Building on November 2013 Carbon Tracker Initiative report on Canadian oil sands, this paper specifically responds to the USDOS FSEIS findings that development of the Keystone XL (KXL) pipeline is “unlikely to significantly impact the rate of extraction in the oil sands.”
We find that FSEIS modeling does not fully explore how the lower transportation costs (relative to rail) enabled by KXL improve producer economics and hence affect future oil sands production. On a stand-alone basis, we find all the available capacity of KXL is economic over rail costs, and this is equivalent to incremental bitumen production in 2018 of 500-525 kbpd (i.e. 25% of Canada’s total 2013 bitumen production) and more over time. Through 2050, cumulative lifecycle greenhouse gas (GHG) emissions attributable to “KXL-enabled production” are equivalent to the annual GHG emissions from one billion passenger vehicles or the annual carbon-dioxide (CO2) emissions from 1400 coal-fired power plants. Put differently, they are nearly equal to total US CO2 emissions in 2013.
Analysts CTI: James Leaton, Reid Capalino, Luke Sussams
External Research Advisors: Mark Fulton, Mark Lewis