Download - Keystone XL Pipeline Supplemental Environmental Impact Statement Executive Summary

7/29/2019 Keystone XL Pipeline Supplemental Environmental Impact Statement Executive Summary

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TransCanada submed a new applcaon or e Keysone XL Projec on May 4, 2012. On Marc 1, 2013 eU.S. Deparmen o Sae (e Deparmen) released a Drat Supplemenal Envronmenal Impac Saemen(Drat SEIS) or e proposed projec a s conssen w e Naonal Envronmenal Polcy Ac (NEPA).

he proposed Keysone XL projec consss o a 875-mle long ppelneand relaed acles o ranspor up o 830,000 barrels per day (bpd) ocrude ol rom Albera, Canada and e Bakken Sale Formaon nMonana. he ppelne would cross e U.S. border near Morgan, Monanaand connue roug Monana, Sou Dakoa, and Nebraska were would connec o exsng ppelne acles near Seele Cy, Nebraska oronward delvery o Cusng, Oklaoma and e Texas Gul Coas regon. 1

A prevous applcaon rom TransCanada or a Keysone XL projec (2008applcaon) was or a ppelne a would ave been more an 1.5 mese leng o e curren proposal (1,384 mles), w nearly dencalroues n Monana and Sou Dakoa. he Fnal Envronmenal ImpacSaemen or a proposal was ssued by e Deparmen on Augus

26, 2011 (2011 FEIS). A perm or e 2008 applcaon was dened.he pendng applcaon proposes a new roue roug Nebraska.Speccally, e roue as been canged o avod e envronmenallysensve area known as e Sand Hlls as oically dened by e NebraskaDeparmen o Envronmenal Qualy (Nebraska DEQ) (See map, let).

Some addonal dferences beween e 2008 applcaon and e currenKeysone XL applcaon currenly under revew by e Deparmen aresummarzed n e ollowng car.

Newly Proposed Project v. 2008 Proposed Project

Newly Proposed Projec 2008 Proposed Projec

Number o Saes Crossed by

Ppelne

3 5

Leng o New Ppelne (mles) 875 1,384

NDEQ-Idened Sand Hlls

Regon Crossed (mles)

0 90

Surace Waerbodes Crossed 56 317

The 2008 Application

As par o s revew o e 2008 applcaon, e Deparmen deermned n November 2011 aenvronmenal concerns, ncludng ose rased by e Sae o Nebraska, requred addonal normaono ensure complee and ransparen evaluaon o alernave roues, speccally wn Nebraska, awould avod e Sand Hlls. Congress subsequenly ncluded a provson n e Temporary Payroll Tax CuConnuaon Ac a soug o requre a decson on e Perm wn 60 days. ha deadlne dd noallow suicen me o prepare a oroug, rgorous and ransparen revew o an alernave roue rougNebraska. As suc, e Presdenal Perm was dened.

1Keysone s buldng a separae ppelne roug Oklaoma and Texas a ermnaes n e Texas Gul Coas regon (e Gul Coas Projec) a ollows e

souern poron o er prevous applcaon. he Gul Coas Projec does no requre a Presdenal Perm because does no cross an nernaonal border.

KEYSTONE XL PIPELINE EVALUATION PROCESS FACTSHEET 2013


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The 2012 Application

he Deparmen s currenly revewng an applcaon submed by TransCanada n May 2012. hs DratSEIS presens an mpac assessmen a, were approprae, draws upon e analyss released n Augus2011 or e 2008 applcaon. he Drat SEIS analyzes e newly proposed roue, and presens expandedand updaed normaon, especally w regard o e revsed proposed roue roug Nebraska, as well assgncan new crcumsances or normaon a s now avalable or e enre roue.

Followng e recep and publcaon o e May 2012 applcaon, e Deparmen asked or publc

commen on e scope o e Drat SEIS. hese commens, as well as commens rom oer governmenagences, were aken no consderaon wn e Drat SEIS.

Nebraska Review

he Deparmen and e Nebraska DEQ sgned a Memorandum o Undersandng n May 2012 o ensurecoordnaon o e Sae and Federal revew efors. he Sae o Nebraska released s revew o eproposed roue, based on er law, n December 2012. he Governor o Nebraska approved e new roueroug Nebraska n January 2013. he Deparmen runs a complemenary process on e enre rouea s broader n scope and conssen w NEPA. he seps o e Federal process and e Nebraskaprocess are summarzed below.

