Coast portion (from Cushing, Oklahoma to refineries in the Gulf), was granted approval, after the Obama Administration put a halt to the Morgan to Steele City. At the time TransCanada said it was proceeding with the Gulf Coast partion of the pipeline because, according to the State Department’s report, the project had “independent economic utility.”

What the State Department’s analysis of oil markets concludes: That with or without Keystone, tar sands crude will get to refineries in the Gulf, either via pipelines not yet built but under consideration here in Canada, or by rail and sea.

Flying in the face of that claim are the fact that: demand for oil imports in the U.S., the biggest buyer of tar sands crude, is lower now than it was in 2010 U.S. oil imports are on the decline and the U.S.’s reliance on its own oil resources is expected to rise over the next 10 to 15 years.

The rail spur in the State Department’s Keystone evaluation: The SEIS posits that limiting the construction of pipelines would force more crude from the tar sands to be transported by rail.

Tar sands producers have been talking up the rail option to assure investors that Alberta crude will get to world markets one way or another. But the rail option is really only a short-term solution until more pipelines can be built.

For tar sands crude to get to refineries in the Gulf under the rail scenario would require the building of 15 new rail loading terminals – seven in Lloydminster, Saskatchewan, one in Epping, North Dakota and seven in Stroud, Oklahoma.

Each new terminal would require approximately 200 hectares (500 acres) of land, as well as new track, pipeline and storage tanks. More to the point, there aren’t enough rail cars in operation to move the volume of oil being contemplated from the tar sands. And train manufacturers can’t build them fast enough. There’s a two-year waiting period for new rail cars.

The X-factor in the Keystone debate: TransCanada’s safety record. The company has been the subject of intense scrutiny Stateside ever since two former engineers went public with concerns about the company allegedly cutting corners during pipeline construction. Canada’s National Energy Board ordered an audit of the company’s pipeline welding and inspection standards last October.

Two months later, two activists holed up in a section of pipeline during a protest against, photographed cracks in pipe about to be laid by the company as part of Keystone’s southern extension.

What’s next: A 45-day comment period on the State Department’s findings before a final decision is made, probably some time this summer. The threshold to be met for approval is a high one. Because it crosses an international border, the Keystone project must be shown to be in the “national interest” before it can be given the green light. No fewer than eight federal departments will be involved in that decision. As if things weren’t murky enough.

enzom@nowtoronto.com | twitter.com/enzodimatteo

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