Arguments
US State Department underestimates carbon pollution from Keystone XL
Posted on 28 August 2014 by John Abraham
This is like the movie Groundhog Day. I seem forever forced to correct the State Department’s errant analysis of Alberta tar sands emissions. Now, however, other people are agreeing with me. A recent paper published in Nature Climate Change reviewed the State Department’s accounting and found it deeply flawed.
The authors, Peter Erickson and Michael Lazarus of the Stockholm Institute included the impacts of Keystone on the global oil markets. This inclusion tripled the climate change impact of the Keystone pipeline compared to the State Department’s analysis. Let’s get into the study to see the reason for the change and also to understand why even this new analysis is flawed.
First, the State Department assesses the impact of tar sands by assuming it will merely displace, barrel for barrel, some other oil extracted somewhere else on the planet. Therefore, the State Department analysis only counts the incremental emissions for tar sands. Tar sands are approximately 17% worse in terms of emissions than other fuels (it depends on which fuel is the reference); the State Department only counts these extra emissions.
What the new study does is ask, how will the Keystone pipeline increase oil extraction globally? For instance, if oil prices decrease because of Keystone, then more oil will be extracted (up to 0.6 barrels more per barrel of tar sands). They reason, correctly, that an honest account must include the increased extraction.
In fact, this new accounting shows that the actual emissions are up to four times those proposed by the government analysis. To put some real numbers in, the authors report that Keystone would lead to up to 110 million tons of carbon dioxide equivalent per year.
The paper received a lot of well-deserved attention in the media both online at Think Progress and at Climate Central, by first-rate writer Seth Borenstein, and others. Of course, there was the quick (and ironic) complaint from Andrew Leach who is the Enbridge Professor of Energy Policy at the University of Alberta. The first irony is that Enbridge is a Canadian company that deals with tar sands and is fighting to expand its own pipelines. The second irony is that Andrew Leach argues we should consider the economic benefits of increased oil consumption at lower prices but is silent in his critique about the economic consequences of climate change.
But it is clear that even this new analysis is too low. Why do economists take an incremental approach to emissions? The true way to count the amount of carbon that the Keystone pipeline is responsible for is to count the amount of carbon that would flow through the pipeline when it is built. Another way of thinking about this is that we have three possible alternatives.
John Abraham lists three possible alternatives regarding Keystone XL:
There's another very real alternative that he fails to consider.
"Since 2012, the billionaire Irving family has been advocating a proposal called Energy East. The 2,858-mile (4,600-km) pipeline would link trillions of dollars worth of oil in land-locked fields in the western province of Alberta to an Atlantic port in the Irvings’ eastern home province of New Brunswick, north of Maine, creating a gateway to new foreign markets for Canadian oil. The $12 billion line, ...would pump 1.1 million barrels per day..."
Source: http://business.financialpost.com/2014/03/27/keystone-oil-pipeline-energy-east-irving/?__lsa=dd12-ecbf
So, by blocking a 830,000 bpd pipeline that would transport tar sands bitumen to the United States, you're increasing the likelihood of building a 1,100,000 bpd pipeline, to ship the very same oil to countries like India and China that have far worse environmental and pollution regulations.
Well done.
And for what? Because you'd like to avert in imperceptible amount of warming (less that 0.007 C) over a century?
[PS] Fixed link. (And what about not build Keystone and get energy from non-carbon sources instead?)
RussR @1, ah yes! The "do evil now lest somebody else do it before me" school of moral philosophy. You must be so proud.
On a more pragmatic level, that Keystone XL is the preferred option to export the oil from tarsands shows that profitability will be less, or prices higher with the alternative. Therefore not building Keystone will result in the extraction of less oil from the tarsands in the long run regardless of any other pipeline built.
It is odd that many of the proponents of Keystone XL argue that we absolutely must do it because it will make so little difference to outcomes.
A recent paper may provide a new way of looking at big energy infrastructure projects.
Quoted by Revkin in the NYT
Open-access paper by Davis and Socolow here
i will be looking at the Erickson and Lazarus paper in more detail in an article here next week. I also take a different route to get to the same general answer as John Abraham's.
