Thursday, February 6, 2014

Canada-US oil-pipeline project clears hurdle

Findings of environmental impact assessment of 1,897km Keystone XL to raise pressure on Obama to approve project. The proposed oil pipeline between the US and Canada has cleared another hurdle, with a US State Department study saying the project will do little to slow the expansion of Canada's oil exploration. The 11-volume environmental impact study on the 1,897km Keystone XL - released on Friday - found that oil from the Canadian oil sands is about 17 percent more "greenhouse gas intensive" than average oil used in the US because of the energy required to extract and process it.

It is two to 10 percent more greenhouse-gas intensive than the heavy grades of oil it replaces.

The report raises pressure on President Barack Obama to approve the project, which environmentalists see as a major climate-change problem.

The study does not recommend whether Obama should grant or deny an application by TransCanada Corp to build the $5.4bn line, which would transport crude from Alberta's oil sands to US refineries.

Joe Oliver, Canada's natural resources minister, welcomed the study, saying Keystone XL will create 42,000 jobs and generate billions of dollars in economic activity.

The report reaffirmed the idea that Canada's heavy, bituminous oil sands reserves require more energy to produce and process - and therefore result in higher greenhouse-gas emissions - than conventional oil fields.

But after extensive economic modelling, it also found that the line itself would not slow or accelerate the development of billions of barrels of reserves that environmentalists say would exacerbate global warming.

Review ahead

The Keystone XL pipeline would carry as much as 830,000 barrels of crude per day from Hardisty, Alberta, to Steele City, Nebraska, where it would meet the project's already complete southern leg to take the crude to the refining hub on the Texas Gulf coast.

John Kerry, US secretary of state, will consult eight government agencies over the next three months about the broader national security, economic and environmental impacts of the project before deciding whether he thinks it should go ahead.

Erich Pica, president of the environmental group Friends of the Earth, said he was not surprised by the report.

"There's been ongoing conflict of interest with the contractors hired by the State Department to draft this report," he told Al Jazeera.

"These contractors were employed and have financial interests and business with TransCanada and other elements of the oil industry."

With another three-month review process ahead and no firm deadline for a decision, the pipeline issue threatens to drag into the 2014 US congressional elections in November.

Obama is under pressure from several vulnerable Democratic senators who favour the pipeline and face re-election at a time when Democrats are scrambling to hang on to control of the US Senate.

He indicated in a major climate speech in June that he was closely watching the review, and said that he believed the pipeline should go ahead "only if this project does not significantly exacerbate the problem of carbon pollution".

Polls show a majority of Americans support the project, although environmentalists have fiercely opposed it


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