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

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:

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.

Posted by dana1981 on Friday, 8 February, 2013

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