Trains will move tar sands oil, if the Keystone XL doesn't
Pipe is stacked at the southern site of the Keystone XL pipeline on March 22, 2012 in Cushing, Oklahoma. A study commissioned by the State Department concludes that building the Keystone XL pipeline won't contribute to global warming, because Canadian tar sands oil will get to market with or without the pipeline.
The State Department's latest environmental impact report says building the Keystone XL pipeline would have no additional impact on climate change, because that oil will simply flow by train instead. Michael Levi at the Council on Foreign Relations says oil companies would prefer to send oil from the Canadian tar sands to refineries by pipeline because it's cheaper. Pipelines cost about $5 per barrel of crude.
"But if it turns out they need to spend $20 a barrel to move it by rail, they're going to do that instead of leaving this $100 a barrel oil in the ground," he says.
Since railroads already carry tar sands oil, and plan to carry much more, it does not matter if the Keystone XL pipeline gets built, from a climate change perspective. That's what the new State Department report says: that the tar sands oil is going to get transported and burned, and its greenhouse gases will go into the air, no matter what. But Anthony Swift with the Natural Resources Defense Council says canceling the pipeline buys more time.
"One of the first steps to addressing climate change is to stop making things worse," he says. "Keystone XL clearly would make things worse. More tar sands would be produced more quickly."
Not giving the U.S. a chance to cut back on oil consumption. Jeffery Elliott follows rail transport at Oliver Wyman, and says no one can predict how much oil will move by rail in the next few years. Both industries -- oil and rail -- are changing drastically day by day because of all the new development of tar sands and shale oil.
"It's hard enough to see your hand in front of your face, much less the horizon," he says.
Elliott says tar sands oil is so thick that it can be easier to put it in a rail car than dilute it to flow through a pipeline. So rail business for oil is bound to keep growing no matter what happens with Keystone XL.