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An Updated Look at What Keystone XL and Alberta Tar Sands Mean for the Climate

Posted on 8 February 2013 by dana1981

We have twice previously examined the various environmental (including climate) impacts of the proposed Keystone XL pipeline, which would transport oil from the Alberta tar sands in Canada to American refineries at the Gulf of Mexico, where it would then be distributed internationally.  Pressure has been ratcheting up for the Obama Administration to both approve and reject the pipeline. 

In support:

In opposition:

  • 18 of the nation's top climate scientists, with some impressive names (James Hansen, Michael Mann, Richard Somerville, Jason Box, Raymond Pierrehumbert, Ken Caldeira, John Abraham, Michael Oppenheimer, Mauri Pelto, Ralph Keeling, Terry Root, David Archer, Michael MacCracken, Ted Scambos, James McCarthy, George Woodwell, John Harte, and Alan Robock)

There is also a climate/anti-Keystone XL rally scheduled at the National Mall in Washington D.C. at noon on Sunday February 17th.  Given these events, it seems a fitting time to re-examine the climate impacts associated with the Keystone XL pipeline.

The calls for approval of the pipeline have generally been supported with political arguments, whereas the objections generally express concern about the pipeline's implications for climate change.  There are other environmental concerns as well, because these types of pipelines frequently leak and cause significant impacts to local environmental and human health.  However, here we will focus on the climate impacts of Keystone XL and tar sands oil in general.

What is the Potential Climate Impact of Keystone XL?

The proposed Keystone XL pipeline will be capable of transporting 830,000 barrels of tar sands oil per day.  According to an IHS CERA, Inc. report, an average standard barrel of crude oil has well-to-wheel (full lifecycle from extraction to combustion) CO2-equivalent emissions of about 487 kilograms (kg) of CO2-equivalent greenhouse gas emissions, and according to the US State Department Keystone XL Environmental Impact Statement (EIS) (Table 3.14.3-10), it's about 466 kg per barrel.

The IHS CERA report estimates tar sands oil CO2-equivalent emissions as 5–15% higher than average crude oil, and the State Department estimates them at 17% higher.  However, subsequent research suggests these values are underestimates. The US Environmental Protection Agency (EPA) evaluation of the State Department EIS suggests their higher end estimates  may be 20% too low, and a range of 8 to 37% higher well-to-wheel emissions than average crude oil appears more accurate.

So an overall estimate of around 580 kg of CO2-equivalent emissions per barrel of tar sands oil (or 0.58 metric tons per barrel) appears reasonably accurate.  Using the Keystone XL pipeline capacity of 830,000 barrels per day, this oil would account for approximately 175 million metric tons of CO2-equivalent emissions per year.  Over a 40 year timeframe, this adds up to over 7 billion metric tons of CO2-equivalent greenhouse gas emissions.

However, that's not the full story.  A new report by Oil Change International also notes that

"...between 15 and 30 percent of a barrel of bitumen forms a solid coal-like residual fuel known as petroleum coke (petcoke) ... the petcoke produced in U.S. refineries and Canadian upgraders is increasingly being blended with coal in coalfired power plants in the U.S. and abroad, effectively making coal-fired generation cheaper and dirtier."

The report estimates that this tar sands petcoke production will add over 16.6 million metric tons of CO2-equivalent greenhouse gas emissions per year, or another 664 million metric tons over a 40 year timeframe.  But the oil flowing through the pipeline won't be 100% bitumen, so overall 7 billion metric tons of CO2-equivalent from the Keystone XL pipeline over the next 40 years is a reasonable estimate.

To put that in context, according to the Potsdam Institute and Australian Climate Commission, in order to remain below the 2°C warming "danger limit", we likely have a remaining 'carbon budget' of less than 700 billion metric tons of CO2 emissions between 2010 and 2050.  So it could be argued that the Keystone XL pipeline represents a relatively small fraction, at just over 1% of our overall budget.

Additionally, as Andrew Leach notes, this 7 billion metric ton estimate is in an ideal world where the oil transported by Keystone XL would not otherwise be either shipped elsewhere or replaced with some other source.  The EPA has estimated that the "extra" emissions associated with Keystone XL as compared to a no-Keystone XL world with realistic assumptions is in the range of 1 billion metric tons of CO2 over 50 years.  If these assumptions are correct, constructing Keystone XL only represents closer to 0.2% of our carbon budget.

