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January 23, 2013

Keystone Pipeline First Challenge for Obama on Climate Change
    by Robert Kropp

With two new reports describing greenhouse gas emissions from oil sands development as even worse than expected, environmentalists and sustainable investors are likely to scrutinize the State Department's upcoming decision on the Keystone XL pipeline.

SocialFunds.com -- This week, SocialFunds.com reported on two new reports analyzing potential greenhouse gas (GHG) emissions from oil sands extraction in Alberta, Canada, both of which warned that previous estimates, as dire as they have been, failed to capture completely the potential environmental impacts of a practice that has been called "the most destructive project on Earth."

In one study, Oil Change International assessed the effects on the environment of petroleum coke, a byproduct of the refining process that can be burned in coal-fired power plants. Industry analysts who have assumed a one-for-one replacement of coal with petcoke claim that additional emissions would therefore be zero; however, the study reports, a ton of petcoke yields on average 53.6 percent more CO2 than a ton of coal. "Not including petcoke emissions in estimations of the GHG emissions of tar sands and other crude oils that yield petcoke means the climate impact of oil production is being consistently undercounted," the report argues.

The second report, from the Pembina Institute, analyzed the potential climate effects of constructing the proposed Keystone XL pipeline, which would carry crude oil from the oil sands sites in Canada to refineries on the Gulf Coast. "The per-barrel greenhouse gas emissions associated with oil sands extraction and upgrading are estimated to be 220 to 350 per cent (3.2 to 4.5 times) higher than conventional crude oil produced in Canada or the United States," the report stated. "Filling Keystone XL with oil sands will cause a 36 per cent increase from current oil sands production, for which the higher upstream emissions alone will be equivalent to the annual emissions from 6.3 coal-fired power plants or over 4.6 million cars. This value will be higher when the additional emissions from upgrading and refining in the US are considered."

Also this week, environmentalists and sustainable investors were surely pleased when, after a campaign in which climate change was barely mentioned, President Obama made it a central concern in his second inaugural speech.

"We, the people, still believe that our obligations as Americans are not just to ourselves, but to all posterity," Obama said. "We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations. Some may still deny the overwhelming judgment of science, but none can avoid the devastating impact of raging fires, and crippling drought, and more powerful storms. The path towards sustainable energy sources will be long and sometimes difficult. But America cannot resist this transition; we must lead it. We cannot cede to other nations the technology that will power new jobs and new industries – we must claim its promise. That is how we will maintain our economic vitality and our national treasure – our forests and waterways; our croplands and snowcapped peaks. That is how we will preserve our planet, commanded to our care by God. That’s what will lend meaning to the creed our fathers once declared."

Because the proposed Keystone XL pipeline crosses international borders, the US State Department has federal jurisdiction over its construction. In 2011, the State Department withdrew its support for the construction by TransCanada of the Keystone XL pipeline, after Nebraska officials objected to the proposed route of the pipeline, which would have encroached upon the environmentally sensitive Sand Hills region of the state.

But after TransCanada revised the proposed route of the pipeline, the Nebraska Department of Environmental Quality determined that the project would have "minimal environmental impacts" on the state's freshwater supplies. And this week, Governor Dave Heineman stated his support for the project, stating in a letter to Obama, "Construction and operation of the proposed Keystone XL pipeline, with mitigation and commitments from Keystone, would have minimal environmental impacts in Nebraska."

The State Department announced this week that it would delay a decision on the proposed pipeline until after the first quarter of this year. Until the decision is formalized, it is to be hoped that environmentalists and sustainable investors will remind the Obama administration of its renewed commitment to addressing climate change, and redouble their opposition to "the most destructive project on Earth."

"The President signaled that his administration would refocus on climate during his inaugural speech yesterday," Anthony Swift of the Natural Resources Defense Council (NRDC) wrote. "He can do that by saying no to this ill-advised tar sands pipeline."

And May Boeve, Executive Director of 350.org, stated, "This decision is now firmly on President Obama's desk. Approving Keystone XL would make a mockery of the commitment he made at the inauguration to take action on climate change."

A coalition of 49 institutional investors, coordinated by Ceres and representing some $2 trillion in assets under management, wrote to a trade group of 12 major oil sands producers in October, recommending the reduction of GHG emissions from oil sands extraction "to at least that of conventional oil production." But the investors also expressed skepticism that "these concerns can be adequately resolved while oil sands development continues on its present trajectory."

Following Obama's reelection, Mindy Lubber, President of Ceres, stated, "Ceres calls on President Obama and Congress to expand clean energy with the goal of 20% renewable energy by 2020 and 30% by 2030; reduce greenhouse gas emissions to levels that avoid the worst impacts of climate change; and build the resilience of our communities as they prepare for more pronounced extreme weather, such as last week's devastating Hurricane Sandy."

"We cannot afford more delays," Lubber continued. "We need action now."

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