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Some 15,000 pieces of pipe for TransCanada Corp.’s Keystone XL pipeline lie in a field in North Dakota on April 23, 2013. The Gascoyne pipe yard holds 350 kilometres of pipe, nearly a third of Keystone XL’s route from Hardisty, Alta. to Steele City, Neb.

Nathan VanderKlippe/The Globe and Mail

The State Department's favourable assessment of the Keystone XL pipeline has sparked a backlash by U.S. opponents, who insisted Monday the review opens the door for President Barack Obama to reject TransCanada Corp.'s cross-border permit.

On the face of it, the environmentalists appear to be clutching at rhetorical straws, even as they planned a countrywide vigil Monday night to oppose the pipeline.

But if for reasons of domestic politics or national and international climate policy U.S. Secretary of State John Kerry and President Obama are inclined take a symbolic stand against what opponents have labelled "the dirtiest oil on the planet," a rationale could be constructed from last week's environmental impact statement.

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"What happened on Friday we think sets the stage for a rejection," said Danielle Droitsch, a senior attorney at the Natural Resources Defense Council.

"Building a pipeline like Keystone XL creates significant infrastructure to facilitate the development of some of the dirtiest oil on earth. That is completely relevant to the national policy discussion about where the U.S. is heading in terms of climate leadership and new energy."

The long-awaited report was hailed in Calgary and Ottawa as a win for Keystone XL. Directly addressing President Obama's climate imperative, it concluded that the approval of the pipeline would have little impact on the pace or scale of oil sands development, and hence on the amount of greenhouse gases emitted into the atmosphere.

Case closed, said TransCanada chief executive officer Russ Girling and federal National Resources Minister Joe Oliver. Mr. Girling even suggested the White House should cut short a mandated 90-review process, which allows other agencies, including the Environmental Protection Agency, to weigh in on the question of whether the pipeline project is in the national interest of the United States.

But in a conference call Friday, assistant secretary of state Kerri-Ann Jones emphasized that the environmental impact assessment did not amount to a recommendation, and that the conclusion that the project would not contribute to greenhouse gas emissions was subject to a number of assumptions about North American crude market.

The report "presents considerable analysis, but it does not answer the broader question about how a decision on the proposed project would fit into the broader national and international effort to address climate change or other questions of foreign policy or energy security," she said.

The State Department did present one scenario in which a decision on Keystone XL would be material to oil sands' emissions – one in which low oil prices made rail transport too expensive and other proposed pipeline projects failed to proceed. It rated that scenario as unlikely.

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But climate activists argued Monday that the president should not proceed as if the market will develop as the State Department analysis assumes, but that he should work to achieve a scenario that would limit carbon emissions from the oil industry generally, and the oil sands specifically.

In a blog on Huffington Post, Columbia University economist Jeffrey Sachs slammed the report, saying it "portrays the U.S. government as a helpless bystander to climate calamity" instead of an active, policy-making agent.

The decision on the Keystone XL carries enormous symbolic importance as Mr. Obama prepares for a United Nations climate summit next September. European Union climate commissioner Connie Hedegaard has urged the president to block the pipeline, saying such a decision would send "an extremely strong signal" to the world.

But Michael Levi, an energy expert at the Council on Foreign Relations, suggests in a blog post that the symbolism would be empty showmanship. The State Department report shows KXL will have little impact on carbon emissions. If the president wants to reject the pipeline on climate grounds, "he'll need to thread a very small needle" to make the case, Mr. Levi said.

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About the Author
Global Energy Reporter

Shawn McCarthy is an Ottawa-based, national business correspondent for The Globe and Mail, covering a global energy beat. He writes on various aspects of the international energy industry, from oil and gas production and refining, to the development of new technologies, to the business implications of climate-change regulations. More

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