Tuesday, March 05, 2013

Keystone XL Draft SSIS

Comments on:

United States Department of State
Draft Supplemental Environmental Impact Statement (SSIS)
For the
Applicant for Presidential Permit:
TransCanada Keystone Pipeline, LP

Project site with full text of all documents:    http://www.keystonepipeline-xl.state.gov/


The decision on the Keystone XL permit should be made on a variety of considerations, one of which is environmental concerns.  The NEPA documents prepared by United States Department of State (DOS) on this issue fail to provide a balanced analysis of environmental issues.  The President of the United States (POTUS) may decide that other considerations overwhelm any and all environmental considerations, but that is no excuse for DOS to provide a deeply flawed Supplemental Environmental Impact Statement (SSIS) to POTUS as decision support.

The Draft SSIS does not present balanced analysis of environmental issues related to the decision to permit or not permit.  It appears that the DOS was outside of its area of expertise in the management of the National Environmental Protection Act (NEPA) process and development of the Draft SSIS.  This has allowed the oil industry and its contractor (ERM) to manage the DOS, rather than the DOS managing the content of the document.  As this document stands, it demonstrates that DOS cannot resist the influence oil companies, including oil companies of foreign states, to prepare a balanced, fact based, decision support document on a topic of great importance to the US.

A failure to produce a NEPA compliant Environmental Impact Study would open the entire decision to judicial review, even if the final decision was based on non-environmental considerations.

Specific issues are as follows:

1       The market analysis makes it appear the oil reserves will be exploited whether or not the permit is granted.  This issue cannot be factually determined without a global analysis of refining capacity, which the document does not supply. Moreover, the document does not consider the options of the Department of State (DOS) or President of the United States (POTUS) such as specific conditions on the pipeline permit.  Failure to consider DOS/POTUS options rather than (purported) oil industry options make the document non-compliant with NEPA.

The National Environmental Policy Act (NEPA) requires an analysis of the environmental impacts the entire life-cycle of the KEYSTONE XL PROJECT.  That includes carbon emissions and affects on climate change and global warming.  The amount of carbon released into the atmosphere as carbon dioxide (CO2) and methane (CH4) for every unit of useful l energy is critical to this analysis. The mining of tar sand bitumen uses more energy and releases more CO2 than the production of conventional crude.  The mining process releases significant amounts of CH4. And the refining of diluted bitumen (dilbit) produced to allow transport of tar sands material through unheated pipelines into consumer fuels is more energy intensive than the refining of conventional crude oil. The life cycle production and release of greenhouse gases to produce a unit of energy is not addressed. 

3     Total cost per unit of energy will determine how much of the Alberta Tar Sands are mined.  If the pipeline is not approved then the price of energy from the Alberta Tar sands will be higher, and less used in the near term.  In the near term without the pipeline, we will use more conventional oil, which results in much lower greenhouse gas emissions per unit of recovered energy.   The entire analysis of alternative transport options (rail) available to the Alberta tar sands industry is a diversion.  The NEPA analysis of options should have been an analysis of options available to the POTUS/DOS.   This was not done.  A review of possible industry responses such as transport by rail should have been included as an appendix to provide POTUS/DOS staff with insight as to possible oil industry responses to the decision made by POTUS. The analysis of possible industry responses should have analysis such as global refinery capacity to provide POTUS/DOD staff with useful knowledge as to which industry responses are potentially real, and which has been offered up by the oil industry as bluster and bluff to push POTUS toward a decision allowing greater oil industry profits.

     The Draft SSIS lumps conventional crude oil, synthetic crude oil, and dilbit together as being similar in composition and quality to the crude oils currently transported in pipelines in the US and being refined in Gulf Coast.  However, while these different fluids may behave similarly (in the short term) while in a pipe or tank, after release (spill, leak) into the environment, they have different fate and transport behaviors, and very different environmental toxicity.    In particular, spills of conventional crude and dilbit behave very differently when spilled into water.  The authors of the Draft SSIS seem intent on avoiding any discussion of the fate and transport of dilbit in the environment or the environmental toxicology of dilbit. The Draft SSIS contains no information on the toxicology of dilbit. The SSIS should disclose the environmental fate and transport mechanisms  and environmental toxicity of dilbit in detail.

And, the truth is that because dilbit is more corrosive and erosive in pipeline systems, over the practical lifespan of the system, spills are more likely.  This is one of the lessons learned from the operation of dilbit pipelines in the US that needs to be addressed in detail in the SSIS.

         The Draft SSIS is not compliant with NEPA as it does not address likely impacts of the ongoing operation of the pipeline.  In particular, long term leaks seeping into aquifers are ignored.   For example, hazardous material spills during construction are addressed in more detail as a diversion from the more serious issue of spills during operation of the pipeline.  While hazardous materials spills during pipeline construction are frequently more numerous, they are generally small.  And, there are generally some leaks and spills during pipeline startup, but everybody is alert, and these are caught quickly and remain small.  It is after years of pipeline operation that significant leaks and spills develop.  The Draft SSIS deals with the hazardous materials (hazmat) spill issues during construction by including “boilerplate“ of generic oil infrastructure construction procedures without an warranty from the pipeline constructor that such procedures will be followed .  This is not informative as there is no warranty that such procedures will be followed.  In fact, the inclusion of such materials suggests that ERM has a relationship and conflict of interest with potential pipeline constructor(s).  The Draft SSIS glosses the engineering basis of design for leak detection, leak prevention, and spill cleanup of spills from the sustained operation of the pipeline.   The Draft SSIS does not recommend procedures for the sustained operation of the pipeline.  One option of POTUS not addressed in the Draft SSIS is to set specific engineering basis of design for leak detection, leak prevention, and spill cleanup of spills from the sustained operation of the pipeline.  Another option of POTUS not addressed in the Draft SSIS is to set specific procedures for the sustained operation of the pipeline.  These two POTUS options are not addressed in the Draft SSIS.