Once e Drat SEIS s noced n e Federal Regser, a 45-day publc commen perod wll begn.A publc meeng wll be eld durng e commen perod n Nebraska a a dae and locaon o bedeermned. As par o e Deparmens process, members o e publc, publc agences, and oer

neresed pares are encouraged o subm commens, quesons, and concerns abou e projec vae-mal o:

[email protected], a http://www.keystonepipeline-xl.state.gov/

or maled o:

U.S. Department of State

Attn: Genevieve Walker, NEPA Coordinator

2201 C Street NW, Room 2726

Washington, D.C. 20520

Ater e commen perod, approprae revson o e drat, and subsequen publcaon o e Fnal SEIS,e Deparmen wll lead an ner-agency nqury no weer e proposed Projec serves e naonalneres. he naonal neres deermnaon by e Deparmen nvolves consderaon o many acors,ncludng energy secury; envronmenal, culural, and economc mpacs; oregn polcy; and complancew relevan ederal regulaons and ssues. Durng s me e Deparmen wll consul w, a leas,e eg agences dened n Execuve Order 13337 (Aprl 30, 2004). he eg agences dened ne Execuve Order are e Deparmens o Deense, Jusce, Ineror, Commerce, Transporaon, Energy,Homeland Secury and e Envronmenal Proecon Agency.

For updaes and urer normaon please vs: http://www.keystonepipeline-xl.state.gov
http://%20http//www.keystonepipeline-xl.state.gov/http://%20http//www.keystonepipeline-xl.state.gov/http://%20http//www.keystonepipeline-xl.state.gov/http://%20http//www.keystonepipeline-xl.state.gov/


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United States Department of StateBureau of Oceans and InternationalEnvironmental and Scientific Affairs

DraftSupplementalEnvironmentalImpactStatement

for the

Keystone XL ProjectExecutive Summary

March 2013

Applicant for Presidential Permit: TransCanada Keystone Pipeline, LP


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UnitedStatesDepartmentofState DraftSupplementalEnvironmentalImpactStatement

Forthe

KEYSTONE XL PROJECTApplicantforPresidentialPermit:

TransCanadaKeystonePipeline,LP

GenevieveWalkerNEPAContact&ProjectManager

UnitedStatesDepartmentofState

BureauofOceansandInternationalEnvironmental

andScientificAffairs2201CStreetNW,Room2726

Washington,DC20520

Cooperating AgenciesU.S.ArmyCorpsofEngineers(USACE)

U.S.DepartmentofAgricultureFarmServiceAgency(FSA) U.S.DepartmentofAgricultureNaturalResourceConservationService(NRCS)

U.S.DepartmentofAgricultureRuralUtilitiesService(RUS)

U.S.DepartmentofEnergy(DOE) U.S.DepartmentofInteriorBureauofLandManagement(BLM)

U.S.DepartmentofInteriorNationalParkService(NPS)

U.S.DepartmentofInteriorU.S.FishandWildlifeService(USFWS)

U.S.DepartmentofTransportationPipelineandHazardousMaterialsSafetyAdministration,OfficeofPipelineSafety(PHMSA)

U.S.EnvironmentalProtectionAgency(USEPA)

Assisting AgenciesU.S.DepartmentoftheInterior,BureauofReclamation(BOR)

NebraskaDepartmentofEnvironmentalQuality(NDEQ) VariousStateandLocalAgenciesinMontana,SouthDakota,Nebraska,andKansas

March1,2013


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Keystone XL Project Executive SummaryDraft Supplemental EIS

