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How OPEC Has Papered The Oil Market Cracks

How OPEC Has Papered The Oil Market Cracks

OPEC’s oil production agreement took…

Researchers Say U.S. Omitted Supply/Demand From Keystone XL Pipeline Equation

A new analysis of the proposed Keystone XL pipeline says the project could be far worse for the world’s environment than estimated by the U.S. government.

Washington has delayed a decision on approval of the proposed pipeline for further study of its environmental impact. Keystone XL would transport an estimated 820,000 barrels of oil sands each day from the province of Alberta in western Canada through several U.S. states to the coast of the Gulf of Mexico.

President Obama promised in June 2013 that the State Department would approve the pipeline only if it “does not significantly exacerbate the problem of carbon pollution.” The State Department must give final approval because it involves a contract with a foreign country.

In January 2014, the State Department issued a report saying it expected that any environmental impact would be the same whether the Keystone XL is built or not because, either way, Canada will extract and sell the oil.

Now, in a study published in Nature Climate Change, Peter Erickson and Michael Lazarus of the Stockholm Environment Institute in Seattle, argue that the State Department report didn’t address how the pipeline would affect the world’s supply of oil and the demand for it.

In fact, Erickson’s and Lazarus’ report says the Keystone XL, if approved, could be responsible for four times more toxic emissions than the State Department had estimated. They report that “there is no indication” that the U.S. estimates didn’t calculate that the new oil delivered by the pipeline probably would lead to a global decrease in prices, thus encouraging greater consumption and pollution.

“We find that for every barrel of increased production [of oil shipped through Keystone XL], global oil consumption would increase 0.6 barrels owing to the incremental decrease in global oil prices,” the study said.

It concluded that exploiting the Alberta oil sands could increase toxic emissions by 1.3 million to 27.4 million metric tons a year, raising them to between 100 million and 110 million metric tons annually. This is “four times the upper State Department estimate,” the study said.

Mark Jaccard, of Simon Fraser University’s School of Resource and Environmental Management in Burnaby, British Columbia, said the report’s conclusions seem legitimate. But he cautioned that uncertainty remains about the size of the pipeline’s effect on the environment.

Natural Resources Canada said in an e-mail statement to The Toronto Star that it agrees with the U.S. analysis that “Keystone XL will be safer and less emitting than alternative options.” The ministry said the study by Erickson and Lazarus falsely assumes that “the prevention of construction of one pipeline will affect Canadian oil production levels.”

By Andy Tully of Oilprice.com



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  • jbutzi on August 13 2014 said:
    “We find that for every barrel of increased production [of oil shipped through Keystone XL], global oil consumption would increase 0.6 barrels owing to the incremental decrease in global oil prices,”

    That is really hard to believe. Has it ever happened with any other single oil source to anywhere near that degree? Isn't it already being produced (not at full capacity) and used in Canada and US?

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