        NEPA requires determination of environmental impact, which may be different from mere compliance with US - Department of Transportation (USDOT) regulations.  At the very least, The SSIS should include a list of lessons learned from recent dilbit spills from pipelines operating under current USDOT regulations.  Pipelines are not a “build and forget infrastructure.”

8      The route of the pipeline crosses large, high value aquifers, and the underground placement of the pipeline makes leak monitoring difficult.  Given the unstated environmental fate and transport of dilbit and the unstated environmental toxicology of dilbit, sustained, low rate releases of dilbit into these aquifers could result in catastrophic damage to these aquifers for which no response or cleanup technology is stated in the Draft SSIS. Given current technologies, response and cleanup of such an event is not possible. Given the physics and chemistry of the situation, no reasonable response and cleanup technology is likely to be developed.  This issue has been acknowledged in Nebraska where the route of the pipeline has been changed, but the topic needs to be addressed in detail where the pipeline is proposed to be buried over valuable aquifers.   For the SSIS to gloss this issue is to make a mockery of the whole NEPA concept.  A reasonable option to the POTUS would be to require the placement of the pipeline above ground and make secondary containment with leak detection a requirement of the permit. Or, POTUS could allow placement of the pipeline underground, but require secondary containment and fail safe leak detection.  This is a good example of where NEPA requirements for review of (POTUS/DOS) options are ignored in the Draft SSIS.  POTUS is not limited by what will make the most money for Transcanda and tar sands oil producers.  POTUS can do what is best for US interests.

9      The market analysis neglects refinery capacity.  While it would be possible to ramp up rail capacity to move the bitumen to some port rather rapidly, the permitting, design, and construction of additional refinery capacity is much slower.  The tar sand oil industry could transport the bitumen to the Pacific Coast, but then, where would they refine that material at a reasonable cost? The proposed pipeline is small by current standards because there is not enough excess refinery capacity in the Gulf to justify building a larger and more expensive pipeline at this time.  In addition, the Draft SSIS neglects to mention that the Chinese national oil company (Sinopec Group) is a large (49%) owner of Talisman Energy and other tar sands oil producers.  Korean and Japanese oil companies have also invested in tar sands production capacity. The Draft  SSIS market analysis does not mention that Pacific Rim countries control much of the oil going into the pipeline, increasing the likelihood of the refined oil passed through the US and being sold in Europe, so that other supplies will be available to Asia. See for example:  http://oilprice.com/Energy/Crude-Oil/Following-Keystone-Rejection-Canadas-Oil-Sands-Headed-to-China.html  However, the market analysis of the Draft SSIS relates to oil industry responses to the option selected by POTUS and not to the options available to POTUS.  Thus, the industries’ alternate transportation options belong in an appendix as background reading for DOS/POTUS staff. 

1      The Draft SSIS market analysis is more of an advocacy argument than a balanced analysis. And, in fact many of ERM’s customers have a financial interest in the Keystone pipeline, even if the exact names do not appear on contracts with ERM.  In fact, the original EIS contractor, Entrix, had an undisclosed conflict of interest resulting from a task order agreement Entrix had with BP, when BP owned substantial interests in ConocoPhillips, Talisman Energy, and other Alberta tar sands oil producers.   BP became Entrix’s largest and most profitable client during the time when the Keystone XL EIS document was being prepared. Thus, DOS does not have a history of being able to monitor its contractors on this project. There are a huge number of companies, partners, owners, and subsidiaries of companies that own interests in Alberta tar sand oil production that will benefit from Keystone XL; and ERM does business with many of these oil companies.  Oil companies have used their lobbyists to influence politicians in favor of the pipeline.  Oil companies have used public relations firms to sway the public in favor of the pipeline, in part by saying it will reduce US fuel costs.  For example, BP was saying the Keystone XL pipeline would reduce US fuel prices even as it was selling its stake in Talisman Energy (a large Alberta tar sands oil producer) to Sinopec Group  – the Chinese national oil company.    It does not appear that DOS has appreciated the potential organizational conflicts of interest, lobby efforts, and well funded public relations campaigns supported by the oil companies.  It appears that the DOS is prepared to put their institutional stamp of approval on one-sided oil company propaganda.

1     The Draft SSIS averages away the impacts of climate change.  For infrastructure basis of engineering design, climate change results in a fat tailed probability distribution of extreme events. Climate change increases the probability of extreme weather events that are greater than the structure is engineered to withstand.  Climate change has raised the average sea level only a few millimeters, but it has enabled extreme events such as Katrina, Isabel, Isaac, and Sandy.  It was not the average sea level rise that caused the damage, but the extreme events.  Likewise it is not average temperature that will damage engineered structures such as a pipeline, but extreme heat events that are outside of the basis of engineering design.   Likewise, it is not average precipitation over the next 30 years that will damage engineered structures; it is the extreme precipitation events made possible by extended climate change and the resulting changes in atmospheric circulation.  The most extreme of these events are likely to come after the corrosive and erosive properties of dilbit have acted on the pipeline for decades, and the pipeline is more fragile. The Draft SSIS is silent on these issues.   

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