TABLE OF CONTENTS

ES.1 Introduction 1

ES.1.1 Overview 1

ES.1.2 Project Description 2ES.1.3 Alternatives 2

ES.1.4 Findings 2

ES.2 Context 3

ES.2.1 Purpose and Need 3

ES.2.2 Crude Oil Overview 3

ES.2.3 Market Overview 3

ES.3 EIS Development Process 4

ES.3.1 Presidential Permitting Process 4

ES.3.2 Supplemental EIS Process 4

ES.4 Project Description .4

ES.4.1 Keystone XL Project 4

ES.4.2 Changes Since the Final EIS 6

ES.4.3 Connected Actions 7

ES.5 Environmental Analysis 8

ES.5.1 Soils 8

ES.5.2 Water Resources 9

ES.5.3 Threatened and Endangered Species 11

ES.5.4 Socioeconomics and Environmental Justice 13

ES.5.5 Greenhouse Gas Emissions and Climate Change 14

ES.5.6 Potential Releases 16

ES.5.7 Cumulative Effects 18

ES.5.8 Environmental Impacts in Canada 18

ES.6 Alternatives 18

ES.6.1 Scenario Screening 18

ES.6.2 Market Analysis 19

ES.6.3 No Action Alternative 20

ES.6.4 Major Pipeline Route Alternatives 21

ES.6.5 Other Alternatives Considered 22

ES.7 Next Steps 23

ES.8 Draft Supplemental EIS Contents 23

Table of Contents i March 2013


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Figures

FigureES-1:ProposedKeystoneXLProject 2

FigureES-2:ProposedProjectOverview 5

FigureES-3:KeystoneXL,TypicalPipelineConstructionSequence 6

FigureES-4:SandHillsGrassland 7

FigureES-5:ComparisonofProposedProjectRoutetoPreviouslyProposedProjectSegment 7

FigureES-6:CrossSectionofHorizontalDirectionalDrillingMethod 9

FigureES-7:SchematicHydrogeologicCross-SectionalongProposedPipelineRoute 11

FigureES-8:AmericanBuryingBeetle 12

FigureES-9:GreaterSage-Grouse 12

FigureES-10:WesternPrairieFringedOrchid 13

FigureES-11:SpillVolumeDistributionbyPipelineComponent 17

FigureES-12:TypicalRailLoadingFacilityinNorthDakota 21

Tables

Table of Contents ii March 2013

TableES-1:EffectsofPotentialReleasesonAquifers 10

TableES-2:SpillScenariosEvaluatedinDraftSupplementalEIS 16

TableES-3:SummaryofPHMSADatabaseIncidents(January2002toJuly2012) 16

20 TableES-4:SummaryofNoActionAlternativeScenarios

TableES-5:SummaryofMajorPipelineRouteAlternatives 22


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ES.1 INTRODUCTION

ES.1.1 OverviewTheproposedKeystoneXLPipelineisanew

875-milepipelineinfrastructureprojectthatwould

allowdeliveryofupto830,000barrelsperday(bpd)

ofcrudeoilfromAlberta,Canada,andtheBakken

ShaleFormationintheUnitedStatestoSteeleCity,

NebraskaforonwarddeliverytoCushing,Oklahoma,

andrefineriesintheGulfCoastarea1

1TheGulfCoastareareferstotheregionfromHouston,Texas,toLakeCharles,Louisiana.

.TransCanada

KeystonePipeline,LP(Keystone)hasappliedfora

PresidentialPermitwhich,ifgranted,would

authorizetheproposedpipelinetocrosstheUnited

States-Canadianborder.

Forproposedpetroleumpipelinesthatcross

internationalbordersoftheUnitedStates,the

President,throughExecutiveOrder13337,directsthe

SecretaryofStatetodecidewhetheraprojectisin

thenationalinterestbeforegrantingaPresidentialPermit.Thenationalinterestdeterminationbythe

U.S.DepartmentofState(theDepartment)involves

considerationofmanyfactors,includingenergy

security;environmental,cultural,andeconomic

impacts;foreignpolicy;andcompliancewith

relevantfederalregulations.Beforemakingsucha

decision,theDepartmentalsoasksfortheviewsof

theDepartmentsofEnergy,Defense,Transportation,

HomelandSecurity,Justice,Interior,andCommerce,

andtheU.S.EnvironmentalProtectionAgency.