However, Keystone XL is really a problem from a big picture perspective.  Given our remaining budget, we can only emit around 15 to 16 billion metric tons of CO2 per year, on average between now and 2050, in order to remain within our budget.  We are currently emitting CO2 at double that rate, at over 30 billion metric tons per year and rising (Figure 1).

IEA vs. SRES 2011

Figure 1: IEA fossil fuel CO2 emissions estimates vs. IPCC SRES emissions scenarios.

We need to turn this around fast and start reducing our overall emissions, or we will blow through our budget and into the realm of very dangerous climate change.  Doing so will require leaving as much of the world's fossil fuel reserves in the ground as possible.  On the contrary, Keystone XL and the tar sands involve exploiting not only conventional fossil fuel reserves, but also unconventional sources.  It is a completely backwards approach and takes us on the wrong path.

What Do the Tar Sands Mean for Canadian Emissions?

It's also worth exploring what tar sands exploitation in general means for Canadian emissions.  A new report by the Pembina Institute notes that tar sands oil production could surpass 9.3 million barrels per day, when including approved, announced, and disclosed projects.  That would mean nearly 2 billion metric tons of CO2-equivalent emissions worth of tar sands oil production per year, or about 13% of global average annual allowable 2010–2050 global CO2 budget just from tar sands production alone.

For this reason, research by Ecofys includes the Alberta tar sands among the 14 massive 'carbon bomb' projects that if they proceed, will produce as much new CO2 emissions in 2020 as the entire United States (Figure 2).

carbon bombs

Figure 2: Eight of the 14 'carbon bomb' projects planned by 2020, from Ecofys/Greenpeace Point of No Return report

Canada is already one of the world's largest per capita CO2 emitters.  The Pembina Institute report notes that Canadian overall greenhouse gas emissions will certainly continue to grow if development of the tar sands proceeds as planned, just due to the emissions associated with the extraction of the tar sands oil (Figure 3), and the tar sands will become Canada's single largest source of emissions (Figure 4).

"Between 2010 and 2020, Canada’s greenhouse gas emissions are projected to increase by 28 Mt. In that same time period, emissions from the oilsands, including in situ, mining and upgrading, are expected to grow by 56 Mt. Under these projections, many reductions made in other economic sectors are neutralized and reversed by the growth in oilsands emissions.  In situ emissions are expected to grow from 18 Mt in 2010 to 55 Mt in 2020, a net increase of 37 Mt.  By 2020, oilsands extraction and upgrading will make up 14 per cent of Canada’s greenhouse gas emissions."

tarsands emissions projections

Figure 3: Actual and forecast emissions growth from oilsands extraction and upgrading in Canada, from the Pembina Institute report.

fig 4

Figure 4: Oilsands greenhouse gas emissions (past and forecast) in Canada under existing policies compared to the other major economic sub-sectors, from the Pembina Institute report.

The Pembina report thus advises against further Canadian tar sands development and American Keystone XL construction, without at least figuring out how these projects can work within an overall emissions reduction framework.

"In the absence of a credible plan for responsible development of the oilsands, including mitigating GHG emissions growth to a level that would allow Canada to meet its international climate commitments, the United States should not go ahead with the proposed Keystone XL pipeline. It would send a clear signal to oilsands producers, the Canadian government and financial markets that the current high carbon content of oilsands has become a liability for future oilsands growth and the long-term competitiveness of the U.S. economy."

The Costs of Keystone Carbon

We can also examine the tar sands from a purely economic perspective via the social cost of carbon (how much economic damage our emissions cause via climate change, or how much it will cost us to adapt to climate change).  Various US government agencies including the EPA have a central estimate of the social cost of carbon at $21 per metric ton, although Johnson and Hope (2012) argues that it should be closer to $100 per metric ton.

Thus the net cost of CO2 emissions from Keystone XL is probably in the range of $3.6 billion to $17.5 billion per year.  If we just look at the added cost as compared to the realistic non-Keystone XL world as estimated by the EPA (approximately 1 billion metric tons of CO2 over 50 years), the cost is $420 million to $2 billion per year in climate damage from the associated carbon emissions.  Of course, those external costs are spread across the global population, but they are nevertheless an immense cost which is completely ignored by those who argue for the economic importance of exploiting the tar sands. 

From a purely economic global perspective, we would be better off leaving the tar sands in the ground.

Keystone XL is a Litmus Test

Ultimately, as a Reuters article noted,

"The pipeline is also a litmus test for what you think is the most important problem in the early 21st century."

If Keystone XL is approved, it is an indicator that the United States is still not taking climate change remotely as seriously as it needs to.  It would be a step along the wrong path, exploiting as much of the world's conventional and unconventional fossil fuel reserves as possible rather than looking for ways to leave as much as possible in the ground.

