Denver, Colorado-based research and consultancy IHS has issued the following comments regarding the Nov. 6 decision to reject construction on the extension to the Keystone XL pipeline, which would have brought heavy oil from Canada’s oil sands to refineries in the US.
IHS responded to President Barack Obama's rejection of TransCanada's application to build the Keystone XL pipeline. The proposed project has spurred a long debate on the pipeline’s possible safety and environmental impacts.
“Today’s decision on the northern leg of the Keystone XL pipeline will have no material impact on greenhouse gas emissions,” said Kevin Birn, director, IHS Energy. “IHS research has consistently shown that oil sands production does not hinge on any one infrastructure project and alternative projects and rail exist. IHS continues to expect over 800,000 barrels per day of new supply to come online by 2020 from existing projects relative to 2014. This will raise total oil sands production to 3 million barrels per day in 2020.”
Jim Burkhard, vice president of IHS Energy, added, “The Keystone XL decision does not mean less oil sands overall but it may complicate oil sands access to the US Gulf Coast, where there is substantial refining capacity for heavy types of crude. The No. 1 beneficiary of all this will be Venezuela and other suppliers of heavy oil that ship to the Gulf Coast by tanker. Venezuela heavy crude is similar to oil sands in both quality and greenhouse gas intensity, and it will continue to be consumed by US refineries in the absence of access to Canadian crude oil.”