Background

Previously,Keystonesubmittedanapplicationforthe

samebordercrossing,butwithapipelinerouteinthe

UnitedStatesthatdifferedfromtheroutethatis

currentlyproposed.Thebiggestdifferenceinthe

previousroutecomparedtothecurrentoneisthatit

wentthroughtheSandHillsRegionofNebraskaas

identifiedbytheNebraskaDepartmentof

EnvironmentalQuality(NDEQ).Aseparate

EnvironmentalImpactStatementwasissuedin

August2011forthatroute.InNovember2011,the

Departmentdeterminedthatadditionalinformation

wasneededtofullyevaluatetheapplication,in

particular,additionalinformationaboutalternativerouteswithinNebraskathatwouldavoidtheSand

HillsRegion.InlateDecember2011,Congress

adoptedaprovisionoftheTemporaryPayrollTax

CutContinuationActthatsoughttorequirethe

PresidenttomakeadecisiononthePresidential

Permitforthatroutewithin60days.Thatdeadline

didnotallowsufficienttimetoprepareathorough,

rigorous,andtransparentreviewofanalternative

routethroughNebraska.Assuch,thePresidential

Permitwasdenied.

InFebruary2012,KeystoneinformedtheDepartment

thatitconsideredtheGulfCoastportionofthe

previouspipelineproject(fromCushing,Oklahoma,totheGulfCoastarea)tohaveindependenteconomic

utilityandindicateditintendedtoproceedwith

constructionofthatpipelineasaseparateproject,the

GulfCoastProject.TheGulfCoastProjectdoesnot

requireaPresidentialPermitbecauseitdoesnotcross

aninternationalborder.ConstructionontheGulf

CoastProjectisunderway.

OnMay4,2012,KeystonefiledaPresidentialPermit

applicationforanewKeystoneXLProject.The

proposedProjecthasanewrouteandanewstated

purpose.TherouteinMontanaandSouthDakota

wouldbelargelyunchangedfromtherouteanalyzedinAugust2011.However,thenewlyproposedroute

notonlyavoidstheNDEQ-identifiedSandHills

RegionbutalsoterminatesatSteeleCity,Nebraska,

andthusisapproximatelyhalfthelengthofthe

previouslyproposedprojectanalyzedin2011.In

otherwords,thenewlyproposedProjectis509miles

shorterthanthepreviouslyproposedprojectanalyzed

in2011.

About the Draft Supplemental Environmental Impact

Statement

TheDepartmenthasissuedthisdraftSupplemental

EnvironmentalImpactStatement(draftSupplemental

EIS)thatbuildsontheanalysiscompletedinAugust

2011(theFinalEnvironmentalImpactStatementor

FinalEIS).Theanalysishasbeenrevised,expanded,

andupdatedtoincludeacomprehensivereviewof

thenewrouteinNebraskaaswellasanysignificant

newcircumstancesorinformationthatisnow

availableonthelargelyunchangedroutethrough

MontanaandSouthDakota.

IncompletingthedraftSupplementalEIS,the

Departmenttookintoconsiderationthecomments

containedinmorethan400,000e-mails,letters,and

othercommunicationssubmittedthroughoutthescopingprocessbypubliccitizens,government

agencies,Tribalgovernments,andinterestednon-

governmentalorganizationsaswellasoverone

millione-mails,letters,andothercommunications

submittedtotheDepartmentduringitsconsideration

ofthepreviousKeystoneXLapplication.

Executive Summary ES-1 March 2013


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Expandedandnewanalysesinclude,amongothers:

economiceffectsoftheproposedproject,impacts

frompotentialreleasesorspills,impactsrelatedto

climatechange,andcumulativeeffectsfromthe

proposedprojectincombinationwithotherprojects.

TheDepartmentre-examinedandexpandedthe

evaluationofprojectalternatives,includingareasonableroutealternativeandotherscenariosof

crudeoiltransport,suchasrail.TheDepartmentalso

updatedtheanalysisoftherelationshipofthe

proposedprojecttocrudeoilmarketsinlightof

developmentssinceAugust2011,whichincludesan

updatetotheassessmentofwhethertheproposed

Projectislikelytoimpacttheextractionratefromthe

oilsandsinCanada,andthusimpactgreenhousegas

(GHG)emissionsassociatedwiththatextraction.

TheExecutiveSummaryonthefollowingpages

brieflypresentsthecontentsofthedraft

SupplementalEIS,includingthepurposeandneedoftheproposedProject,keypotentialimpacts,measures

toreduceormitigatethoseimpactsifapermitwas

granted,andalternativestotheproposedProject.