The tar sands present an even bigger test of Canada.  If they continue with their efforts to maximize the tar sands extraction, they will cripple any efforts to reduce their own country's greenhouse gas emissions, and also become an enabler for the rest of the world to continue increasing overall emissions.

Continuing to develop Keystone XL and the tar sands in general will keep us on a path towards a future with very dangerous and potentially catastrophic climate change.  It's time for the USA to take a climate leadership role and signal that the world needs to take a different path by rejecting the Keystone XL pipeline project.

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Comments

Comments 1 to 21:

  1. Again, you are blaming Alberta. No need to give up your gas guzzling SUV as long as you fly the gas in from a country from which flaring accounts for 99% of the well to wheel emissions. People do need to remember that industry only makes products which consumers buy. It is also true that in the case of fuel for cars, trucks and SUV’s, most of the emissions from “well to wheel” come from the tailpipe. Even if oil from the tar sands could be replaced with a more ideal source of oil, which could be difficult because OPEC countries have a horrible environmental record, the best emission reductions which could be accomplished without a reduction of consumption of hydrocarbon fuels would be rather weak intensity targets. Intensity targets are the controversial class of greenhouse gas reduction targets which could result in increased total greenhouse gas emissions if the growth of consumption increases at a sufficient rate.

    In order to make real reductions in environmental impact, consumers must take responsibility for their choices. These choices must be informed choices. Even organic produce and products which are recommended by such environmental groups as Greenpeace may not be the most sound products. Use of energy must be minimized by using such products as compact fluorescent lights and well insulated homes.

    Whether the Keystone Pipeline is approved or not will not change whether or not Earth warms. If people stopped using gas to power their cars, there would be no market for the oil and the pipeline would shut down and the investors would lose their money. But if we continue to use the oil without the pipeline, we will just buy the oil from other sources. Or perhaps there will be a gas shortage, which will result in a huge backlash. Denialists already want to jail climatologists, and they have yet to make any kind of sacrifice. If the fight agianst global warming leads to a shortage, it will be unsafe to go on a walk unless you wear a T-shirt that says, "Global warming is a hoax."

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  2. The only reason for building the pipeline is that somebody wants to make a profit. Tar sands wreak a lot of environmental damage, and are a very inefficient source of energy. We need energy even though we don’t like what it does to the environment, but tapping shale gas is infinitely preferable to exploiting tar sands.

     So why not load these plans with the real costs of the project and hence make the project so expensive so it is uneconomical. Without profit greed will go look somewhere else. With less oil available the price will go up. Our real problem is to use our energy more efficiently – and the only realistic way to do that is to make it more expensive. Same goes for the SUVs - put a heavy tax on fuel to reflect the real cost of its use – let the price rise – and then, and only then will mr Joe Public take fuel economy seriously. Europe has done it – next step US and Canada.

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  3. Bubble burster here, your logic is slightly off.  Instead of calculating the total quantity of CO2 equivalents generated by this, only the difference between this and "normal" oil should be used, as this oil would replace other oil used, not be in addition to.

     

    Since the difference is 580 - 487 = 100 (round off for ease), the final number is about 17% of your original number - still high, but significantly less.

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  4. As a general rule I would ask that people read the post carefully before criticizing it.

    Kevin - please read the "What is the Potential Climate Impact of Keystone XL?" section more carefully.

    jyushchyshyn - nowhere in this post did I 'blame Alberta'.  I merely talked about the Keystone impact on global and Canadian emissions.

    Arguments that "we'll just keep burning oil anyway" miss the point.  We have a choice whether or not to continue burning all of our fossil fuel reserves.  We need to choose not to.  Exploiting the unconventional tar sands oil is the wrong choice.  There is no reason to do it, and doing so has very negative consequences both for Canada and the world in general.  Exploiting the tar sands just brings some revenue to Canada at the expense of the global economy and the Canadian environment (and potentially the American environment, if the pipeline is built and inevitably leaks).

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  5. "There is no reason to do it"

    There are many very good reasons to exploit tar sands.  The work is bringing very good jobs to some perfectly nice human beings, and it provides energy at a cheaper short-term cost for everyone.  It brings in large revenues to the relevant branches of government, who can then run social programs with only light tax burdens on the general population.  And, of course, it brings huge profits to the companies involved.

    Long term they are a disaster, of course.

