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Whatley: Keystone XL makes dollars and sense

Michael Whatley

One of the first pieces of business this year for the new Congress has been passing legislation to approve construction of the long-awaited Keystone XL pipeline. The Senate passed a bill last month and the House recently passed the Senate’s version. President Barack Obama appears likely to veto it.

The economic reasons are endless for building the pipeline to transport oil from Alberta, Canada, to Texas and the Gulf Coast. It would add 42,000 direct and indirect jobs during construction. It will contribute more than $20 billion to the U.S. economy. The 830,000 barrels of Canadian and American oil per day the pipeline would deliver would help reduce gas prices, advance national security, increase energy self-sufficiency and decrease the U.S. trade deficit.

However, what frequently falls by the wayside are the numerous environmental protections that TransCanada has agreed to build into the proposed 1,179-mile pipeline. Not only will it be the safest pipeline ever built in the United States but, contrary to what its critics say, multiple studies show that it will actually lower, not increase, greenhouse gas emissions.

The State Department analysis of the project’s potential environmental consequences, for instance, showed that the pipeline will have a “negligible impact” on carbon emissions because the oil sands in Canada would be developed regardless of whether the cross-border pipeline is built.

If the pipeline is built, according to the State Department analysis, greenhouse gas emissions would total some 1.44 million metric tons per year. This would account for about 0.022 percent of the total U.S. carbon emissions reported in 2012, which was 6.5 billion metric tons, the lowest amount in 20 years.

Despite this analysis, the U.S. Environmental Protection Agency recently sent a letter to the State Department urging the department to re-evaluate its analysis of the carbon impact of Keystone XL. While the EPA claims that the recent drop in oil prices changes prior calculations of impact from the State Department, others have argued that the EPA’s conclusions are wrong, both in its estimates of additional emissions from oil sands and the long-term continuation of low oil prices.

More important, even if the pipeline is not approved by Obama, the Canadian oil sands will eventually be developed and exported to the U.S. via rail or to Asian markets on tankers, even as the United States continues to import from politically unstable places such as Venezuela and the Middle East. Importing oil from overseas has higher carbon emissions than transporting it via the pipeline. In fact, the pipeline would produce about one-third the greenhouse gas per barrel as oil shipped by sea from the Middle East. Sending the Canadian oil via pipeline to Texas will produce about one quarter the greenhouse gases per barrel as shipping it by sea to China. This is a significant net reduction in emissions.

Pipeline critics also condemn oil-sands extraction as significantly more carbon-intensive than other types of oil production. But, as Fatih Birol, chief economist at the International Energy Agency, said, “The difference in getting oil from oil sands when compared to conventional oil, it is such a small contribution that it will be definitely wrong to highlight this as a major source of carbon dioxide emissions worldwide.”

The numbers don’t lie. Constructing the Keystone XL pipeline will be a win-win for American consumers, both economically and environmentally.

Now, it’s up to our policymakers to get this right and finally support this long-awaited project. It’s clear in poll after poll that the majority of Americans already do. We hope the president looks a bit more closely at the facts and makes the clearly correct decision to support the issue and approve this “shovel-ready infrastructure project.”

Michael Whatley is executive vice president at Consumer Energy Alliance.