keystone pipeline

How Falling Oil Prices Could Help Stop the Keystone Project

At 3 p.m. on a Friday last January, two days before the 2014 Super Bowl, the State Department released a favorable assessment of the proposed Keystone XL pipeline’s environmental impacts. Though citizens had submitted nearly two million comments during consideration of the report, the timing suggested officials hoped most people would be focused on football.

Events since then have made the State Department’s reluctance to draw attention to its assessment look like the right strategy.

January 8, 2015 | Source: Yale Environment 360 | by jacques leslie

At 3 p.m. on a Friday last January, two days before the 2014 Super Bowl, the State Department released a favorable assessment of the proposed Keystone XL pipeline’s environmental impacts. Though citizens had submitted nearly two million comments during consideration of the report, the timing suggested officials hoped most people would be focused on football.

Events since then have made the State Department’s reluctance to draw attention to its assessment look like the right strategy. The report’s assumptions about oil prices and alternatives to Keystone XL have been thoroughly undermined, and prospects for continued expansion of the tar sands, the vast Canadian oil deposit that the pipeline would link to refineries on the Gulf of Mexico, have significantly declined.

Despite this, leaders of the new Republican-controlled Congress this week pushed forward legislation that would force approval of Keystone XL, and they expected both houses to pass it this month. Congressional action was moving ahead even though the White House announced on Tuesday that President Obama would veto the legislation.

Yet during the past year, the case for the pipeline has developed huge cracks. In giving Keystone XL a pass on its environmental impacts — a step toward final approval — the State Department’s Bureau of Oceans and International Environmental and Scientific Affairs had argued that the pipeline would not generate increased greenhouse gas emissions because tar sands expansion is inevitable. If Keystone isn’t built, the report assumed, other pipelines from the tar sands would be, and railroads would provide additional capacity. These conclusions reaffirm one of the oil industry’s hoariest — and, historically speaking, largely accurate — maxims: Oil always finds a way to market.

But the maxim may not apply to tar sands crude.