A new application for the Keystone XL tar sands pipeline means a new review process

The State Department announced that it has received an application from TransCanada for a Presidential Permit for the northern segment of its proposed Keystone XL tar sands pipeline that the President rejected back in January. Keystone XL would carry 830,000 barrels a day of tar sands from Alberta, Canada to the Texas Gulf Coast. Tar sands are the world’s dirtiest form of oil, require a devastating process that lays waste to forests to extract tar sands bitumen, a thick low grade fuel that has significantly higher emissions that conventional crude. Tar sands pipelines also appear to pose higher risks – both in number and severity of pipeline spills. Keystone XL would grant tar sands a route through America’s heartland on its way to the international market. It would raise U.S. oil prices, put our waters and farms in jeopardy of hard to clean up tar sands oil spills, and would increase our dependence on oil – worsening climate change and undermining efforts to move to clean energy. A new application means a new review process. The environmental review for the Keystone XL process must evaluate climate, water, land, and health impacts not only of the pipeline, but of the tar sands extraction, refining and end use. The national interest determination for this transboundary energy project has to assess whether the pipeline is really needed to meet U.S. security, economic, environmental or other goals. The world of oil and our understanding of the dangers of tar sands have changed since the first time TransCanada applied for a permit for Keystone XL back in 2008. The process for evaluating this permit request needs to be thorough, rigorous, transparent and free from conflicts of interest.

So once TransCanada reapplies, what can we expect?

The process for considering whether to permit an international energy project like the proposed Keystone XL tar sands pipeline is governed by Executive Order 13337. This order empowers the State Department to consider applications for Presidential Permits, in consultation with other federal agencies and the public. The Executive Order instructs the State Department to only grant Presidential Permits for projects that are in the U.S. national interest.

However, before the State Department can make a Presidential Permit decision, it must first conduct a National Environmental Policy Act (NEPA) review of the impacts of the pipeline and assess reasonable alternatives. NEPA requires that Federal agencies prepare an Environmental Impact Statement (EIS) before making a decision that would trigger significant environmental impacts. Keystone XL would have tremendous environmental impacts - from the expansion of destructive tar sands extraction, the risk of tar sands spills across U.S. rivers and aquifers and increased refinery and greenhouse gas emissions.

The first step in the NEPA process will be to consult with government agencies, Indian tribes and the public to determine the scope and content of the environmental review for Keystone XL.  This is an opportunity to correct issues of objectivity, transparency and conflicts of interest which plagued the first environmental review prepared by Cardno-Entrix. The environmental review for TransCanada’s proposed Keystone XL tar sands pipeline should have a broad scope – including a consideration of the need for the project given numerous recent infrastructure proposals, the impacts of increase tar sands extraction in Canada associated with Keystone XL, pipeline safety issues, increased refineries emissions, increased carbon emissions associated with replacing conventional crude with tar sands, and the economic costs of continued dependence on Canadian tar sands. The review should take a hard look at areas not considered in the narrow scope of the environmental review of the earlier Keystone XL application as well as consider information about pipeline safety, species, and other areas of impact that have come to light since the review was last done on the earlier application. The review should incorporate the results of other relevant assessments such as the upcoming National Academy of Sciences study of the impact of diluted bitumen or raw tar sands oil on pipeline safety.

The impartiality of original EIS for Keystone XL prepared by Cardno-Entrix on TransCanada’s behalf has been too undermined by conflicts of interest to recycle. In the case of Keystone XL, the environmental review was done by a company that was both paid for and under contract to TransCanada to provide an EIS. It is true that federal agencies often hire third party contractors to conduct an environmental review and the costs are ultimately paid for by the project applicant. In this case, however, TransCanada appears to have largely cut the State Department out of the entire process, having selected, paid for and contracted to Cardno-Entrix to provide an environmental review for Keystone XL.

While an Inspector General (IG) investigation of conflicts of interest between the State Department and TransCanada didn’t find evidence of illegal activity, doing a job well enough to avoid going to jail is not always the same thing as doing a job well.  The IG found that the State Department’s “limited technical resources, expertise and experience impacted the implementation of the NEPA process”, forcing the Department to rely more on its third party contractor to address environmental issues. Given that its third party contractor was actually under contract to TransCanada, the problems with the EIS quickly become apparent. Ultimately, the IG concluded that EIS was not effective. Given the concerns with Keystone XL, the State Department should start from the drawing board and conduct a rigorous environmental review in which  the American public can have confidence.  This argues for a more major role being given to the Environmental Protection Agency and other agencies with specialized experience in different aspects of the assessment process.

After the scope of the environmental review has been determined, the State Department will begin to prepare a draft EIS. This review should include a rigorous review of environmental and cultural impacts of the Keystone XL project. Throughout this process, the State Department must take diligent efforts to involve interested stakeholders – and that means public meetings along the pipeline route that allows affected communities to provide input during the scoping process and comment on the draft EIS.

After the environmental review process, the State Department will consider the whether the Keystone XL tar sands pipeline is in the U.S. national interest. The National Interest Determination process is governed by Executive Order 13337 and should consider the significant environmental impacts of tar sands extraction, the risk of pipeline spills, higher refinery emissions, and the economic consequence of dependence on tar sands. The world of oil supply and transportation has changed rapidly in the United States even over the last year with additional U.S. oil reserves coming online and new pipelines being built within the United States. Both the environmental review and the national interest determination will need to consider new factors that go directly to the question of whether we need Keystone XL and whether it is actually in the U.S. national interest.

A rigorous review of Keystone XL will show that this tar sands pipeline is not in the U.S. national interest. It is not a pipeline to the United States but a pipeline through it, putting America’s heartland, rivers and aquifers at risk so tar sands producers can sell their product to international buyers at higher prices. While that may be in the interests of tar sands producers and their financial backers, it’s not in the interest of the American public.