In the recent debate surrounding the pending Keystone XL pipeline decision, new questions have been raised about the pipeline's potential impact on greenhouse gas (GHG) emissions. President Barack Obama has indicated that the relative emissions related to increased Canadian oil sands processing in US markets (resulting from the Keystone XL project) are a key criteria for the US Administration's decision. The conclusion of IHS CERA's analysis is that incremental GHG emissions from the pipeline would not be substantial.
A new report prepared by IHS CERA concludes:
1. The Keystone XL decision is a market share decision between Canada and other imported heavy oil supplies, particularly those from Venezuela.
2. Even if the Keystone XL pipeline does not move forward, we (IHS CERA) do not expect a material change to oil sands production growth.
IHS CERA essentially agreed with the conclusions of the State Department in a draft environmental impact statement issued earlier this year, which concluded that any one project—including the Keystone XL pipeline—was unlikely to have a significant impact on Canadian oil sands development or US dependence on heavy oil.
In its new report, IHS CERA also said that other pipeline projects and rail tankers will move the product if Keystone XL is not built. If Keystone XL is not built, a likely alternative oil option is heavy oil from Venezuela suggesting that Venezuela may be the #1 beneficiary of a negative decision on the Keystone XL pipeline.
By E. Lynn Grayson, Partner, Jenner & Block
Read more at Corporate Environmental Lawyer Blog by Jenner & Block LLP.
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