ES.1.2 Project DescriptionTheproposedKeystoneXLPipelineProjectconsists

ofa36-inchpipelineandrelatedfacilitiesthatwould

allowfortransportofupto830,000bpdofcrudeoil

fromtheWesternCanadianSedimentaryBasin

(WCSB)inAlberta,Canada,andfromtheWilliston

Basin(Bakken)regioninMontanaandNorthDakota,

primarilytorefineriesintheGulfCoastarea.Thereis

existingdemandforcrudeoil,particularlyheavycrudeoilatrefinersintheGulfCoastarea,butthe

ultimatedispositionofcrudeoiltransportedbythe

proposedProject,andanyrefinedproductsproduced

fromthatcrudeoil,wouldbedeterminedbyfuture

marketforces.

ThisdraftSupplementalEISevaluatesthe875-mile

pipelinethatwouldstretchfromtheU.S.-Canadian

bordernearMorgan,Montana,totheexisting

KeystonepipelineinSteeleCity,Nebraska.Asnoted

above,thedraftSupplementalEISbuildsonand

supplementstheanalysiscompletedinAugustin

2011byspecificallyaddressingthenewrouteinNebraskaaswellasanysignificantnewinformation

thathassincebecomeavailable.

Figure ES-1: Proposed Keystone XL Project

ES.1.3 AlternativesInadditiontominorroutevariationsandpipeline

designoptions,thedraftSupplementalEISconsiders

thefollowingalternativestotheproposedProject.

The No Action Alternative evaluatesscenariosthatarelikelytooccuriftheproposedProjectisnotbuilt,includingrailandvessel-basedoptionsfortransportingWCSBandBakkencrudeoiltotheGulfCoast.

Major Route Alternatives evaluatetheimpactsofchangingtherouteofthepipeline.Specificalternativesincludetheroutepreviously

proposedaswellasaroutethatparallelsInterstate90inSouthDakotabeforejoiningtheright-of-way(ROW)oftheexistingKeystonepipeline.

ES.1.4 FindingsChapter4ofthedraftSupplementalEISgives

detailedfindingsabouttheproposedProjects

impacts.Amongtheseareresourceswhereimpacts

couldpotentiallybesubstantial,orthathavebeenthe

focusofsignificantpublicattentionandcomment.

Thesekeyresourceareasinclude:

Soils(includingsandyanderodiblesoils); Groundwater,includingaquiferssuchasthe

OgallalaAquifer;

Surfacewaterresources;

Socioeconomics,includingthepotentialjobandrevenuebenefitsoftheproposedProject,aswellasconcernsaboutenvironmentaljustice;



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LifecycleGHGemissionsassociatedwithoilsandsdevelopment,refining,andconsumption;and

Potentialreleasesorspills.

ES.2 CONTEXT

ES.2.1 Purpose and NeedTheDepartmentmustdetermineiftheproposed

Projectisinthenationalinterestpursuantto

ExecutiveOrder13337.TheDepartmentevaluates

theproposedProjectspurposeandneedconsistent

withtheNationalEnvironmentalPolicyAct(NEPA).

AccordingtotheapplicationsubmittedbyKeystone,

theprimarypurposeoftheproposedProjectisto

providetheinfrastructuretotransportheavycrudeoil

fromtheborderwithCanadatodeliverypointsinthe

UnitedStatesbyconnectingtoexistingpipeline

facilitiesnearSteeleCity,Nebraska.TheproposedProjectismeanttorespondtothemarketdemandof

refineriesforheavycrudeoil.TheproposedProject

wouldalsoprovidetransportationforlightcrudeoil

fromtheBakkeninNorthDakotaandMontana(as

wellasfromCanada).

TheproposedProjectwouldhavethecapacityto

deliverupto830,000bpd.Keystonehasrepresented

thatithasfirmcommitmentstotransport

approximately555,000bpdofheavycrudeoilfrom

producersintheWCSB.Inaddition,Keystonehas

representedthatithasfirmcommitmentstotransport

65,000bpdofcrudeoilfromtheBakkenofthe100,000bpdofcapacitysetasideontheproposed

Projectforthatpurpose.Theultimatemixtureand

quantityofcrudeoilstransportedbytheproposed

Projectoveritslifetimewouldbedeterminedby

futuremarketforces.

