The Canadian Perspective on Keystone XL

By Mark Green

Under-noticed in the Obama administration’s obstruction of the Keystone XL pipeline is potential damage that’s being done to our relationship with Canada – our neighbor, strategic ally and No. 1 supplier of imported oil – without which our economy and way of life would be much affected.

That there’s a rupture over Keystone XL is clear in an extraordinary letter from Gary Doer, Canada’s U.S. ambassador, to U.S. Secretary of State John Kerry that was made public this week. We say extraordinary because diplomatic communications typically shy away from ruffling anyone’s feathers, and Doer’s formal complaint almost certainly is stirring things up.

Doer’s letter isn’t directed at Kerry or the State Department. Rather, the ambassador unloads on EPA’s 13^th-hour bid to “revisit” the pipeline’s potential environmental impact, which State already has studied five separate times – each review basically saying Keystone XL wouldn’t significantly affect the environment, climate or otherwise. Doer is direct in the opening lines:

I was quite disappointed to read the comments from the Environmental Protection Agency (EPA) with respect to the Keystone XL (KXL) application. The EPA derives its greenhouse gas emissions (GNGs) calculations from a study using data from 2005, two years before iPhones existed, completely neglecting the innovation and emissions reductions that have since occurred in the oil sands.

The ambassador lays out his case:

• Oil sands per-barrel emissions have fallen 28 percent from 1990 to 2012, according to Canadian government data.

• Various studies have shown that the average oil sands GHG emissions are in the same range as Venezuelan and California heavy crude oil and lower than several types of Canadian and California crudes.

• IHS-CERA determined that 45 percent of the crude oils used in the U.S. are within the same GHG intensity range as those of oil sands.

Doer writes:

The EPA selected the highest GHG value among four studies considered by the State Department, and then assumed that KXL flows at capacity over fifty years, that KXL transports only oil sands crude, and most egregiously that the only crude displaced is Saudi light. By contrast, the State Department reported oil sands incremental emissions as a range from 1.3 to 27.4 megatonnes annually. The lower figure compared oil sands to Venezuelan and Mexican heavy crudes that would be displaced. The higher figure compared oil sands to Saudi light crude, an international benchmark, which your Department noted, is not a direct competitor for heavy crude oil refineries. Clearly, the correct comparison is to the lower figure, not the higher figure.

Other points in Doer’s letter:

• In 2013 comments on the same data, EPA calculated an oil sand incremental GHG value some 46 percent lower than it now claims – an increase the agency doesn’t explain.

• EPA ignores that oil sands are produced in the only jurisdiction supplying oil to the U.S. that has imposed a carbon fee that’s dedicated to funding clean energy technologies.

• While EPA now questions State’s finding that without Keystone XL incremental volumes of Canadian oil will move to the Gulf Coast by rail, the agency didn’t examine data from the past two years showing that crude oil from Canada by rail have jumped 10-fold and continue to grow.

• EPA ignores that Canada has committed itself to an “absolute reduction” in its GHG emissions. In 2012, Canada’s GHG emissions were down 5.1 percent.

Doer sums up:

One is left with the conclusion that there has been significant distortion and omission to arrive at the EPA’s conclusions. … We would be pleased to discuss the gap between the EPA comments and the scientific analysis of the State Department.

To underscore, Doer contrasts EPA’s “comments” with State’s “scientific analysis.” Indeed, the pipeline debate is between scientific facts and political gamesmanship based on faulty analysis. Ultimately, Canada sees EPA’s maneuver for what it is: a political move designed to provide the administration with another excuse for doing nothing on Keystone XL.

It’s no way to treat a friend or family.