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  6. The Forward on Climate rally scheduled for Sunday, Feb 17 in Washington, DC is being sponsored by more than 100 environmental and progressive organizations in the US and Canada. To access a complete list of the sponsoring organizations, click here.

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  7. Kevin - please read the "What is the Potential Climate Impact of Keystone XL?" section more carefully.

    My statement stands.  You calculated the TOTAL potential impact, and I am stating that that is illogical.  It is the "above and beyond" normal oil that is important to the issue of whether or not to proceed with the XL.  Your logic would argue against ANY oil pipeline, not tar sands pipeline.

     

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  8. Kevin:

    Your criticism of Dana's logic & calculations appears to rest on your assumption that:

    Instead of calculating the total quantity of CO2 equivalents generated by this [the ongoing extraction of fossil fuels from Alberta tar sands], only the difference between this and "normal" oil should be used, as this oil would replace other oil used, not be in addition to. [Emphasis mine.]

    What is your justification for this assumption?

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  9. Kevin @7

    Dana also mentioned the incremental effect of burning bitument versus regular crude oil in this paragraph.

    Additionally, as Andrew Leach notes, this 7 billion metric ton estimate is in an ideal world where the oil transported by Keystone XL would not otherwise be either shipped elsewhere or replaced with some other source.  The EPA has estimated that the "extra" emissions associated with Keystone XL as compared to a no-Keystone XL world with realistic assumptions is in the range of 1 billion metric tons of CO2 over 50 years.  If these assumptions are correct, constructing Keystone XL only represents closer to 0.2% of our carbon budget.

    Which is what I guess you were after. 


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  10. She is objecting to the Tar Sands XL Pipeline.  She goes on to show how Tar Sands oil is worse (on a CO2 basis) than normal oil.  So far so good.  As I stated above, if she was objecting to any oil pipeline, her methodology is fine.  She is however, trying to show why the Tar Sands Oil pipeline is objectionable, specifically, because it is Tar Sands Oil.  That is why only the difference matters.  Again, as stated earlier, the oil from this pipeline will replace oil from some other source.  If this pipeline were to be constructed so as to support some new, dedicated new oil consumption enterprise, her logic again would be fine.  This oil will replace some other oil that is more expensive.  So if she wants to include the total, then she must subtract the oil CO2 equivalents that are replaced, which is essentially what I did, only earlier.

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  11. Kevin:  ...only the difference between this and "normal" oil should be used, as this oil would replace other oil used, not be in addition to.

    "This" oil is relatively expensive to produce compared to preferred reservoirs, "preferred" including those with fairly horrendous geopolitical or technical challenges. If for instance the Arctic were to produce a true Middle East or Gulf of Mexico elephant play, the tar sands bubble would go "pop" instantaneously, only to be reinflated when the hypothetical Arctic bounty was exhausted. Willingness to capitalize the tar sand project on the grand scale of Keystone is simply an indication of the confidence fossil fuel firms have in our long term inability to pick and choose between reservoirs. 

    The very existence of Keystone says your argument is plainly wrong. 

    Rather than being a weirdly unusual and impossible economic choice, the tar sands project confirms our inclination (or rather desperate need because, let's face it,  we're addicted)  to burn -all- available hydrocarbons, not substitute something more expensive for what can be obtained more cheaply elsewhere. 

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  12. Excellent summary Dana, thanks very much. It always takes me quite some time to go through all your references. I appreciate the considerable amount of time and effort it takes to synthesize all the reports you go through.

    Just a quick question. Just a few weeks ago I read the Pierrehumbert article on realclimate that you linked to with the Andrew Leach reference. Aside from the fact that he measures tonnes of C and you do tonnes of CO2 (a factor of 3.67), your numbers are 2.3 higher than his. He's got 500,000 barrels/day to your 830,000 and 0.42 tonnes CO2/barrel to your 0.58. What accounts for the difference? Thanks.

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  13. Kevin @9, see Andy @8.  Gold star to Andy.

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  14. Excellent summary Dana, thanks very much. It always takes me quite some time to go through all your references. I appreciate the considerable amount of time and effort it takes to synthesize all the reports you go through.

    Just a quick question. Just a few weeks ago I read the Pierrehumbert article on realclimate that you linked to with the Andrew Leach reference. Aside from the fact that he measures tonnes of C and you do tonnes of CO2 (a factor of 3.67), your numbers are 2.3 higher than his. He's got 500,000 barrels/day to your 830,000 and 0.42 tonnes CO2/barrel to your 0.58. What accounts for the difference? Thanks.

