Feb 05, 2015 - 2:45pm

2 Charts Demolish EPA’s Keystone XL Arguments


Senior Editor, Digital Content

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Sections of pipe sit on the ground in Atoka, Oklahoma. Photographer: Daniel Acker/Bloomberg.
Sections of pipe sit on the ground in Atoka, Oklahoma. Photographer: Daniel Acker/Bloomberg.

It’s been over one year since it was released, and EPA finally weighed in on the State Department’s environmental review of the Keystone XL pipeline, the one that concludes that it will create 42,000 jobs with minimal environmental impact.

EPA argues, “Given the recent variability in oil prices, it is important to revisit these conclusions.”

In other words, there should be more delays in approving the pipeline, if not a rejection.

Here are a few observations:

First, when the application for the permit for the pipeline was first submitted in 2008 oil prices were actually lower than they are today, but you didn’t hear a peep from EPA about that fact.

Second, it's entertaining to see opponents of the Keystone XL pipeline (and oil in general) cheering lower oil prices.

Third, I share the same frustration with Reason’s Ronald Bailey who writes “Why not let the builders of the pipeline decide whether or not it is economic to construct?” Studies have found that’s the “multi-billion-dollar, privately financed infrastructure” project is environmentally safe and will add to the economy. To any ordinary person, that means building it is in the national interest.

So what should we make of EPA’s comments?

Stephen Eule at the U.S. Chamber’s Institute for 21st Century Energy calls them, “very weak beer,” because they ignore the fact that not all oil is the same, and that Canadian oil sands crude has similar properties to oil imported from other countries. He explained:

What EPA overlooks—whether consciously or not—is that crude oil from Canada backs out crudes from other suppliers that have equally high life cycle GHGs. Our refiners along the Gulf Coast are geared to processing heavy, sour crudes, so if they’re not using Canadian crudes, they’re using other crudes with similar characteristics.

As you can see in this chart, as the U.S. imported more Canadian oil, imports from Venezuela, a producer of heavy crude, declined.

 

Oil from both Canada and Venezuela generates a similar amount of greenhouse gas emissions, as this chart from a 2014 Congressional Research Service report shows.

Eule concludes:

Killing the Keystone XL pipeline just means we would have to rely on imports of heavy crude oils with similar life cycle GHGs from suppliers that are not as stable or reliable as Canada. Not a very appealing prospect.

CORRECTION: I incorrectly included Nigerian oil with Venezuelan and Canadian crude. That's not the case. I will note that, in its life cycle, Nigerian oil generates a similar amount of greenhouse gas emissions as Canadian and Venezuelan crude. I appologize for the error.

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About the Author

About the Author

Sean Hackbarth
Senior Editor, Digital Content

Sean writes about public policies affecting businesses including energy, health care, and regulations. When not battling those making it harder for free enterprise to succeed, he raves about all things Wisconsin (his home state) and religiously follows the Green Bay Packers.