(And what about not build Keystone and get energy from non-carbon sources instead?).... Could you expend that comment? How can that be done?
wilbert - Perhaps by implementing carbon taxes to make producers of energy pay the actual (societal) costs of fossil fuels and emissions rather than just profiting on the low price of their feedstocks? If that was done consistently renewable power becomes almost a no-brainer in terms of utility profitability.
" I also take a different route to get to the same general answer as John Abraham's."
I took the same route as John Abraham in assessing the maximum amount of CO2e emissions that Keystone XL could possibly generate and I came up with 169 million tonnes of CO2e per year, virtually the same value as he arrived at.
But unlike Abraham (or anyone else here), I took the logical next step of estimating the impact of Keystone XL's potential emissions on the planet's temperature, and I come up with a result that is remarkable in its insignificance... less than 1/100th of a degree Celsius per century. Absolutely trivial.
Feel free to play with your own assumptions. Calculations and sources here: https://dl.dropboxusercontent.com/u/78507292/Keystone%20XL.xlsx
All I ask is that next time you're arguing to block the construction of this pipeline, please be upfront about the actual impact it will have on climate.
Too small to measure.
Here's an argument corollary to Russ' posted above.
I made the calculations to estimate how many calories I would burn if I were to walk to the store, half mile away. It would require me to walk a total of 1600 steps, based on calculations that agree with other's assessments that will only burn 113 calories.
That's just too little to have an impact on my growing waistline, thus I shouldn't even try.
The point is, it's 169 million tons of CO2e that shouldn't be going into the atmosphere in the first place. You can do the same calculation for every single thing that needs to be done to lose weight or to end emissions of CO2. The only way you make progress is to get off your a— and do all of them.
You don't wait for the next thing that will maybe be a better solution. As coaches say: "Just do it."
Russ, I have estimated the effect of the oilsands on the climate in this post based on the paper by Swart and Weaver. Please let me know if you have a problem with it.
You say that not allowing KXL would produce a climate effect that is"too small to measure". Could you a) Point us to a decision that would produce a climate effect big enough to measure and; b) let us know if you would be in favour of it.
My guess is that the only policy decision that would produce a big effect is if one of the the big emitting countries introduced a hefty carbon tax. I would be heartily in favour of this, but my recollection is that you are skeptical of the efficacy of carbon taxes.
Andy,
At least you admit that the entire oil sands' impact would be "barely visible", and even that's over the many centuries it would take to extract the entire resource. The Keystone XL pipeline, over its entire useful lifetime, could carry only a fraction of the oil sands. So, a fraction of barely visible is indeed... to small to measure. So it sounds like we're in agreement.
Here's one that I would be strongly in favour of: Stop ALL government subsidies. All of them. Every single one. When people pay the full costs of their consumption, they'll consume less.
As for carbon taxes, when you tell me how you plan to solve for carbon leakage to jurisdictions that aren't going to impose such taxes, maybe I'll agree with you. Alternately, tell me how you intend to get every jurisdiction to agree to a uniform carbon tax.
With that issue solved, I'd happily support a carbon tax (really any consumption tax) in place of an income tax.
Russ said, "Here's one that I would be strongly in favour of: Stop ALL government subsidies. "
That's a very nice sentiment, but you know as well as the rest of us, that's probably the least likely approach be implemented. Tell us which politician is going to stand up to say, "My constituents want no more government subsidies for any projects!" Yeah... right.
Let's talk about solutions that actually are viable, like a revenue neutral carbon tax. Tax and dividend. This very likely to be the one and only politically viable solution. Still not easy, but one that is genuinely viable.
@Russ R: Do you have any coincern about the ecological damage being done by the mining and processing of the bitumen in the Alberta Tar Sands?
Russ R says: "Stop ALL government subsidies. All of them. Every single one. When people pay the full costs of their consumption, they'll consume less."
This is obviously nonsense. Since the resources of the goverment comes from the people, the people do pay for all of their consumption, one way or another. It works more this way: people pay taxes, some of that money is given to private companies producing something that these comanies can then sell cheaper than if they weren't receiving government money, making them viable or competitive enough to exist.
My experience is that, regardless of political belonging or ideological leaning, the ones who run the companies benefiting from subsidies are always in favor of these subsidies and never believe that "smaller government" should imply less subsidies for them.
