Applying Life Cycle Analysis to the Keystone Problem

Environmentalists have been up in arms about the Keystone pipeline over the last few months. As a result, the Obama Administration first delayed the decision, and then rendered a decision to NOT approve the pipeline. The greens crowed in delight – this would show those Canadians that the US will not buy their dirty, filthy oil! We are determined to go with wind energy, and natural gas, and have no need for oil, which emits hydrocarbons!  Building the pipeline only help to fuel the production climate changing gases; its environmental review (although approved by the Governor of Nebraska) was deemed to be catering to Big Oil; and the mining in the Oil Sands in Northern Alberta was destroying precious ecosystems and boreal forest.

A recent article in the New York Times provides a different perspective on this problem.  They point out that there is already 2.5M miles of pipeline in the United States – this 1000 mile leg isn’t going to suddenly break the camel’s back!  Further, the author points out that environmentalists are forgetting a simple reality associated with energy:  Large-scale energy is typically produced in remote places and inevitably needs to be transported to the populated areas where it is used. That is a fact whether the energy comes in the form of “dirty” traditional fuels like coal or oil, or in the form of cleanernatural gas. It is true even if it comes in the guise of “green” electricity, generated by the sun or wind.Further, a representative

Jackie Forrest, an analyst with IHS Cera points that that if there was no reasonable transport plan, she said that a valuable commodity like oil would somehow flow to where it was needed (and could be sold) — perhaps by even less palatable routes. She pointed out that without Keystone XL more oil would be imported from the Middle East, which would travel farther, involve high shipping costs and produce double the transport-related carbon emissions as ships crossed the ocean.

Likewise, in the Midwest, where new oil discoveries in North Dakota’s Bakken field have exceeded pipeline capacity, producers this year are sending large quantities of oil to the Gulf of Mexico by rail for refining. (Keystone XL, which was to have run through the region, was expected to alleviate the bottleneck.) “That increases costs, increases greenhouse gas emissions and also has the potential for crashes and spills,” Ms. Forrest said.

The fact remains that power sources need to be transported – whether it’s through pipelines, barges, powerlines, trucks, or ships.  If one were to apply a Life Cycle Analysis on all of these options, measuring the carbon footprint and impact on the environment, the Keystone pipeline wins hands down.

That is a fact-based supply chain argument – not an emotional or political one.