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Study Shows Keystone XL Crucial to Tarsands Growth

A new study from Berkeley Professor Maximilian Auffhammer shows that Keystone XL is, in fact, necessary for the oil industry to meet its tar sands expansion goals, and without this particular pipeline, a significant amount of Canadian tar sands will stay in the ground.

Study Shows Keystone XL is Crucial to Tar Sands Growth

Proponents of the Keystone XL tar sands pipeline have long argued that the project would not significantly exacerbate climate change because Canadian tar sands will find its way to market with or without this pipeline.

This assumption was echoed in the State Department’s oil-soaked environmental impact statement, and has been repeated often by Canadian government officials like Transport Minister Lisa Raitt, whorecently argued that tar sands expansion is inevitable and that the only question is how safely and efficiently it is moved. But a new study from Berkeley Professor Maximilian Auffhammer shows that Keystone XL is, in fact, necessary for the oil industry to meet its tar sands expansion goals, and without this particular pipeline, a significant amount of Canadian tar sands will stay in the ground.

Based on an analysis of current rail capacity and other existing and proposed pipelines, Auffhammer found that, without Keystone XL, roughlyone billion barrels of tar sands crude would stay in the ground. By any standard, this represents a significant contribution to carbon pollution, leaving little question that the pipeline fails President Obama’s climate test.

From Business News Network:

“There is simply not sufficient transport capacity to realize the supply projections by Canadian Petroleum Producers out to 2030 even if all other projects are built and rail capacity grows most rapidly,” wrote Auffhammer, whose field of expertise is described in his bio as being “environmental and energy economics.”

Auffhammer looks at all the oil sands pipelines that are being planned over the next few years and calculates supply constraints that could exist should only some, or none of them, get build. If all are allowed to go ahead – including Keystone XL and Energy East from TransCanada, two Alberta Clipper expansions and Northern Gateway from Enbridge and the Trans Mountain expansion from Kinder Morgan – then Auffhammer says there would be “plenty of spare capacity until 2013 and would minimize the need for [crude-by-rail] transport” until 2030 and beyond.

“Scenario 2, which is a world sans Keystone XL, has plenty of capacity until 2024, which is when both high and low cost transport modes are filled to capacity,” wrote Auffhammer.

By that point, his analysis concludes roughly one billion barrels would have to “stay in the ground” as the industry would lack any means to bring them to market, even with crude-by-rail shipments blowing past the 500,000 bpd mark as analysts predict it will by next year. Of course, that conclusion hinges on a critical assumption that no additional projects are proposed, aside from the ones currently on the table, between now and 2024 (a decade is a pretty long time folks).

“If none of the pipelines get built within and out of Canada and one has to reply on this rail scenario alone, capacity would run out this year and roughly 10 billion barrels stay in the ground,” Auffhammer wrote.

“What is noteworthy about the last scenario, is that if no pipelines get built, rail does not provide sufficient capacity to meet projected takeaway demand in the short run. Not building Keystone XL would make the rail capacity constraint binding and therefore lead to slower extraction even in the short run.”

For more information, contact:
David Turnbull, david@priceofoil.org, (202) 316-3499
Jane Kleeb, jane@boldnebraska.org, (402) 705-3622
Peter Galvin, pgalvin@biologicaldiversity.org, (707) 986-2600

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