Keystone XL Pipeline: “No Material Impact” on U.S. Carbon Dioxide Emissions

President Obama has a ticklish situation on his hands with the Keystone XL pipeline—one long on symbolism but short on practical impacts.

He took a few minutes out of his June 25th speech unveiling his Climate Action Plan to specifically address the pipeline issue:

Now, I know there’s been, for example, a lot of controversy surrounding the proposal to build a pipeline, the Keystone pipeline, that would carry oil from Canadian tar sands down to refineries in the Gulf. And the State Department is going through the final stages of evaluating the proposal. That’s how it’s always been done. But I do want to be clear:  Allowing the Keystone pipeline to be built requires a finding that doing so would be in our nation’s interest. And our national interest will be served only if this project does not significantly exacerbate the problem of carbon pollution. The net effects of the pipeline’s impact on our climate will be absolutely critical to determining whether this project is allowed to go forward. It’s relevant.

The president is balancing “our national interest” in the pipeline—which surely includes factors (or, at least, the perception of factors) like growing the economy, adding jobs, and increasing our energy security—with the pipeline’s (perceived) impacts on the climate via the carbon dioxide emissions (which he oddly terms “carbon pollution”) associated with the oil it will carry.

When it comes to growing the economy, adding jobs, and/or increasing our energy security, the estimates of the impact of the Keystone XL pipeline are all over the place—but all positive. The more level-headed analyses generally indicate the gains will probably be rather small in the overall sense.

When it comes to affecting the climate, again, the estimates are all over the place, and largely depend on assumptions as to how much leverage the Keystone XL pipeline will have on opening up the Canadian tar sands to further development. Folks who claim that the pipeline’s approval would mean “game over” for the climate assume that the pipeline is the key to opening up the 1.7+ trillion barrels of oil that are estimated to be contained in the Canadian tar sands formation. More sober analyses argue that market demands are such that the oil will be brought to market with or without the Keystone XL pipeline and, as such, the pipeline itself will have virtually no impact on carbon dioxide emissions and, by extension, climate change.

Among the latter group of analysts is the State Department, which has the ultimate responsibility for approval or denial of the project.

The State Department’s findings (as presented in the Draft Environmental Impact Statement) got a boost this week with the release of a study by the energy strategists at IHS CERA.  IHS CERA concluded that the heavy crude oil to be carried in the pipeline would either end up being transported by rail (a more dangerous alternative) or would be replaced by heavy crude from Venezuela (which has a “carbon pollution” premium as high as the Canadian tar sands). The result, according to IHS CERA, is that the Keystone XL pipeline would have “no material impact” on U.S. carbon dioxide emissions.

Moreover, as I've pointed out in congressional testimony, regardless of how you figure the carbon dioxide emissions from the pipeline’s oil, the resulting climate impact will be so small as to surely put the president’s mind at ease.

As a result, the president is left to do battle with symbolism:

• Denying the pipeline will be a symbol that he values future generations more than current ones.
• Approving the pipeline will be a symbol that environmental idealism takes a back seat to practical opportunity.

But, regardless of his ultimate decision and the symbol that he chooses to champion, the on-the-ground, real world effect of the Keystone XL pipeline—on the economy, energy security, and climate change—will almost certainly be negligible.  I doubt that the same will hold true when it comes to the political fallout.