Report Claims Keystone Will Not Increase Emissions

A fairly new report from IHS claims that importing oil sands from Canada is unlikely to increase net emissions of greenhouse gasses in the United States. This is important because one of President Obama’s requirements for approving the Keystone XL Pipeline was that it didn’t increase emissions. According to IHS, the emissions from the Canadian oil sands are similar in intensity to oil that the United States would import if we didn’t have sufficient capacity to import oil from Canada:

Although oil sands are among the more GHG-intensive crudes, they are not the most intensive—nor are they as high carbon as many commonly cited estimates. On a wells-to-wheels basis—accounting for emissions produced during crude oil extraction, processing, distribution, and combustion, including from upstream fuel consumed in crude production and processing facilities—the GHG emissions from oil sands are 4% to 23% higher than from the average crude consumed in the United States, using a 2005 baseline. For the average oil sands product actually exported to the United States, life-cycle GHG emissions are only 12% higher. As shown in Figure 7, sources of supply from other oil-producing regions are in the same range as oil sands. For example, the GHG emissions of Venezuelan crude, the most likely alternative to oil sands in the USGC, are in the same range as oil sands (4–20% higher than the average crude refined in the United States). (p20)

They also have a nice graph displaying the greenhouse gas intensity of oil produced from various locations:
ghgIHS also has a slightly more blunt report titled: “KEYSTONE XL PIPELINE:  NO MATERIAL IMPACT ON US GHG EMISSIONS.” From the introduction:

•The Keystone XL decision is also a market share decision between Canada and other imported heavy oil supplies, particularly those from Venezuela.
With or without oil sands supply to the US Gulf Coast (USGC), refiners there would continue to process heavy crude oils, since they are configured to run
these grades. The most likely alternative USGC heavy oil supply is Venezuelan crude which is in the same GHG emissions range as oil sands. Consequently,
if oil sands were not consumed in the Gulf Coast, there would be little to no change in the overall GHG intensity of the US crude slate.

•Even if the Keystone XL pipeline does not move forward, we do not expect a material change to oil sands production growth. Therefore the Keystone
decision itself will not have any impact on GHG emissions. Without Keystone, alternatives will be developed including other pipeline projects and crude delivery
by rail. Not including Keystone XL, the volume of proposed pipeline capacity exiting western Canada currently totals 3 million barrels per day (mbd). Eighty
percent of this proposed capacity connects Alberta with Canada’s west and east coasts, and obviously would not involve any US government approval.
Even if new pipelines lag oil sands growth, rail will fill the gap, as it is doing today. With more investment, rail economics could approach those of pipeline.

It doesn’t appear that the average greenhouse gas intensity of the U.S. oil supply is going to change regardless of the fate of the Keystone XL Pipeline. And while it does appear that rail capacity will eventually be able to handle the same volume as the pipeline could, it is very silly to use railroads for oil if pipelines are available. As we have seen recently in the news, transporting oil via rail is much more dangerous than via a pipeline.


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