UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

WASHINGTON, D.C. 20460

FE9 2 -- 201~
ASSISTANT ADMINISTRATOR
FOR ENFORCEMENT ANO
COMPLIANCE ASSURANCE

Mr. Amos Hochstein
Special Envoy and Coordinator for International Energy Affairs
Bureau of Energy Resources
U.S . Department of State
Washington, DC 20520
Ms. Judith G. Garber
Acting Assistant Secretary
Oceans and International Environmental and Scientific Affairs
U.S. Department of State
Washington, DC 20520
Dear Mr. Hochstein and Ms. Garber:
In accordance with our authorities under the National Environmental Policy Act (NEPA) and
Section 309 of the Clean Air Act, EPA has reviewed the Department of State' s (Department)
Final Supplemental Environmental Impact Statement (SEIS) for a Presidential Permit application
by TransCanada Keystone Pipeline, LP (Keystone) to construct and operate the Keystone XL
Project (Project). We are providing these comments now, rather than when the Final SEIS was
published, because of the possibility that a decision of the Nebraska courts would have led to
changes to the Final SEIS.
EPA recognizes that the Department has made a considerable effort to evaluate the potential
environmental impacts associated with the proposed Project and reasonable alternatives, and to
consider measures to mitigate potential harmful effects. The Final SEIS is comprehensive and
provides responses to our April 2013 comments on the Draft SEIS. We would like to especially
point out the usefulness of the new compilation of all of the proposed mitigation measures
(Appendix Z).
The Department has also strengthened the analysis of oil spill prevention preparedness, response
and mitigation and has committed to requiring numerous mitigation measures regarding leak
prevention and detection, as well as spill cleanup measures. While risks of oil spills and adverse
impacts remain, and spi lls of diluted bitumen can have different impacts than spills of
conventional oil, the Department has included provisions to reduce those risks, including
working with the state of Nebraska to develop an alternative route that avoids much of the Sand
Hills region, and incorporating mitigation measures recommended by both the Pipeline Safety
and Hazardous Materials Administration and the independent engineering analysis. We note as
particularly impo1iant the commitment by Keystone to be responsible for clean-up and

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 restoration of groundwater as well as surface water in the event of a release or discharge of crude
oil. These efforts will decrease the risk of spi ll s and leaks, and provide for necessary remediation
should spills occur. Nonetheless, the Final SEIS acknowledged that the proposed pipeline does
present a risk of spills, which remains a concern for citizens and businesses relying on
ground water resources crossed by the route.
The ana lysis of cl imate change issues has al so improved from the Draft SEIS. The Final SEIS
makes clear that oil sands crude has significantl y higher lifecycle greenhouse gas emissions than
other crudes. The Final SEIS states that lifecycle greenhouse gas emissions from development
and use of oil sands crude is about 17% greater than emissions from average crude oil refined in
the United States on a well s-to-wheels basis. 1
The Final SEIS also find s that the incremental greenhouse gas emissions from the extraction,
transport, refining and use of the 830,000 barrels per day of oi ls sands crude that could be
transported by the proposed Project at full capacity would result in an additional I .3 to 27.4
million metric tons of carbon dioxide equivalents (MMTC02-e) per year compared to the
reference crudes.2 To put that in perspective, 27.4 MMTC0 2-e per year is equivalent to the
annual greenhouse gas emi ssions from 5.7 mi ll ion passenger vehicles or 7.8 coal fired power
plants. 3 Over the 50-year lifetime of the pipeline, this could translate into releasing as much as
1.37 billion more tons of greenhouse gases into the atmosphere. 4
Until ongoing efforts to reduce greenhouse gas emissions associated with the production of oil
sands are more successful and widespread, the Final SEIS makes clear that, compared to
reference crudes, development of oil sands crude represents a significant increase in greenhouse
gas emissions.
The Final SEIS also provided a more robust market analysis, and examined how market
dynamics may influence the levels of greenhouse gas emissions associated with the proposed
Project. Based on that market analysis, the Final SETS concluded, in January of 20 14, that if the
Project were not approved, oi l sands crude would be likely to reach the market some other way,
most likely by rail. The Final SEIS acknowledged that the alternative of shipment by rail is more
expensive than shipment by pipeline, and wou ld therefore increase the costs of getting oil sands
crude to market. 5 However, the Final SEIS concluded that given global oil pri ces projected at
that time this difference in shipment costs would not affect development of oi l sands, which
would remain profitable even with the higher transportation costs of shipment by rail. Therefore,
the Final SEIS concluded that although development of oil sands would lead to significant
additional releases of greenhouse gasses, a decision not to grant the requested permit would
likely not change that outcome, i.e., those significant greenhouse gas emissions would likely
happen regardless of the decision on the proposed Project. This conclusion was based in large
part on projections of the global price of oil.

1

2
3

Final SEIS Executive Summary, p. ES-1 5. 

Final SEIS Executive Summary, p. ES-1 5. 

Final SEIS p. 4. 14-46. 


~ Final
5

SEIS p. 4.14-41. 


Final SEIS p. 1.4-90. 


2


 Given the recent variability in oil prices, it is important to revisit these conclusions. While the
overall effect of the Proj ect on oi l sands production will be driven by long-term movements in
the price of oil and not short term volatility, recent large declines in oi l prices (oil was trading at
below $50 per barrel last week) highlight the variability of oil prices. The Final SETS concluded
that at sustained oil prices of $65 to $75 per barrel, the higher transportation costs of shipment by
rai l "could have a substantial impact on oil sands production levels - possibly in excess of the
capacity of the pro posed project."6 In other words, the Final SEIS fo und that at sustained oil
prices within this range, construction of the pipeline is projected to change the economics of oi l
sands development and result in increased o il sands production, and the accompanying
greenhouse gas emi ssions, over what would otherwise occur. Given recent large declines in oil
prices and the uncertainty of oil price projections, the additional low price scenario included in
the Final SEIS sho uld be given additional weight during decision making, due to the potential
implications of lower oil prices on proj ect impacts, especially greenhouse gas emi ssions.
Final ly, we note that the Final SEIS includes additional information on how the Department
screened pipeline route alternatives, and determined what routes to analyze in detail in the SEIS.
Th rough this process, the Department determined that the Keystone Corridor alternatives, which
wou ld parallel the entire existing Keystone pipeline route in the United States, are not reasonable
alternatives for the purposes of NEPA. The additional information provided in the Final SEIS is
useful, but we note that eliminating alternatives from a detailed analysis based o n an abbreviated
estimate of envi ronmental impacts is not the preferred approach under NEPA ' s requirement to
take a " hard look" at alternatives, which would provide a more detailed and comprehensive
discussion of the issues associated with these route alternatives.
Pleuse feel free to contact me or have your staff contact Susan Bromm, Director, Offi ce of
Federal Activities, at (202) 564-5400 if you have any questions or would li ke to d iscuss our
comments.
Sincere ly,

" Final SEIS Executive Summary, p. ES- 12.

3