Opponents of Keystone XL pipeline say oil sands energy from Canada “three times” more carbon intensive than conventional oil – but how accurate is that claim?
It’s long been an accepted practice among those who oppose oil in general to frame their opposition in terms of being against “foreign” oil in particular. And it’s not hard to understand why: While very few Americans support the idea of shutting down an energy source in petroleum that accounts for nearly 40 percent of U.S. energy consumption and millions of U.S. jobs, even fewer Americans think we ought to be importing more petroleum from countries whose interests might not always align with our own.
So what is a good activist to do about oil resources that don’t actually originate half-a-world away? What argument is he supposed to use when those resources are secure, affordable, proximate, and responsible for thousands of jobs here in the U.S.?
That’s the challenge facing those who would like to see the energy derived from the oil sands in Canada sent somewhere else, or better yet: nowhere at all. It’s hard to rail against “Canadian oil” (Canada’s as foreign as apple pie) and cross-border energy doesn’t seem to present much of a threat to U.S. energy security. The only arrow left in their quiver? Proffer an argument that Canadian oil is more “carbon intensive” than oil anywhere else on the planet – 300 percent more intensive if you believe a letter sent recently by Rep. Henry Waxman (D-Calif.) to the State Department. To wit:
My concern is that this project would have a major adverse impact on the carbon intensity of U.S. transportation fuel. The problem is that oil can be extracted from the [oil] sands only by using three times the energy required to produce a barrel of conventional oil.
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The “project” to which Chairman Waxman is referring is the Keystone XL Pipeline, a $7 billion pipeline project that will transport 900,000 barrels of secure petroleum a day from Canada’s oil sands region to energy consumers in the United States – first to the Midwest, then through the Mid-Continent, and on down to the Gulf Coast. Once that oil is refined, it’s off to consumers, business, manufacturers and truckers along the East Coast — who receive a significant portion of their refined fuel products via the Colonial Pipeline starting in Pasadena, Texas. But before that energy can start on its cross-border and cross-country journey, the Department of State needs to grant a permit allowing the pipeline to enter into the United States.
Although a permit of this sort may seem like a formality, there’s a lot depending on State’s decision. In addition to the $7 billion that TransCanada will invest in the project, the Keystone project will result in the creation of 13,000 family-supporting jobs in the initial construction phase alone. Maybe that’s why union officials from Canada and the Midwest flew all the way out to Washington, D.C. last week to tell State to approve the permit and allow work to get underway. Russ Breckenridge of the United Association of Plumbers and Pipefitters may have made the most poignant case of all (audio available):
“We came here today to show our strong support for the TransCanada Keystone XL pipeline. Right now the construction industry is currently facing on average 20 percent unemployment, and in some areas our members are facing 40 percent. The pipeline will begin to put our members back to work with high-quality jobs, with full benefits and worker protection.”
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With nearly one in 10 Americans out of work, signing-off on a project that has the potential to generate 13,000 jobs almost overnight would seem like a no-brainer. And to its credit, the State Department certainly appears to be leaning in that direction – having completed a draft environmental impact statement concluding that the project would result only “in limited adverse environmental impacts,” a finding on which both the U.S. Department of the Interior and Fish and Wildlife Service concurred.
All of which brings us back to the Waxman letter in opposition to the Keystone Pipeline. His main (and only real) concern with the project? Not the pipeline itself, but the stuff that will run through it: specifically, energy from Canada’s oil sands. By his math, it’s an energy resource that requires “three times the energy” to produce than conventional sources of crude – an assertion echoed by 50 other House Democrats in a letter sent to State in June. Unfortunately, this argument is both misleading on its face and, not for nothing, technically wrong.
Take a look at the chart below:
Observe that even though two of the four oil sands scenarios (on the right-hand side) register a carbon intensity marginally higher than their rivals, none of them comes anywhere close to requiring “three times the energy” to produce relative to other sources of crude represented above. And wouldn’t you know it? The only nation on this list that comes in below 100 grams of CO2 is … Saudi Arabia.
The chart comes from a report issued last summer by Jacobs Consultancy, a respected modeling and analysis shop based in Chicago that relied on the same lifecycle GREET modeling system used by EPA, the Department of Energy and environmental groups around the world. Take a moment to look at the methodology. Instead of just applying a stock lifecycle calculation to all the crude sources identified throughout, Jacobs actually models the carbon intensity outputs assuming a range of real-life, on-the-ground production scenarios – such as the flaring of gas in Nigeria, and the use of cogeneration technology (heat recycling) in Canada. The upshot? It’s clear that energy from the oil sands is nowhere near 300 percent more carbon intensive than other sources of crude.
Of course, as we know, the Keystone Pipeline is merely a stalking horse for a much more expansive policy design being pursued by the same folks who spurred the Waxman letter to State. The bigger prize is the nationwide imposition of a Low-Carbon Fuel Standard (LCFS), a purposefully complicated initiative put forward for the simple purpose of preventing secure, affordable Canadian energy resources from reaching consumers here in the United States. Last month, a first-of-its-kind study on the LCFS (commissioned by Consumer Energy Alliance, and authored by Charles River Associates) found that a nationwide low-carbon fuel policy could result in a 170 percent increase in fuel costs, and the hemorrhaging of 4.5 million American jobs.
That’s an awful lot of lost jobs in the long-term – but let’s not lose sight of the 13,000 jobs that could be created in the short term thanks to the Keystone project. Toward that end, we hope the Department of State looks at all the facts regarding energy security, job creation, economic growth and lifecycle carbon emissions when making its final decision on permitting for the Keystone XL project. If they do, it will look like a no-brainer to them as well.
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