Keystone XL pipeline not needed: US State Dept. report

The primary argument used in favour of the controversial Keystone XL oil sands pipeline has been that building it is essential to delivering jobs, oil and energy security. The US State Department’s recently released draft environmental impact assessment (DEIA) disagrees.

The DEIA specifically evaluated what would happen if President Obama said "no" and denied Keystone XL a permit. It concluded that not building the pipeline would have almost no impact on jobs; on US oil supply; on heavy oil supply for Gulf Coast refineries; or even on the amount of oil sands extracted in Alberta.

Here are the details and money quotes:

Few or no jobs:  The DEIA says Keystone XL's permanent jobs would provide "negligible socioeconomic impacts."  Building Keystone XL would create 35 permanent US jobs -- plus 3,900 jobs for one or two years during construction. That's it. The construction jobs represent three hundredth of one percent of America's 12.5 million unemployed workers. It would take the construction of 380 Keystone XL pipelines all at once to reduce the US unemployment rate by a single percentage point. But even this relatively small number of jobs might be an over-estimate because the DEIA also says that not building Keystone XL could lead to a similar number of jobs being created. If rail replaces the pipeline there would be 65 permanent US jobs plus 2,400 US jobs for around two years of construction of rail infrastructure, etc. It even seems possible that building Keystone XL could lead to a net loss of US jobs compared to not building it.

No change to oil development in Canada: "denial of the proposed Project is unlikely to have a substantial impact on the rate of development in the oil sands." "If the Department was to deny the Presidential Permit for the proposed Project … production and transportation of WCSB and Bakken crude oil would remain unchanged." 

No change in heavy oil for Gulf Coast refineries: The "denial of the proposed Project is unlikely to have a substantial impact on the … amount of heavy crude oil refined in the Gulf Coast area."

No impact on USA oil supply: First, America doesn't need to  import any more oil because "the increase in U.S. production of crude oil and the reduced U.S. demand for transportation fuels will likely reduce the demand for total U.S. crude oil imports." And secondly, not building Keystone XL "would not substantially influence the … overall volume of crude oil transported to the United States or refined in the United States."  

The DEIA has effectively neutered the pipeline; stripped it of its power.

It concludes that President Obama can deny Keystone XL a permit without causing any significant loss of jobs, oil supplies or even Canadian oil sands production levels. The DEIA gives the President cover to say "no" should he decide to.

And clearly the pressure to say "no" has been building.

Keystone XL has become the focus of the largest climate protests in American history. Over a thousand citizens have been arrested in protest. This could be the first time more citizens are arrested protesting a project than the number of jobs the project might deliver. Add to that the biggest environmental demonstration in a generation just saw up to 50,000 citizens march in the bitter cold of Washington DC to demand President Obama say "no" to the pipeline.

Faced with a hostile branch of Congress, Obama has a very short list of high-profile climate actions he can take. Keystone XL is near the top. In fact, Keystone XL was selected by climate activists explicitly because the decision rests completely in the hands of the President and nobody else.  

The swelling ranks of climate activists are demanding a clear message from America -- tea in the harbor -- a symbol that preserving a safe climate requires a new approach to our biggest energy decisions. They want a "no" to Keystone XL.

Against this backdrop lands the new DEIA that concludes Obama can indeed say “no” with little jobs, oil or economic downsides.

Backers of the pipeline, however, point out that the same DEIA concludes Keystone XL won't cause a big increase in climate pollution. Therefore, they argue, Keystone XL shouldn't be denied because of climate concerns.

It sounds simple, but the world and the climate crisis isn’t that simple. What their reasoning ignores is the fact that Keystone XL has three other major climate vulnerabilities with plenty of power to take it down. These are:

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