Despite environmentalists' efforts to stall the approval of Keystone XL, some real progress could soon be made.
The State Department released its long-awaited analysis of the project's environmental impact earlier this year. The study's key finding: building and maintaining Keystone would have virtually no effect on global carbon emissions. Indeed, without the pipeline, emissions could rise because the oil will be transported by more carbon-intensive means.
So the Obama administration's justification for stalling approval collapses. Environmental activists now find themselves in an ironic place. They're staunchly opposed to Keystone XL, but after going all out politically to block construction, activists are realizing that crude oil is still making it from Montana, North Dakota, and Canada to Gulf Coast refineries.
If the environmentalists' primary goal was to discourage the production of Canada's oil sands and prevent its importation, they have failed miserably.
Their staunch opposition has actually encouraged entrepreneurs to use less environmentally friendly surface modes of transportation to deliver Canadian and Upper Midwest crude to southern refineries. Now, this new report may finally force the federal government to act on Keystone XL.
Canadian oil companies plan to develop the oil sands with or without Keystone XL. If the oil sands are moved via rail and tanker instead of pipeline, the result will be a 28 percent increase in greenhouse gas emissions. Similarly, transporting to existing pipelines via rail instead of Keystone will create almost 40 percent more emissions. Using only rail to transport the oil sands to the Gulf of Mexico will increase emissions 42 percent.
In the last six months, several Canadian oil companies have announced rail projects designed to avoid Keystone opposition. They're building three large terminals in western Canada which will be able to load an estimated 350,000 barrels of oil daily-about 40 percent of Keystone's planned capacity-on U.S.-bound trains. Overall, Canada is expected to quadruple its oil loading capacity to 900,000 barrels daily.
The blockage of Keystone XL has also encouraged barging Canadian oil to the United States. In fact, one firm already plans to upgrade a dock on Lake Superior where Canadian crude will be loaded onto barges for shipment through the Great Lakes.
In the Northwest, refining giant Tesoro and oil service company Savage are seeking permits to construct a 42-acre facility at the Port of Vancouver on the Columbia River that could handle 380,000 barrels of oil a day.
Furthermore, it appears that a pipeline to carry Canadian crude to the Lower-48 will be built anyway, despite the environmentalists' best efforts. Enbridge has received permission to begin construction of its Flanagan South Pipeline stretching from Illinois to Oklahoma.
Unlike Keystone XL, Flanagan South will not cross the U.S.-Canadian border and does not need presidential approval. The Sierra Club and National Wildlife Federation recently sought an injunction to stop construction, but a U.S. District Court Judge ruled against them, noting that the environmental groups failed to prove "irreparable harm" would result if construction proceeded while litigation to stop the pipeline continued.
President Obama has delayed deciding on Keystone XL for five years, choosing instead to conduct study after study. With the State Department putting environmentalist hysteria to bed, he has 90 days to determine if the project is in the nation's interest.
While his delaying tactics may have shored up his base, the president can no longer refuse to choose the best energy option for America. Government data projects that oil and natural gas will continue to account for 60 percent of America's energy needs and more than 90 percent of its transportation fuels for years to come.
So long as the president continues to delay and environmentalists focus on short-sighted political gains, America is missing out on an economic-environmental win-win.
Robert L. Bradley Jr. is CEO and founder of the Institute for Energy Research and the author of seven books on energy history and public policy.