Fraser Forum

Climate change was a weak reason to reject Keystone

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On Wednesday, TransCanada, the company that would have built and operated the Keystone XL pipeline, launched two lawsuits over President Obama’s rejection of the pipeline in November.

One of lawsuits seeks damages of more than US$15 billion by issuing a claim under Chapter 11 of the North American Free Trade Agreement (NAFTA). For this suit, TransCanada argue that:

“In its decision, the U.S. State Department acknowledged the denial was not based on the merits of the project. Rather, it was a symbolic gesture based on speculation about the perceptions of the international community regarding the Administration’s leadership on climate change and the President’s assertion of unprecedented, independent powers…TransCanada had every reason to expect its application would be granted as the application met the same criteria the U.S. State Department applied when approving applications to construct other similar cross-border pipelines—including the existing Keystone pipeline, which was approved in under two years, in contrast with the seven years the Administration took to make a decision on Keystone XL. The Keystone Pipeline System has now safely transported more than 1.1 billion barrels of Canadian and American oil through Canada and the United States.”

The courts will eventually decide whether TransCanada has merit in either case. But remember, when President Obama rejected Keystone XL, he cited the urgency of climate change. However, as we previously wrote, concern over climate change was a weak reason to reject the pipeline.


Because contrary to some of the rhetoric out there, Canada’s oilsands have a very small impact on global greenhouse gas (GHG) concentrations, accounting for only 0.1 per cent of global GHG emissions.

In a 2014 interview, Fatih Birol, now the executive director of the International Energy Agency’s (IEA), said “to be frank, the additional CO2 emissions coming from the oilsands is extremely low.” And long before oil prices collapsed, when the IEA was expecting oilsands production to increase by more than three million barrels a day over 25 years, Birol added “the emissions of this additional production is equal to only 23 hours of emissions of China—not even one day.”

In fact, President Obama’s own State Department review of Keystone XL found that transportation alternatives (only rail, rail/pipeline, rail/tanker) to Keystone XL could increase annual CO2 emissions from transport by between 27.8 per cent and 41.8 per cent.

Finally, when it comes to protecting the environment from oil spills, Keystone XL has clear advantages over transportation by rail, the logical fallback if pipelines are blocked.

Our recent analysis of pipeline vs. rail safety in the transportation of oil and gas found that rail is more than 4.5 times more likely to experience an occurrence when compared to pipelines. Another analysis using U.S. data came to similar conclusions, but also found that transportation of oil and gas by pipelines is associated with fewer injuries.

Despite any political rhetoric, when it comes to moving oil and protecting people and the planet, pipelines are the best option.


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