EPA hands ammunition to Keystone XL foes

The Environmental Protection Agency is advising the Obama administration to reconsider the impact of the Keystone XL pipeline on climate change, handing a small but significant victory to activists who are fighting to kill the project.

In comments filed to the State Department, the EPA suggested a controversial finding — that building the $8 billion pipeline would have little effect on global carbon emissions — should be questioned now that oil prices are near a six-year low. 

{mosads}The State Department’s conclusion, the EPA said, “was based in large part on the projections of the global price of oil” at the time, at $65 to $75 per barrel. The national benchmark of crude oil on Tuesday was $50.96 per barrel.

If oil prices remain at current levels, building Keystone would increase oil sands production and greenhouse gas emissions more than it would at higher oil prices, the agency said in its comments.

Which is why, the EPA said, the State Department should give “additional weight during decision making” to the drop in oil price, because of “potential implications” the project could have on “greenhouse gas emissions.”

The reasoning, while complicated, is critical for opponents of the pipeline.

Keystone supporters have long touted that the project wouldn’t worsen climate change because the Alberta oil sands would be used one way or another, the oil shipped by rail rather than pipe. But with falling oil prices putting a squeeze on the industry, the EPA is suggesting that the development of the Canadian oil fields could increase greenhouse gas emissions.

Environmental groups pounced on the comments to make the case that the pipeline fails President Obama’s test of whether it would worsen climate change.

“That’s the standard the president has set for rejecting Keystone XL, so we fully expect him to do just that,” said Sierra Club President Michael Brune. 

Pipeline developer TransCanada, however, maintains that the oil will get to market either way and said its shippers have not stopped asking about Keystone or other forms of transportation.

The American Petroleum Institute (API) downplayed the EPA’s comments as a “political play.”

“Suggesting that the drop in oil prices requires a re-evaluation of the environmental impact of the project is just another attempt to prolong the KXL review,” said Louis Finkel, API’s executive vice president.

The EPA also mentioned in its comments that the pipeline developers are committed to cleaning up any spills, and that more provisions to reduce spill risks have been incorporated into the permitting process since the initial environmental review.

So far, the EPA is the only agency to publicly release comments on Keystone.

After reviewing comments from across the government, Secretary of State John Kerry will have to send his recommendation to Obama on whether the project is in the national interest. While the six-year permitting review is close to the finish line, there is no deadline for Kerry or Obama to decide.

The White House on Tuesday declined to say if the EPA finding would affect its evaluation of the pipeline.

“The president has laid out his own clear criteria about how he believes the project should be evaluated, and, as a part of the process of collecting input from relevant agencies across the federal government, the EPA put out their own supplemental environmental impact study,” White House press secretary Josh Earnest said.

But he said he was not prepared to comment on “the substance of the process.”

“I don’t want to prejudge the outcome of that process until the State Department has had an opportunity to evaluate the input from all of the federal agencies,” he said.

The Republican-controlled Congress is pushing to take the decision out of Obama’s hands, with the House poised to approve legislation next week that would require the government to greenlight the project.

Obama has promised to veto that bill, however, and it appears that Republicans are short of the votes needed to override him.

Sen. John Hoeven (R-N.D.), author of the Keystone bill the House will vote on next week, said the move by EPA to release its comments offers “cover” for the president to reject the project.

“Yesterday the State Department said nobody was going to release their comments, none of the agencies, and then today the EPA releases it. So clearly it was just messaging for the president to give him some flexibility on his decision,” he told reporters on Tuesday.