The State Department just released a dry, complex document analyzing the environmental effects of a new oil pipeline. But really what it did is finalize a showdown over one of the most important fights in American politics. Here's everything you need to know about it. If you want the most immediate news, skip down to section three.
1. The pipeline would shuttle oil from Canada to Nebraska.
The Keystone XL pipeline is part of a network that the Canadian company TransCanada wants to use to shuttle oil from Alberta, Canada, to the Gulf Coast. That network, pictured at right, is already in place, but the Keystone XL section — the dashed blue line — would allow for more of the product to be moved from Alberta to Steele City, Nebraska, more quickly. Earlier this month, the stretch extending down to Texas began operation, after months of conflict.
A key factor at play is that this isn't conventional oil. It's oil that's extracted from a sort of sand-clay-oil mix known as oil or tar sands. To be transported, it's made into a slurry called diluted bitumen, or dilbit.
2. Approval of the pipeline is up to President Obama.
Since the Keystone XL pipeline would cross the border between Canada and the United States, it needs to be approved by the State Department. That has given President Obama the ability to veto the pipeline outright if he wants to do so. And it's given his Republican opponents a potent shorthand for suggesting Obama has to choose between the environment and jobs.
In 2012, as the presidential campaign approached, Obama rejected the proposal, in part because Republicans attempted to force the issue. But it was also largely because the proposed route from TransCanada brought the pipeline through an area of Nebraska known as the Sand Hills, an area that quickly absorbs water that then replenishes a massive natural freshwater aquifer deep underground. A pipeline spill above the Sand Hills could have been an unparalleled disaster, and even Nebraska's Republican governor objected to the pipeline as a result.
So TransCanada moved the proposed route and asked for new environmental consideration. Nebraska signed off on the new route, and the State Department last summer released an initial environmental assessment.
Today, that was finalized.
3. Per the State Department report: Keystone wouldn't change environmental math, though tar sands oil is more carbon intensive.
The report released Friday is the State Department's final analysis. In short, the report doesn't raise any significant environmental objections to the proposed pipeline, similar to the initial report last year. "Approval or denial of any one crude oil transport project, including the proposed Project, remains unlikely to significantly impact the rate of extraction in the oil sands, or the continued demand for heavy crude oil at refineries in the United States," it reads in part.
It does however note that tar sands crudes "are generally more [greenhouse gas] intensive than other heavy crudes they would replace or displace in U.S. refineries, and emit an estimated 17 percent more GHGs on a lifecycle basis than the average barrel of crude oil refined in the United States in 2005." This jibes with an independent study from Oil Change International that indicated that "181 million metric tons of greenhouse gases entering the atmosphere yearly" if Keystone XL went into operation, from the extraction process through to the end of the line.
And that makes things a little trickier for Obama.
4. The report puts Obama in a tricky political position.
On a scorching day last June, Obama gave a strong speech on climate change in which he called for reductions in greenhouse gas emissions, the most abundant of which is carbon dioxide. He also — unexpectedly — outlined the environmental criteria that Keystone XL would need to meet in order to be approved. From his speech:
Allowing the Keystone pipeline to be built requires a finding that doing so would be in our nation’s interest. And our national interest will be served only if this project does not significantly exacerbate the problem of carbon pollution. The net effects of the pipeline’s impact on our climate will be absolutely critical to determining whether this project is allowed to go forward. It’s relevant.
There are two criteria there, highlighted: The pipeline can't "significantly exacerbate the problem of carbon pollution," and its "net effects" on the climate are critical.
Does the State Department report give Obama the flexibility to approve it? Does it necessitate he kill it? A source told The New Yorker's Ryan Lizza that the State Department left precisely that room for the president, intentionally or not.
5. The economic viability of tar sands development may rely on building Keystone.
One of the more interesting aspects of the debate is that Keystone XL is seen by some as critical to any significant development of the Albertan tar sands. In 2012, The Wall Street Journal explained that the inability of Canadian companies to get the dilbit out to customers was causing prices to sink. The lack of pipeline capacity out of Alberta was key: "Until those new outlets get built, Canadian crude prices will 'come under extreme downward pressure' next year and in 2014," the Journal reported. It cited a market report: "This could cause a slowdown in oil sands development."
The State Department report suggests that this isn't the case — in part because it assumes that the dilbit will com to market another way: other pipelines, trains, or tankers. Recent train accidents could make such alternatives less appealing.
6. The Environmental Protection Agency and environmentalists see the pipeline as much riskier.
That's exactly what environmentalists hope. Spurred by the declaration from Dr. James Hansen, then of NASA, that the Keystone XL pipeline was "game over" for the planet since it unlocked access to a huge new deposit of what is essentially unreleased carbon dioxide. 350.org's Bill McKibben did the math on what would happen if that carbon dioxide was added to the atmosphere: It would move us past the level of atmospheric carbon dioxide that could keep us within what scientists estimate would be a "safe" level of warming.
McKibben's 350.org and other organizations launched a series of events in 2011 aimed at swaying Obama against approval. Earlier this month, The Times declared that the protests had "lifted the environmental movement."
The EPA offered a boost when it last April critiqued the State Department's assessments of the pipeline's effects, indicating that State downplayed the carbon creation and the risk of spills, among other things.
7. There's controversy over the State Department report.
Documents obtained by the Sierra Club under the Freedom of Information Act and reported by BuzzFeed's Evan McMorris-Santoro show that the firm chosen to conduct the environmental review for the State Department had links to TransCanada that it never revealed. This was the second time that a company tasked with reviewing the pipeline had been found to have links to TransCanada. Legal experts have pointed out that such analysis requires a level of expertise and investment that makes it less feasible for the government to conduct it.
The State Department's independent Inspector General has been investigating the relationship between ERM, the firm that did the review, and TransCanada, but that it would not release those findings on Friday.
8. There's also controversy over the job creation benefits.
Republicans and business groups have long argued that the Keystone XL pipeline should be approved because it would create thousands or tens of thousands of jobs. In its initial report last year, the State Department figured that approval would create 42,000 jobs — almost entirely short-term construction gigs. Over the long-term, the pipeline would employ 35 people in America, along with those working in Alberta at the extraction site. It would also include 15 temporary contractors once the pipeline is in operation.
The company is vague on its estimates.
9. Obama could announce his decision at any point.
TransCanada and the Canadian government have gotten impatient with the decision-making process, even as they reiterate their confidence that it will be approved. ("I remain 100 percent confident that this project makes sense for energy security and all the jobs and economic benefits come with it," TransCanada's CEO said last month.)
The only thing Obama was waiting for was the report released today. Which means that there are two considerations left. The first is political: does he hand Republicans a mid-term election talking point on how Obama picked the environment over (35) jobs, or does he try and use the decision to energize environmentalists before November?
The second consideration is the more important one. Is this actually for the greater benefit of the country? Obama will, according to State, look at "energy security; environmental, cultural, and economic impacts; foreign policy; and compliance with relevant federal regulations and issues." Whether or not, at the end, Keystone XL qualifies under enough of those stipulations — including the lines drawn last June — ultimately comes down only to Barack Obama.