New report raises no major objections to Keystone XL pipeline

WATCH: The latest U.S. State Dept. report concluded the Keystone XL pipeline would not significantly impact the environment and would not significantly affect the extraction of oil from Alberta’s oilsands. Vassy Kapelos and Tom Clark explain.

WASHINGTON – The often-delayed, hotly debated Keystone XL pipeline has taken one step closer to completion.

A long-awaited report by the U.S. State Department says the development of the Alberta oilsands is driven by many more factors than a single pipeline and rejects the argument by environmental groups that stopping the pipeline would thwart the oilsands.

READ MORE: Opponents vow to watch southern leg of Keystone XL ‘like a hawk’

The report notes that its conclusion is no different on that score from previous State Department studies into the oft-stalled project: That the construction of the Keystone XL pipeline would not significantly affect the rate of extraction of the oilsands, based on projected prices, demand, and extraction costs.

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“The dominant drivers of oilsands development are more global than any single infrastructure project,” said the report’s executive summary.

WATCH: Natural Resources Minister Joe Oliver says today’s report is a positive step towards approval

“Oilsands production and investment could slow or accelerate depending on oil price trends, regulations, and technological developments, but the potential effects of those factors on the industry’s rate of expansion should not be conflated with the more limited effects of individual pipelines.”

Scroll down to read the executive summary or click here for the full report

The findings are sure to be touted by the Harper government, and supporters of the project on both sides of the border. They appear to answer, in the negative, the key question President Barack Obama has set as his standard for whether to approve the project: Will this pipeline significantly increase greenhouse gases?
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Still, the Keystone debate remains far from the finish line.

Watch above: White House spokesperson Jay Carney says the report doesn’t represent a decision by the administration, and suggests one reason why the process has taken ‘as long as it has.’

READ MORE: Report on rail risks boosts Keystone XL

The Environmental Protection Agency and other U.S. government departments now have 90 days to comment on the report.

The final decision on whether the pipeline may be built will be made by U.S. President Barack Obama.

A map of the proposed route of the Keystone XL pipeline:


A spokeswoman for Secretary of State John Kerry bluntly noted that he can take as long as he wants to make a recommendation to the president.

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“Technically there’s no deadline,” Kerry spokeswoman Melanie Harf told a press briefing.

WATCH: State Department spokesperson Marie Harf on when Secretary of State John Kerry will become involved in the process, and how the public can have their say following the release of the State Department report on Keystone XL.

Meanwhile, opponents are threatening to bury the project in litigation.

There’s already a lawsuit in Nebraska to prevent the governor from forcing landowners to allow the pipeline on their path.

And there’s an ongoing State Department internal investigation into conflict-of-interest allegations against contractors who worked on the report, but had also done past work for pipeline builder TransCanada Corp.

Keystone Environmental Impact Statement: Executive Summary

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There were some raised eyebrows in Washington that the State Department report was released before, not after, the internal review into the allegations against its authors.

Project opponents made it abundantly clear that they wouldn’t be deterred.

“In addition to the fact that (the report authors) ignored the science, interagency criticism, basic economics of the industry and TransCanada’s own recent admission that the pipeline is the key to opening up the tar sands, the fact that a foreign oil company and foreign government were given critical intelligence ahead of everyone else tells you all you need to know about how useless this (report) is,” said an adviser to billionaire Keystone opponent Tom Steyer.

Those comments from a deep-pocketed Obama donor illustrate the president’s dilemma on the file.

He has been squeezed on one end by activists within his party, including influential donors, and on the other side by powerful economic interests, the please of America’s northern neighbour, and criticism that the stalling has undermined his goal of creating jobs.

The Canadian government has become increasingly strident in demanding an answer soon. Foreign Affairs Minister John Baird was in Washington recently pleading for a prompt reply, saying he didn’t want to see another construction season wasted.

READ MORE: Saskatchewan Premier Brad Wall says Keystone report cause for optimism

The company has complained of having lost money while its already-purchased materials for the pipeline sit idle. Pipeline workers, meanwhile, have complained that the uncertainty has hurt them financially.

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The report described the extent, and limits to, the economic impact.

The report says 42,100 direct and indirect jobs will be created for up to two years during construction.

However, it concluded that after the initial construction phase the project would result in a grand total of 50 U.S. jobs – 35 permanent employees and 15 temporary contractors.

The project would generate $55.6 million in property tax in the first year, spread across 27 counties, with a property tax revenue benefit of at least 10 per cent in more than half those counties.

READ MORE: Highlights from the Keystone XL report

But there has been vigorous opposition from just under one-third of the Nebraska landowners on the pipeline path.

They say the financial benefit, for them, doesn’t come close to matching the risk to their soil and water, let alone the impact of oil on greenhouse gases.

The contested route would complete an existing pipeline and carry oil from Alberta and the northern U.S. to Texas refineries. The project is designed to increase Canadian pipeline capacity in the U.S. by about one-quarter, to 2.4 million barrels per day.

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