OIL AND GAS:

Updated review of Keystone pipeline fails to silence project's critics

The updated review of the multibillion-dollar Keystone XL pipeline, released late Friday by the Obama administration, brings the project a significant step closer to approval but has done little to assuage the concerns of green groups and some locals along the line's six-state route from western Canada to the Gulf Coast.

In its supplemental review of the pipeline, which would nearly double U.S. imports of crude from the Canadian oil sands, the State Department aligned more directly with Keystone XL's opponents on the thorny issue of the greenhouse gas emissions produced by oil sands crude relative to conventional fuel. But the finding that life-cycle carbon emissions from U.S. refined transportation fuels would rise if the pipeline wins a permit did not change the department's previous conclusion in its draft environmental impact statement (EIS): that Keystone XL would have a "limited adverse" effect.

The green, public health and landowner groups that have raised questions about the pipeline for months were quick to blast the fresh State Department review, taking particular aim at the administration's proposal for a 45-day public comment period -- versus the 120 days pitched by Keystone XL foes -- and no new public hearings on the EIS.

Alex Moore, fuels campaigner at Friends of the Earth, lauded the State Department for "categorically stating that tar sands oil has far higher greenhouse gas emissions than do other forms of oil used in the U.S.," but added in a statement that "this finding alone should lead the State Department to reject the permit for this pipeline."

"Unfortunately, the American public is still not getting a complete picture of the many serious dangers that this mega-pipeline would pose," Moore said of the administration's new EIS.

Kate Colarulli, associate director of the Sierra Club's Beyond Oil campaign, aired similar concerns. "We are dismayed that the State Department is rushing forward with this process at the behest of a foreign corporation and despite the fact that there are still critical, outstanding questions that must be answered about the threats this project poses to Americans' health and safety," she said in a statement.

The pipeline has sparked an intense lobbying battle inside and outside the Beltway, as environmentalists mobilize their members and influence to dissuade the administration from OK'ing Keystone XL while the oil industry, the Canadian government and top congressional Republicans lean on the State Department to grant a permit as quickly as possible.

House Energy and Commerce Chairman Fred Upton (R-Mich.) said earlier this month that he is working on legislation aimed at expediting the approval process for the $7 billion project (E&E Daily, April 1).

Some landowners along the pipeline's route through the Plains to Gulf Coast refineries have focused their concerns on the potential local impact of any future oil spill and on questions about the use of eminent domain by the sponsor of Keystone XL, Alberta-based TransCanada Corp.

The new EIS addresses the former concern by indicating that spills of 210,000 gallons or less are less likely than smaller ruptures and would likely occur in the construction right of way, while spills of greater size "would likely require the occurrence of an event that would shear the pipeline such as major earth movement" or acts of sabotage or vandalism.

Local opposition to the pipeline is especially potent in Nebraska, where Keystone XL would cross through the ecologically sensitive Ogallala Aquifer, which provides much of the state's drinking water. Sen. Mike Johanns (R-Neb.), who has called on TransCanada to route the project away from the aquifer, expressed concern to local reporters on Thursday that the company may be too hasty in restarting land-use talks with locals before a final permitting decision comes down from the State Department.

"[H]ow do you acquire an easement for a pipeline that has not been permitted?" Johanns said last Thursday. "So it just occurs to me that they're way out there on a limb."

TransCanada and its supporters point to already-built pipelines that run through the aquifer and describes the company's spill-response and safety planning as highly advanced.

Click here to read the supplemental environmental impact statement on the pipeline.

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