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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The Editor-in-Chief of Science Magazine is wrong to endorse Keystone XL

Originally published at Skeptical Science on March 3rd, 2014

An editorial by the Editor-in-Chief of Science Magazine, Marcia McNutt, conditionally endorses the Keystone XL (KXL) pipeline. Her argument is that:

  • the absence of the pipeline has not stopped oil sands development and the building of the pipeline will not accelerate oil sands development;
  • President Obama can extract concessions from the Canadians to reduce emissions and upgrade the bitumen in Canada.

Both of these arguments are wrong; let me explain why.

Pipelines promote production

The Mildred Lake oil-sands plant in Alberta. Note the tailings pond behind the huge yellow piles of sulphur, a by-product of bitumen upgrading. The sulphur may come in handy later for use in solar radiation management. Photo Wikipedia

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Andrew Weaver’s support for a big bitumen refinery on the BC coast angers Greens

Andrew Weaver, the climate scientist turned Green Party politician, has raised hackles among environmental activists by lending support to a proposal to build a huge oil refinery near Kitimat in northwestern British Columbia. Despite the headlines, his support for it is qualified, seeing it as a compromise position that will keep diluted bitumen—dilbit—out of coastal waters, even if it doesn’t keep the carbon in the bitumen out of the atmosphere. Quoted in the Prince George Citizen, Weaver says:

“I like to think [of] the Green Party as a science-based, evidence-based common sense party,” he said. “It’s a party that realizes that we need gasoline in our cars but we also need to have a strategy to wean ourselves off that.”

and

“Rail is bad news, dilbit in the water is bad news, dilbit on land over rivers and streams is potentially very bad news,” he said. “Obviously as the Green Party [MLA], I’d prefer to keep it in the ground as much as possible and start to invest sooner than later into the low-carbon economy of tomorrow, but I’m pragmatic and I recognize at some point one may need to develop a compromise and a compromise solution is one that would actually give jobs in B.C.”

On Twitter, Adam Olsen, the leader of the BC Green Party, distanced himself and the party from Weaver’s position:

11-Feb-14 11-42-10 AM

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Application to comment at the NEB Kinder Morgan enquiry

FrankejamesI have submitted an application to comment at a hearing of  the National Energy Board (Canada’s national energy regulator). The hearing  is about the proposal to greatly expand Kinder Morgan’s TransMountain pipeline, which runs from Alberta to Vancouver and will transport diluted bitumen to export markets in Asia. Once completed, the pipeline will carry more dilbit than either the better known Northern Gateway or the Keystone XL projects, some 890,000 barrels per day. In my opinion, the Northern Gateway project will probably get bogged down for years  in court challenges from aboriginal groups and  Kinder Morgan’s project is more likely to start construction first.

This was written on behalf of the Salt Spring Island Climate Action Council Society, of which I am the President. I have no illusions that this submission, which is just an application to be considered as a commenter, will be accepted. The terms of reference of the review panel have been narrowed to the extent that comments on the upstream and downstream environmental consequences of the project are deemed inadmissible. This is so arbitrary and obviously prejudicial that many people expect that the laws underlying these restrictions will be struck down by Canada’s courts. Challenges are already underway on the Northern Gateway review process. The NEB writes:

The Board does not intend to consider the environmental and socio-economic effects associated with upstream activities, the development of oil sands, or the downstream use of the oil transported by the pipeline.

As if the bitumen could be transported, without first being produced. As if the bitumen would be transported, if it were never to be consumed. It is like arguing that there’s no harm in falling off a cliff, just so long as you don’t hit the ground.

References, links  and more details can be found in my post Pipelines cause climate change, let’s talk about itHere’s what I wrote to the NEB.

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Protest the pipelines

Originally published in the Gulf Islands Driftwood on November 13th, 2013.

The version of the article below is fully referenced.

Faced with the prospect of hundreds of oil tankers every year passing through the waters off the Gulf Islands as a result of Kinder Morgan’s proposed expansion of their pipeline, concerned Salt Spring Islanders plan to rally at Centennial Park at 12:30 on Saturday November 16th as part of a nationwide protest “Defend Our Communities, Defend Our Climate”

A major oil spill in the waters of the Salish Sea would be unthinkable, with devastating and persistent effects on the coastlines and the marine wildlife that make the Gulf Islands a special place for residents and visitors alike. But just as bad will be the effects on the planet’s climate.

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Pipelines cause climate change, let’s talk about it

Stephen Harper’s government does not want Canadians to talk about climate change when considering the environmental impact of new pipelines to move bitumen from Alberta to foreign markets. Buried in the provisions of the Omnibus Bill C-38, the  Conservative government has placed clauses that restrict citizens’ rights to make submissions on climate change when testifying at environmental impact hearings.

We should contrast this with the consideration being given to climate change in the evaluation of the Keystone XL pipeline in the United States. In June 2013, President Barack Obama said:

“The net effects of the pipeline’s impact on the climate will be absolutely critical to deciding whether this project goes forward,”

It is astonishing that an environmental  impact considered “absolutely critical” in the US decision-making process, is not even allowed to be mentioned at hearings  within Canada.

Fortunately, this restriction is being challenged in the courts by the environmental advocacy group  ForestEthics and by author Donna Sinclair,  The legal team is being led by civil rights lawyer Clayton Ruby. He is quoted as saying:

“Through legislative changes snuck into last year’s Omnibus Budget Bill C-38, the Conservative government has undermined the democratic rights of all Canadians to speak to environmental issues that impact them,” explained Mr. Ruby. “We’re challenging the legislation because it violates fundamental free speech guarantees enshrined in the Canadian Charter of Rights and Freedoms.”

The Government may argue that climate change impacts of oil transportation projects are not relevant to National Energy Board (NEB) hearings, because these effects are not the direct and local environmental effects of the pipelines and tankers themselves. However, as noted energy economist Mark Jaccard has pointed out, building new oil infrastructure does indeed have a direct effect on climate change. Pipelines facilitate and accelerate the production and consumption of petroleum, that’s the whole point of them; connecting producers to consumers, enabling both.

As Jaccard noted, global effects like climate change are just local effects that occur everywhere.

Jaccard has submitted a sworn affidavit on behalf of ForestEthics and Donna Sinclair, which details how further development of the  Alberta oil sands will contribute to climate change. He concludes:

I understand that the NEB [National Energy Board] has refused to hear submissions about “the environmental and socio-economic effects associated with upstream activities, the development of oil sands, or the downstream use of the oil transported by the pipeline.” It is my view that the exclusion of these issues skews its regulatory assessment in favour of pipeline approval and ignores the most important costs and non-costed impacts that every responsible and honest society should be considering on behalf of people living today and in future.

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Terminology: Tar Sands or Oil Sands?

Generally speaking, people who are opposed to the extraction of bitumen in NE Alberta prefer to refer to the sands as “tar sands”. The oil companies and the governments of Alberta and Canada prefer the sound of “oil sands”.   “Bitumen sands” is in some ways more correct, but it’s a mouthful and not everybody will know what you are talking about. The one thing that everyone seems to agree upon is that “oil sands” sounds cleaner and nicer than “tar sands”.

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