Keystone XL: Oil Markets and Emissions

Originally posted at Skeptical Science on September 1st, 2014

  • Estimates of the incremental emission effects of individual oil sands projects like the Keystone XL (KXL) pipeline are sensitive to assumptions about the response of world markets and alternative transportation options.
  • A recent Nature Climate Change paper by Erickson and Lazarus concludes that KXL may produce incremental emissions of 0-110 million tonnes of CO2per year, but the article has provoked some controversy.
  • Comments by industry leaders and the recent shelving of a new bitumen mining project suggest that the expansion of the oil sands may be more transportation constrained and more exposed to cost increases than is sometimes assumed.
  • Looking at the longer-term commitment effects of new infrastructure on cumulative emissions supports the higher-end incremental estimates.

President Obama (BBC) has made it clear that the impact of the Keystone XL (KXL) pipeline on the climate will be critical in his administration’s decision on whether the pipeline will go ahead or not.  However, different estimates of the extra carbon emissions that the pipeline will cause vary wildly. For example, the consultants commissioned by the US State Department estimated that the incremental emissions would be 1.3 to 27.4 million tonnes of CO2 (MtCO2) annually. In contrast, John Abraham, writing in the Guardian (and again more recently), estimated that the emissions would be as much as 190 MtCO2 annually, about seven times the State Department’s high estimate (calculation details here).

The variation in the estimates arises from the assumptions made. The State Department consultants assumed that the extra oil transported by the pipeline would displace oil produced elsewhere, so that we should only count the difference between the life-cycle emissions from the shut-in light oil and those of the more carbon-intensive bitumen. In addition, they estimated that not building KXL would mean that bitumen would instead be transported by rail, at slightly higher transportation costs. Abraham simply totted up all of the production, refining and consumption emissions of the 830,000 barrels per day (bpd) pipeline capacity and did not consider any effect of the extra product on world oil markets.

Neither set of assumptions is likely to be correct. Increasing the supply of any product will have an effect on a market, lowering prices and stimulating demand (consumption) growth. Lower prices will reduce supply somewhere.  The question is: by how much?

An interesting new paper in Nature Climate Change (paywalled, but there is an open copy of an earlier version available here) by Peter Erickson and Michael Lazaruares ,attempts to answer this question. The authors are based in the Seattle office of the Stockholm Environment Institute (SEI).
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Don’t Even Think About It: Why our Brains are Wired to Ignore Climate Change—a book review

George Marshall has written a book that is essential reading for everyone interested in communicating the science of climate change and its urgent policy implications. Don’t Even Think About It: Why Our Brains Are Wired to Ignore Climate Change comprises 43 short and well-written chapters that explain why  strenuous efforts to spread the word and spur action on climate change have failed.

There is no question that the problem is far from licked: the Keeling Curve continues its upward rise; American conservatives remain stuck in an intellectual dead end on climate; other countries pay lip service to the threat while making only token gestures to solve it; every year there is a big international get-together at COP meetings where thousands of delegates gather to push the policy boulder up Sisyphus’ hill, only to watch it roll down again. Opinion polls, it is true, show that there is broad public acceptance of the scientific basis of climate change, but the understanding of the problem is shallow. People say they care about climate change, but when it comes time to vote, other issues loom larger.

Marshall has worked for 25 years as a campaigner in environmental movements, including Greenpeace US and the Rainforest Foundation. He is a co-founder of the Climate Outreach Information Network, a UK based charity committed to ensuring that climate change and its impacts are understood and acted upon. Continue reading