How much does EPA’s objection to Keystone XL matter? A lot.

April 23, 2013
A Keystone protester outside the Ronald Reagan Building. (Washington Post)
A Keystone protester outside the Ronald Reagan Building. (Washington Post)

How much does it matter that the Environmental Protection Agency has officially questioned aspects of the State Department’s draft environmental review of the Keystone XL pipeline proposal?

A lot.

The State Department is the agency in charge of deciding whether the administration should give a presidential permit to TransCanada to build a pipeline to transport heavy crude oil 1,179 miles between Hardisty, Alberta, and Steele City, Okla. (The Obama administration has already given all the necessary federal permits to construct the 485-mile southern leg of the pipeline known as the Gulf Coast Project between Steele City and Port Arthur, Tex., which is two-thirds built.) But other agencies can weigh in on the project, and force President Obama to serve as the final referee.

At the end of February the State Department released a draft environmental impact assessment of the project, suggesting that the project would have little impact on climate change because the oil it was shipping would be extracted anyway even if the pipeline wasn’t built.

But in a letter Monday, the EPA suggested the draft assessment may have underestimated the climate impact of the pipeline, which could transport as much as 830,000 barrels of diluted bitumen crude to refineries in Texas.

Cynthia Giles, assistant administrator in EPA’s Office of Enforcement and Compliance Assurance, suggested the total amount of greenhouse gas emissions linked to the project could be higher than State estimated because State assumes the energy-intense crude oil would be extracted and shipped by rail if the pipeline is not constructed.

Keystone opponents have argued that trains can carry nowhere near the amount of oil that a pipeline could, therefore blocking the pipeline would create a transportation bottleneck and slow down development of the oil sands.

The letter states that the State Department’s analysis “regarding energy markets, while informative, is not based on an updated energy-economic modeling effort… This analysis should include further investigation of rail capacity and costs, recognizing the potential for much higher per barrel rail shipment costs than presented in the” draft assessment.

In addition, Giles argued that when it comes to the potential of a spill of diluted bitumen  from the pipeline, State needs to “more clearly acknowledge that in the event of a spill to water, it is possible that large portions of dilbit will sink and that submerged oil significantly changes spill response and impacts.” Two pipeline spills of diluted bitumen, in Michigan in 2010 and in Arkansas this year, have raised concern about the challenge of cleaning up heavy crude from Canada.

EPA’s objection to the State Department’s draft analysis not only provides opponents with political ammunition, it could force President Obama to directly weigh in on the permitting decision if they raise similar objections later when State conducts a national interest determination. As long as no other agency objects, State can issue a ruling on the pipeline on its own; if EPA challenges the national interest determination the State Department makes at the end of its review process, Obama himself would have to issue the final permit decision.

This is not the first time EPA has questioned the State Department’s assessment of the project’s climate impact. The agency sharply criticized a previous draft EIS the State Department issued in April 2010, saying the review did not fully explore the potential environmental impact or the prospect of a more rapid transition to alternative energy that would make the imports unnecessary.

Opponents of the project, who have already generated 1 million comments on the draft review, were quick to tout the EPA’s objections on Monday. "The Environmental Protection Agency's letter shows that despite multiple tries, the State Department is incapable of doing a proper analysis of the climate, wildlife, clean water, safety and other impacts of this disastrous and unneeded project,” said Jim Murphy, senior counsel for the National Wildlife Federation, an advocacy group.

Just as rapidly, backers of the Keystone project dismissed EPA’s concerns.

"The EPA's objections to the State Department's draft [environmental impact statement] demonstrate once again that the EPA is more interested in promoting a political agenda than protecting public health and safety,” said Jack Spencer, a senior research fellow at the conservative Heritage Foundation. “The XL pipeline has been studied extensively and has been found to be environmentally safe twice. The administration's continued foot dragging on the essential project is simply inexcusable when so many Americans are out of work.”

In a statement Monday night, State Department spokesman Patrick Ventrell said the agency “has always anticipated that in preparing a [final environmental review] it would conduct additional analysis and incorporate public comments received on the” draft review.

The State Department can potentially address can address EPA's concerns before issuing its final supplemental environment impact statement, in which case the administration may have a unified view on Keystone's impact.

Still, the EPA’s objection serves as a reminder that Keystone XL remains a political headache for the administration which never seems to go away.

Juliet Eilperin is a White House correspondent for The Washington Post, covering domestic and foreign policy as well as the culture of 1600 Pennsylvania Avenue. She is the author of two books—one on sharks, and another on Congress, not to be confused with each other—and has worked for the Post since 1998.
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