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Economy Lab

Facts take a hit in debate over Keystone pipeline Add to ...

Andrew Leach is an Assistant Professor at the Alberta School of Business. He blogs on energy, environment, and oil sands issues at http://www.andrewleach.ca and is on Twitter @andrew_leach



As the deadline for comment to the U.S. State Department on TransCanada’s proposed Keystone XL pipeline loomed, prominent environmentalist Bill McKibben and NASA climate scientist James Hansen each voiced calls for the Obama Administration to turn down TransCanada’s request for approval to build the pipeline. As has become the norm, their objections were supported by over-estimates of the greenhouse gas implications of oil sands development.

The Keystone XL pipeline, if approved, will transport up to 800,000 barrels per day (bpd) of mostly, but not exclusively, oil sands product to the U.S. Gulf Coast. Hansen argues that an, “overwhelming objection,” to Keystone XL is that, “exploitation of tar sands would make it implausible to stabilize climate,” and mentions that, “the tar sands are estimated to contain (carbon) equivalent to about 200 ppm CO2.”

What will the GHG impacts of Keystone XL actually be? The U.S.-based Natural Resources Defense Council and a Jacobs Consultancy study commissioned by the Alberta Government each suggest a wells-to-wheels emissions factor of approximately 0.6t CO2e/bbl for oilsands. Based on these numbers, the Keystone XL pipeline will enable no more than 175 million tons (Mt) CO2e/yr, assuming the pipeline operates at capacity 100 per cent of the time, and is always carrying oil sands product. Applying Hansen’s units, the extraction, refining, transporting, and combustion of 800,000 bpd of oilsands will increase global CO2 concentrations by about 0.02ppm/yr.

But 175 Mt/yr is likely a significant over-estimate of the impact, as it’s based on the same assumption made by McKibben, Hansen, and many others. As Michael Levi at the Council on Foreign Relations points out, “to make the case that Keystone XL would greatly increase GHGs, one has to start by arguing that blocking the pipeline would substantially curtail oil sands production,” and that the production would not be replaced by other sources. If the 800,000 bpd were replaced by the least emissions-intensive U.S. domestic crude, cancelling Keystone XL and all the oil sands production needed to fill it would only reduce emissions by about 28 Mt CO2/yr, or about 0.003ppm/yr. As Levi says, at that level, “the emissions impact is largely a wash.” If not approving the pipeline means that product which would have been shipped through Keystone XL is still produced and diverted to Asia, total GHG emissions might even increase as a result.

So, where does the 200ppm figure cited by Hansen and McKibben come from? Basically, it’s an estimate of the carbon contained in the oil sands buried in Northern Alberta. To increase CO2 concentration by 200ppm, you would have to extract, upgrade, refine, and burn about 2.5 trillion barrels of oilsands at today’s emissions intensities. To put that into perspective, the current estimate of oil in place in the oilsands is about 1.8 trillion barrels, but only 10-20 per cent of that is economically extractable, and only a small fraction of these economic reserves are currently under development.

Even if we decided to extract all the bitumen we could, regardless of the cost, it would take a while to extract 2.5 trillion barrels -- at current production levels of about 2 million bpd, it would take about 3,400 years. The higher production rates expected in the coming years don’t change much -- at 5 million bpd it would take until the year 3316.

Both Hansen and McKibben suggest that oil sands emissions could increase CO2 concentration in the atmosphere by up to 200ppm, but this is both an extreme overestimate based on flawed assumptions and irrelevant to the approval of the Keystone XL pipeline. Even if the pipeline is built and in service for 100 years, it’s unlikely to lead to an increase of even 1/100th of that amount.

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