Research

This briefing outlines compelling reasons for investors to question whether TransCanada should proceed with Keystone XL given various obstacles facing its construction and commercially viable operation, and suggests questions institutional financiers may wish to ask TransCanada.

According to a new report released today by Rainforest Action Network, Oil Change International, and 10 organizations from around the world, commercial banks continue to finance the tar sands sector at levels that do not align with the Paris Agreement 1.5° to 2° target – and finance levels are surging in 2017.

A new report exposes the huge financial risks behind three major Canadian tar sands pipeline project proposals: Kinder Morgan’s Trans Mountain Expansion, TransCanada’s Keystone XL and Enbridge’s Line 3 expansion.

The Alberta tar sands are among the world’s largest oil reserves. While investment and expected growth in the industry have been high for the last decade, new industry data paints a dramatically different picture of the sector moving forward.

New analysis finds that Canada will be the world’s second highest contributor of new oil production globally over the next twenty years if action isn’t taken to halt new tar sands pipelines and production growth. Once extracted, much of this oil will be burned, pushing global temperature limits over the brink.

With Shell in the Arctic, the scale and volume of the blowback from the environmental community has clearly caught the Administration flat footed. When confronted, they usually first mumble something about highest standards (which is completely irrelevant to the climate argument) but if pressed, the Administration and its defenders invoke a sober, scolding tone to explain: 1) We need oil and we will need oil for a long time. While we’re all concerned about climate, we’re still going to need oil and gas in the future and we might as well make as much of it as possible right here at home. 2) U.S. oil production is essentially irrelevant for climate, because “more oil production in one place generally means less oil production elsewhere – that’s how markets and prices work”. Together, these two arguments form what we can think of as the Convenient Lie that we can be serious about fighting climate change and also approve virtually all new fossil fuel infrastructure in the U.S. It’s the Convenient Lie that keeps us from dealing with the Inconvenient Truth.

A new report by the Institute for Energy Economics and Financial Analysis (IEEFA) and Oil Change International quantifies for the first time the financial and carbon impact of public opposition to pipelines and other expanded investment in tar sands production.

Refineries that may be supplied by Keystone XL continue to increase exports. Gulf Coast refined product exports have grown 172% since 2008.

The Obama administration’s decision on the proposed Keystone XL tar sands pipeline is a choice about our climate future. Tar sands are one of the most carbon polluting sources of oil on the planet, and limiting tar sands expansion is critical to fighting dangerous levels of climate change. Climate scientists, energy experts, and even Wall Street and industry analysts agree that the oil industry’s plans to expand tar sands development are not possible without this pipeline.

Building Keystone XL will actually create a surplus of heavy oil on the Gulf Coast and force Canadian producers to regularly export their dirty oil into the world market. It is therefore clearer than ever that Keystone XL will facilitate more tar sands production and the increased Greenhouse Gas pollution that goes with it. Building the pipeline will clearly not meet the criteria of no significant increase in carbon emissions set by President Obama. The sooner that Democrats and Republicans wake up to the fact that Big Oil works only in its own interest and not in the national interest, the sooner we may start to move towards the clean energy future we so desperately need.