ES.2.2 Crude Oil OverviewOilproducerssendavarietyofcrudeoilstorefiners

toproduceconsumerproductssuchasgasoline,

dieselfuelfortrucks,heatingoil,andrawmaterials

forplasticsandmedicines.EachU.S.refineryhas

differenthardwareequipmentandcapacity,

metallurgy,andtreatingprocessesanddifferent

resultingmixesoffinishedproducts.

TheproposedProjectwouldprimarilytransportcrude

oilfromtheWCSBandBakkenregions.The

majorityoftheoilfromWCSBsourcesisconsidered

aheavycrudeoil,whileBakkencrudeisconsidereda

lightcrudeoil.Ingeneral,refineriesintheGulfCoast

areaaredesignedtoprocessamixtureofheavyand

lightcrudes.Therefineriesinthatregionpossessone

ofthehighestconcentrationsofheavy-cruderefining

capacityofanyareaintheworld.GulfCoastrefiners

usebothdomesticcrudeoilproducedintheUnited

States,andcrudeoilimportedfromforeigncountries

tocreatevariouspetroleumproducts.

ThecrudeoilfromtheWCSBisproducedasaviscousmaterial,knownasrawbitumen,thathasthe

consistencyofsoftasphalt.Duetoitsviscosity,

bitumencannotbetransportedbypipelineonitsown.

Itfirstmustbemixedwithapetroleum-basedproduct

(calledadiluent),suchasnaphthaornaturalgas

condensate,tomakealessviscousliquidcalled

dilbit;oritmustbeupgraded(partiallyrefined)toa

mediumweightcrudeoilcalledsyntheticcrudeoil.

Ifdiluentsarenotavailable,producersusesynthetic

crudeoilasthediluenttocreateaproductcalled

synbit.TheproposedProjectisexpectedtocarry

predominantlyeitherdilbit,synbit,orboth,aswellassyntheticcrudeoilandlightcrudeoilproducedfrom

theBakken.

ES.2.3 Market OverviewRefinersdeterminetheoptimalcrudestoprocess

similartoothermanufacturingcompaniesthatselect

therightrawmaterialstomanufactureproducts.

Refiningcompaniespaymarketpricesforcrudeoil,

andmeasuretheirprofitabilitybasedonsellingtheir

productintothewholesalemarket.Theythenusethat

margin(thedifferencebetweenthepriceofcrudeand

thepriceoftherefinedproducts)tocovertheir

expensesandgenerateprofits.Refinersmayselectamoreexpensivecrudeoilifthatcrudeoilsyield

providesagreatermarginthanacheapercrudeoil.

TheproposedProjectseekstocapitalizeonthe

demandsofrefinersforastablesupplyofbothheavy

andlightcrudeoil.RefineriesintheGulfCoastrely

mostlyonforeignimports,particularlyfrom

VenezuelaandMexico,aswellasfromother

countries.However,thevolumeofcrudeexports

fromMexicoisdeclining.Thelong-termcontracts

supportingtheproposedProjectindicatethatrefiners

seeeconomicadvantagestoprocessingheavyWCSB

crudeoilaswellasthedomesticallyproducedBakkenlightcrudeoil,whicharebothgrowingin

supplyandmaybelessexpensivetotransporttothe

refinerythanimportedcrudeoilsthatareshippedby

tanker.Adetailedanalysisofthemarketispresented

intheSupplementalEISanddiscussedfurtherinthe

MarketAnalysissectionofthisExecutiveSummary.



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ES.3 EIS DEVELOPMENT PROCESS

ES.3.1 Presidential Permitting ProcessForproposedpetroleumpipelinesthatcross

internationalbordersoftheUnitedStates,the

President,throughExecutiveOrder13337,directsthe

SecretaryofStatetodecidewhetheraprojectisinthenationalinterest.IftheproposedProjectis

determinedtobeinthenationalinterest,itisgranted

aPresidentialPermitthatauthorizestheconstruction,

operation,andmaintenanceofthefacilitiesatthe

borderbetweentheUnitedStatesandCanada.The

Departmentsjurisdictiondoesnotextendtocover

selectionofpipelinerouteswithintheUnitedStates.