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  15. JoeT - I'm not sure where Pierrehumbert got his figure from, but I saw the XL 830,000 barrel per day maximum capacity in several places, including the State Dept EIS.  The existing Keystone pipeline has around a 500,000 gallon per day capacity, so perhaps Pierrehumbert accidentally cited that number instead of the value for XL.

    Also Kevin, I'm a he, not a she.

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  16. Kevin@10

    First, did you read the paragraph that I highlighted? It deals with the issues you raise.

    Second, I can't speak for Dana, but I am against any new hydrocarbon infrastructure that does not pay for the negative externalities that it causes, including new oil and gas pipelines. Every new capital investment in an energy project tends to lock in that infrastrucure for the project lifecycle, since the capital is a sunk cost. We can't afford to keep building the infrastructure that will increase carbon emissions over decades. This argument justifies Dana's calculations of the total, well-to-wheels impact of Keystone XL.

    See this post and the figure below

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  17. If we are to have a chance of saving any sort of world that we can live in, then we need to stop all these new projects. If we fail to stop the XL pipeline shipping this dirtiest of oils to the world then we are in very deep trouble.

    To those campaining and demonstrating I salute you.

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  18. It's time for the USA to take a climate leadership role

    What a difference it would make, if only they would exercise the global leadership they are so fond of talking about.

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  19. Dana, thanks for this article. I don't know what are the total long term carbon and environmental costs to starting new infrastructure that Andy Skuce (#16) spoke about for the case of tar sand, but generally your data shows that XL will have a very small negative carbon impact since what counts otherwise are marginal costs (1/700 of total consumption based on your observation).

    It seems that whether XL gets added or not is not that important from the global warming perspective. More important is what jyushchyshyn (#1) mentioned about consumers changing habits, but this is only realistic I think if government takes steps like raising taxes, eg, like MartinG (#2) mentioned, in order to cover total costs to society from fuel processing.

    See, just like Shell drilling up north, if you give a limited trial offer to industry, give them a bone and an opportunity to prove themselves, and then require that externalities be covered in the costs/tax (and threaten legal action if they screw up), then you can keep that new exploration limited and force safety and efficiency innovation on the part of industry. If industry sees a chance, they have incentive to try and innovate or abandon the effort if it proves too costly. And if pipelines are the most efficient transports, forcing other ways may create more harm than good.

    A real victory might be to accept XL conditionally on taxes being raised to help fight global warming costs and other environmental costs. This can be asked of Congress. A precedent can be established to make it easier to later address real costs to all the areas mentioned by Andy Skuce. Allow the pipeline if its full costs are included today -- a future generation carbon defrayal tax -- think of the (great great grand) children!. With higher costs, consumers are more likely to change habits.

    We have to keep perspective on XL or we lose people in the middle who can rationalize. XL doesn't seem to add that much harm from a global warming perspective. It can serve as an opportunity to add taxes or gain something else that can have a real positive impact that far exceeds the tiny marginal impact of XL.

    And if the XL costs are high in other environmental areas (something being addressed), then that should be the argument.

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  20. I think the problem with XL is the implicit commitment it represents, that we will indeed burn whatever we can extract.  The tar sands are an expensive, dirty source of oil, and even burning all the conventional oil we can extract has devastating implications for our climate and oceans.  Since XL's construction will support continued expansion (and increased profitiability) for the tar sands, it's a step down the wrong path.  Even if all it does is replace other sources of oil in the short run, in the long run it implies burning more fossil fuels rather than beginning the transition to much greater efficiency and a low-carbon energy economy.  

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  21. The oil from the tar sands, like any oil found anywhere, will not "replace" any other oil. It will be additive. It's a circular dynamic. The supply/demand curve determines the price, and any oil that can come on at that price will come on. As long as there's expansion of fossil-fueled infrastructure in the world, demand will be there.

    This is exactly what's happening with natural gas. Notionally, it should replace coal for electric generation in the US. And it is. But the displaced coal is being exported to China.

    We can't solve the carbon accumulation problem by adding more carbon. Once we enter the detailed discussion of the relative merits of carbon-emitting projects, we are lost. We have implicitly accepted the carbon emissions. We're at the point of choosing the moment to start reversing this modality.


    I agree the deniers are a danger. They will be incensed. Violence at some point is not hard to imagine. But violence is also the endpoint of continuing down our current path, as the atmosphere becomes more unstable and agriculture fails.

    Obama would be wise to avoid mentioning KXL until he has an entire strategy: no KXL, but yes to this (e.g., a Manhattan Project for renewables deployment). But that needs to happen very soon.

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