THE closer the U.S. State Department looks at rail transport of crude oil, the better it likes the proposed Keystone XL pipeline. Other Americans are likely to agree as they see more and longer trains of tank cars rolling through their towns and cities to bring bitumen from northern Alberta to refineries in Texas and Oklahoma.
The State Department on Friday announced its conclusion that construction and operation of the pipeline linking Alberta to Oklahoma would not increase greenhouse gas production. The State Department study is one step toward winning presidential approval for the pipeline. It is clear from the report the department was heavily influenced by the enormous increase in rail transport of crude oil over the last two years.
By the department’s estimate, the volume of Western Canadian crude oil shipped by rail through the U.S. has risen from near zero at the start of 2011 to 180,000 barrels per day at the end of 2013. For want of pipelines, a great deal of North Dakota crude is also rolling down U.S. railways. The estimates, the analysis and the conclusions were contained in the Final Supplemental Environmental Impact Statement for the Keystone XL Project.
The department reasoned northern Alberta bitumen is going to be mined and shipped with or without the Keystone XL line. Without Keystone, the bitumen may enter the U.S. by rail or it may be shipped to Canadian seaports by rail or pipeline. But the U.S. cannot block development of the Alberta tar sands by blocking the Keystone pipeline. The question to be faced, therefore, is which way the U.S. wants to see the oil move: through the pipeline to the Gulf Coast or by some other means or to some other destination.
The study compares greenhouse gas emissions and likely volumes of spills in one scenario or the other. Keystone is designed to carry 730,000 barrels per day of material from Western Canada and a further 100,000 barrels per day from North Dakota. To carry those same volumes to the Gulf Coast by rail, carriers would have to run 12 unit trains of 100 tank-cars each from Lloydminster, Sask., and another two such trains from Epping, ND. Those trains would produce 42 per cent more greenhouse gas emissions that the corresponding pipeline operation. They would probably spill 1,227 barrels per year out of the rail cars, compared with 518 barrels per year that could be expected to leak out of the pipeline. Therefore the national interest of the United States is better served by allowing the pipeline than by blocking it.
This logic is likely to prevail in the end. It may not, however, prevail immediately. The Barack Obama administration has set its sights on reducing U.S. oil imports. The president restated that goal in his Jan. 28 State of the Union address. U.S. oil imports have been reduced in recent years in part because fracking has increased domestic production and in part because the recession, coupled with improved design of automobiles, has cut oil consumption.
Whatever else might be said about the Keystone XL line, it is unmistakably designed to import oil into the U.S., in direct contradiction of the administration’s stated goal. Moreover, the environmental wing of the president’s Democratic Party follows a logic of its own and is not amenable to the kind of reasoning set forth in the State Department report. Mr. Obama and his party will pay a political price if they ignore that school of thought.
The State Department reasoned Keystone XL should be permitted because Canada has other ways of getting Alberta bitumen to market. Therefore, one way to encourage construction of the Keystone line is to pursue the other possibilities.
While continuing to make the case for Keystone, Prime Minister Stephen Harper and his government should continue to advance the Northern Gateway line to the Pacific and the Energy East project to the Atlantic. It should encourage study of an eventual export route through Churchill. Those projects can be useful in themselves and they strengthen the case for Keystone.