ThedraftSupplementalEISwasproducedconsistent

withNEPAandwillhelpinformthatdetermination.

TheNationalInterestDetermination(orNID)

involvesconsiderationofmanyfactors,including

energysecurity;environmental,cultural,andeconomicimpacts;foreignpolicy;andcompliance

withrelevantfederalregulations.Beforemakingsuch

adecision,theDepartmentseekstheviewsofthe

eightfederalagenciesidentifiedinExecutiveOrder

13337:theDepartmentsofEnergy,Defense,

Transportation,HomelandSecurity,Justice,Interior,

andCommerce,andtheU.S.Environmental

ProtectionAgency.TheDepartmentisalsosoliciting

publicinputonthedraftSupplementalEIS.

ES.3.2 Supplemental EIS ProcessInSeptember2012,Keystonesubmittedan

EnvironmentalReportinsupportofitsPresidentialPermitapplicationprovidinganupdateoftheimpacts

oftheproposedProjectanddescribingseveral

modificationstotheoriginallyproposedpipeline

routetoreduceenvironmentalimpacts,improve

constructability,andinresponsetoagencyandpublic

comments.

ToassistinpreparingthedraftSupplementalEIS,the

Departmentretainedanenvironmentalconsulting

firm,EnvironmentalResourcesManagement,Inc.

(ERM).ERMwasselectedpursuanttothe

Departmentsinterimguidanceontheselectionof

independentthird-partycontractors.ERMworksatthesoleandexclusiveinstructionoftheDepartment

andisnotpermittedtocommunicatewithKeystone

unlessspecificallydirectedtodosobyDepartment

officials.PreparationofthedraftSupplementalEIS

occurredovera5-monthperiodandincluded

consultationwithERM,cooperatingagencies,

scientists,andengineerswithexpertiseinkeyareas

ofconcernrelatedtotheproposedProject.

ThisdraftSupplementalEISdescribespotential

impactsoftheproposedProjectandalternatives,

includingdirect,indirect,andcumulativeimpacts.Itbuildsontheworkdoneinthe2011FinalEIS,

includingreferencestothatdocumentthroughoutthe

textwhereappropriate.TheSupplementalEIS

includesananalysisofthemodifiedroutein

Nebraska,aswellasanalysisofanysignificantnew

circumstancesorinformationthathasbecome

availablesincetheAugust2011publicationofthe

FinalEISforthepreviouslyproposedproject.This

draftSupplementalEISalsorelies,where

appropriate,onthedatapresentedandtheanalyses

doneintheFinalEISforthepreviouslyproposed

project,becausemuchoftheproposedpipelinerouteremainsunchangedfromitsAugust2011publication.

Finally,thedraftSupplementalEISalsoincludesthe

latestavailableinformationontheproposedProject

resultingfromongoingdiscussionswithfederal,

state,andlocalagencies.

ES.4 PROJECT DESCRIPTION

ES.4.1 Keystone XL ProjectTheproposedProjectconsistsofacrudeoilpipeline

andrelatedfacilitiestotransportWCSBcrudeoil

fromanoilsupplyhubnearHardisty,Alberta,

Canada,toexistingpipelinefacilitiesnearSteeleCity,Nebraska,foronwarddeliverytoCushing,

Oklahoma,andtheGulfCoastarea.Theproposed

Projectwouldalsotransportdomesticallyproduced

BakkencrudeoilfromaterminalnearBaker,

Montana,totheexistingKeystonePipelinesystemat

SteeleCity,Nebraska.

TheSteeleCitydeliverypointprovidesaccesstothe

existingKeystoneCushingExtensionpipeline,which

deliverscrudeoiltoCushing,Oklahoma,wherethere

isaccesstootherpipelinesystemsandterminals,

includingthoseservingtheGulfCoastarea.The

proposedProjectwouldconsistofapproximately875milesofnew,36-inch-diameterpipelineacross

portionsofMontana,SouthDakota,andNebraska

(anadditional329milesofpipelineinCanadawere

evaluatedbytheCanadiangovernment).FigureES-2

depictstheproposedProjectintheUnitedStates.



