KEYSTONE XL:

EPA finds State Dept.'s latest review 'insufficient'

U.S. EPA says the State Department's latest review of the controversial Keystone XL pipeline contains "insufficient information" on several fronts, including greenhouse gas emissions, alternative routes and the consequences of a potential spill of diluted bitumen, which the pipeline would carry.

EPA's assessment was made public yesterday, the deadline for public comment on the State Department's ongoing review of the project.

Environmental groups questioned many of the key assertions in the department's latest draft review of the pipeline, which was released last month after TransCanada rerouted its path through Nebraska. Proponents of the conduit largely echoed State's findings, which were generally favorable in downplaying the pipeline's safety and environmental consequences.

But EPA's comments could be the most significant -- and could signal a potential effort by the agency to invoke its authority under the National Environmental Policy Act to object to the project and elevate the interagency dispute to the White House Council on Environmental Quality. EPA did not invoke that authority during an earlier review, disappointing environmental advocates at the time (Greenwire, Oct. 27, 2011).

In its comments, EPA commends State for attempting a life-cycle greenhouse gas analysis in its latest review but suggests a more robust analysis of its conclusion that the pipeline would have little effect on overall greenhouse gas emissions because oil sands producers in Alberta would transport their product to market via rail or other pipelines if Keystone XL were not built.

EPA also suggested using monetized estimates of the oil sands' social cost of carbon compared to conventional U.S. crude, noting that using current practices, oil sands would produce as much as 935 million metric tons of additional carbon dioxide-equivalent over the next 50 years.

"It is this difference in GHG intensity -- between oil sands and other crudes -- that is a major focus of the public debate about the climate impacts of oil sands crude," EPA writes.

Not the end of the road

The close of the public comment period on the draft supplemental environmental impact statement (SEIS) begins the next chapter in the years-long review of the controversial project aimed at shipping crude from Alberta's oil sands to U.S. refineries along the Gulf Coast.

The fight has become the biggest battle over climate change and energy policy in President Obama's second term, with environmental activists arguing that he must reject the pipeline as a first step in a broader effort to reduce greenhouse gas emissions while project proponents argue that it is consistent with the president's "all of the above" approach to energy policy.

The State Department plans to publicly release all the comments it received, spokesman Patrick Ventrell said yesterday, although it remains unclear how soon they would be available. State will review the comments before publishing a final SEIS and issuing its national interest determination on TransCanada's request for a presidential permit to build the pipeline across the U.S.-Canada border. The determination also will be subject to a public comment period, Ventrell said.

In addition to lengthy comments submitted on the review, 11 environmental groups also requested an investigation by the State Department's Inspector General into the contractor selected to prepare the SEIS, Environmental Resources Management Inc.

The investigation request from the Center for Biological Diversity, Environment America, the League of Conservation Voters and others cites "potential conflicts of interest between ERM and entities that may benefit from Keystone XL."

More than a million oppose

Anti-Keystone activists rallied their supporters to submit more than 1 million public comments against the pipeline by yesterday's deadline.

"It's going to take some time for State Department and the White House to go through a million comments, but when they do, they'll see a common thread: People from every part of the country in every walk of life think that this pipeline is bad for our land, water and climate," said Daniel Kessler, spokesman for 350.org, one of the groups that organized the comment drive.

A form letter prepared by Credo Action, a group that has been helping lead opposition to the pipeline, calls the review a "cynical sham" that ignores the effects of climate change, the risk of oil spills and the likelihood that the pipeline would facilitate expanded development in the oil sands region.

The goal is to demonstrate extensive opposition among President Obama's supporters rather than reiterate in detail the economic and scientific arguments against the pipeline.

"The science is clear and they're not making this decision based on science," Becky Bond, Credo's political director, said of the administration. "Now this is a political question of what is the president's legacy going to be."

The Natural Resources Defense Council, the Sierra Club, the National Wildlife Federation and other environmental groups submitted more than 300 pages of comments outlining the case against Keystone XL.

The comments question State's assumptions about whether Keystone XL would affect the pace of development in the oil sands and charge that the department did not adequately consider the consequences of other oil sands spills, such as a 2010 pipeline rupture that sent diluted bitumen into Michigan's Kalamazoo River and still has not been fully cleaned up. The groups do agree with State's estimate that the project would create 35 permanent jobs and that much of the crude transported by Keystone XL ultimately would end up being exported.

"In short, the State Department's DSEIS demonstrates that Keystone XL would bring more costs than benefits to the American people, its economy and the environment, by acknowledging that that Keystone XL would create few permanent jobs, conceding that it would serve primarily as a means to export tar sands fuel to foreign countries, and failing to even set forth a compelling need for this project," the groups argue in their comments.

The Center for American Progress, a liberal think tank close to the Obama administration, submitted comments covering much of the same ground while also making a personal appeal to Secretary of State John Kerry's history as a leading advocate of climate legislation.

"Your tireless efforts in the Senate to achieve domestic pollution reductions were remarkable," writes Daniel Weiss, CAP's director of climate strategy, in the comment letter. "Denial of the Keystone XL pipeline permit would be entirely consistent with these decades of leadership on climate change."

Nebraska landowners who are fighting the pipeline also submitted detailed comments today.

TransCanada rerouted the pipeline through that state after its earlier proposal was rejected on grounds that it crossed the sensitive Sand Hills region and risked spilling oil into the Ogallala Aquifer, a key drinking water and irrigation source. Local opponents say those risks remain, despite the new route's having won the endorsement of Nebraska's governor and state environmental regulators.

Bold Nebraska and the Nebraska Easement Action Team -- two groups organizing the local opposition -- submitted joint comments calling for additional work before moving forward with the pipeline, including a "worst-case scenario" spill analysis, review of the economic effects on family farmers and property rights study, according to their comments.

"We call on you to deny the permit for this unnecessary export pipeline that will risk our land, water, and livelihoods while enriching private, foreign corporations at our expense," the comment letter says.

Supporters point to State findings

TransCanada submitted lengthy comments in support of its proposed project, a spokesman said, but a copy was not available in time for publication.

Other pipeline supporters submitted comments largely reiterating State's findings that Keystone's environmental effects would be minimal and that its safety risks could be effectively managed.

"Importantly ... the State Department recognized that the development of the Canadian oil sands would not impact greenhouse gas production. Although the State Department was not obligated to analyze any environmental impacts outside of the United States, the SDEIS provides a clear life-cycle analysis of greenhouse gas production that would be connected to the development of the Canadian oil sands, as well as the environmental impact to wildlife, forests, threatened and endangered species, and water resources," wrote a coalition of labor unions.

"In each instance," the unions added in their letter, "all key issues raised by the SDEIS have been adequately addressed."

Two industry groups -- Canadian Manufacturers and Exporters and the National Association of Manufacturers -- said the pipeline would accentuate the already strong trade bond between the United States and Canada while boosting both countries' economies.

"In our view, the approval and construction of Keystone XL is a critical part of the true 'all of the above' energy strategy our national leaders have embraced -- one that will fuel present and future generations of jobs and economic growth," CME and NAM wrote in a joint comment letter.

The American Petroleum Institute in its comments emphasized that Keystone XL has been undergoing an "unprecedentedly thorough review" for more than four years and said it is time to move to considering the projects' other positive effects.

"The environmental assessment is but one factor in making this determination," API's comment letter says. "After spending over four years on the environment impact statement, it's certainly time to consider the other key factors in making the national interest determination, including energy security, foreign policy and economic impacts."

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