I note this about the tar sands: we are trying there to squeeze out every little last drop by any mean imaginable, including the total destruction of surface landscape in the case of the tar sands. That's called desperation. Anybody with a clear mind can see that it is already past time to move away from a no longer viable solution when desperation sets in. Of course, some will want a chunk of whatever wealth can be derived from desperate measures. Others will advocate for it out of obscure ideoligical reasons. It doesn't make it right.
RussR @9:
OK, let's start running through the subsidies:
1) Restrained government borrowing to keep low interest rates is a subsidy of large borrowers (corporations primarily).
2) "Limited Liability" is a subsidy of investors at the expense (primarilly) of small business, subcontractors and employees.
3) The low inflation economic target (as opposed to targeting neutral inflation over the business cycle, including periods of deflation) is a subsidy, again primarilly of investors at the expense of wage earners, retirees and people who save by deposits in banks or matresses.
4) Corporations are a subsidy for investors at the expense of all other sectors of the ecnomy by allowing investors to bargain as a monolithic block, thus greatly enhancing their bargaining position.
5) The requirement to prove harm to obtain compensation from anybody or corporation who dumps substances into public space (including the atmosphere) is a subsidy for polluters.
So, Russ, have you signed up to get rid of these subsidies? Made your local member of congress aware that you won't support them unless they eliminate corporations and limited liability from the statute books? Or is this talk of opposing "all subsidies" just more hypocritical libertarian claptrap that really just comes down to opposing only those subsidies from which they are not major beneficiaries?
I rather think Russ R is referring to subsidies as identified by IEA, and frankly I agree. I think you also need to tax the external cost of CO2 damage with pigovian tax on carbon. You dont need to make other jurisdictions follow suit - you just impose carbon tax at the border unless the importer can show cast-iron guarantees that the good is carbon-free or carbon tax paid at same level as domestic. That way, large consumer economies like the US become a force for change in countries that export to them.
It doesnt need to be perfect to be effective.
KR@ My question was more about ,what will these green eng built with?
Russ,
I certainly agree that there should be an end to all fossil fuel subsidies. However, most of the direct subsidies occur outside of developing nations and are focussed on petroleum products and gas. All theses images are from Brad Plummer.
None of this is within the political control of our governments and is well beyond the influence of climate activists. People often scold anti-pipeline activists for a lack of attention to coal. Coal is the big beast of climate change, it is true, but removing direct fossil-fuel subsidies would do little to affect coal consumption, because the subsidies are so small.
Once we start to look at the full subsidy, by including a $25 per tonne of CO2e charge for climate damage, then we start to see much bigger numbers and much bigger slices attributable to rich countries (blue) and bigger amounts aimed at coal.
Applying this tax and getting rid of the effective subsidy is within the theoretical power of our governments and would make a big difference to emissions. In fact, if this policy was in place globally I would likely drop my opposition to new oilsands infrastructure. Probably, whatever I decided to do would be moot, because a global carbon tax would reduce demand and price new carbon-intensive bitumen projects out of the picture.
Now, you are rightly concerned about tax leakage, as one country charges a carbon tax while its trading partners get a free ride and a boost to competitivity by not charging one. This would not be easy to solve, but a border fee could be imposed on imports within WTO rules, at least according to this presentation via the Citizens' Climate Lobby.
Having said all of that, getting a carbon tax introduced with our current governments in advanced economies appears to be a very long shot, although I will continue to lobby and vote for it. In the meantime, I will continue to focus part of my energy on stopping individual infrastructure projects. At least we have a fighting chance to score a win there on KXL and the pipeline projects through BC to the Pacific.
Moving on to the question of the materiality of the oilsands on emissions. Proponents of new fossil-fuel infrastructure often like to emphasize to very small effect that any single project will have on global emissions and temperatures. Meanwhile, when looking at the benefits, these are looked at in local terms. We might hear that project X will provide (say) 20,000 new jobs in Alberta, Texas or Queensland. Never do we see that expressed as employing 0.0003% of the world's population. However, nobody sees anything wrong with saying that the emissions of (say) 100 million tons of CO2 per year are a mere 0.3% of the world's emissions, deeming it a drop in the bucket.
Now, 20,000 jobs would be a significant boost to the Canadian economy and not something anyone would sniff at. If we look at the emissions in a Canadian context, however, they start to look significant, too. (These figures are taken from an article on my blog and are slightly modified from Environment Canada originals.)
Here is what it looks like relative to Canada's own emissions targets.