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Figure ES-2: Proposed Project Overview



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Figure ES-3: Keystone XL, Typical Pipeline Construction Sequence

ConstructionoftheproposedProjectwouldgenerally

requirea110-foot-wide,temporaryROW,anda

varietyofabovegroundancillaryfacilities.FigureES-3illustratestheconstructionsequencethatwould

befollowedfortheproposedProject.

Ifpermitted,wheninoperation,theproposedProject

wouldmaintaina50-foot,permanenteasementover

thepipeline.Keystonewouldhaveaccesstoproperty

withintheeasement,butpropertyownerswould

retaintheabilitytofarmandconductotheractivities.

Theremainingabovegroundancillaryfacilitieswould

include20electricallyoperatedpumpstations(twoof

whichwouldbebuiltalongexistingsectionsofthe

KeystoneCushingExtensionpipelineinKansas),

44mainlinevalves,and38permanentaccessroads.2

2LocationsforaccessroadsinNebraskahavenotyetbeendeterminedandarenotincludedinthistotal.

TheoverallproposedProjectisestimatedtocost

approximately$3.3billionintheUnitedStates.If

permitted,itwouldbeginoperationin2015,withthe

actualdatedependentonthenecessarypermits,

approvals,andauthorizations.

ES.4.2 Changes Since the Final EIS

TheproposedpipelinerouteintheUnitedStatesthatisthesubjectofthisdraftSupplementalEISissimilar

topartofthepreviousprojectevaluatedintheAugust

2011FinalEIS.Thenewlyproposedroutein

MontanaandSouthDakotawouldbelargely

unchanged,exceptforminormodificationsKeystone

madetoimproveconstructabilityandinresponseto

comments,suchaslandownerrequeststoadjustthe

routeacrosstheirproperty.Thenewproposedroute

is509milesshorterthanthepreviouslyproposed

route;however,itwouldbeapproximately21miles

longerinNebraskatoavoidsensitiveareasincluding

theNDEQ-identifiedSandHillsRegion.Thus,the

newlyproposedrouteissubstantiallydifferentfromthepreviousrouteanalyzedinAugust2011intwo

significantways:itavoidstheNDEQ-identifiedSand

HillsRegionanditterminatesatSteeleCity,

Nebraska.



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Figure ES-4: Sand Hills Grassland

AsshowninFigureES-5,theproposedProjectroute

inNebraskaissubstantiallydifferentfromthe

previouslyproposedrouteanalyzedinthe2011Final

EIS.

Figure ES-5: Comparison of Proposed Project Route to Previously Proposed Project Segment

InadditiontotheNDEQ-identifiedSandHills

Region,theproposedProjectroutewouldavoidareas

inKeyaPahaCountyidentifiedbytheNDEQthat

havesoilandtopographiccharacteristicssimilarto

theSandHillsRegion,anditavoidsormovesfurther

awayfromwellheadprotectionareasfortheVillages

ofClarksandWestern.

ES.4.3 Connected ActionsConnectedactionsareprojectsthatwouldnotbe

constructedoroperatedintheabsenceofthe

proposedProject.Thethreeconnectedactions

associatedwiththeproposedProjectaredescribed

below.Whiletheseprojectswouldbereviewedand

actedonbyotheragenciesasneeded,thedraft

SupplementalEISalsoevaluatestheimpactsofthese

connectedactions.

ES.4.3.1 The Bakken Marketlink Project

KeystoneMarketlink,LLC,awhollyownedsubsidiaryofTransCanadaPipelinesLimited,would

constructandoperatetheBakkenMarketlinkProject.

Thisprojectwouldincludea5-milepipeline,pumps,

meters,andstoragetankstosupplyBakkencrudeoil

totheproposedpipelinefromtheproposedBakken

MarketlinkpipelinesysteminNorthDakotaand

Montana.Threecrudeoilstoragetankswouldbe

builtnearBaker,Montana,aspartofthisproject.

Thisproposedprojectcandeliverupto100,000bpd

ofcrudeoil,andhascommitmentsforapproximately

65,000bpd.

ES.4.3.2 Big Bend to Witten 230-kV Electrical

Transmission LineTheWesternAreaPowerAdministration(Western)

hasdeterminedthatprovidingreliableelectricityfor

operationoftheproposedProjectrequiresthe

constructionofanew230-kilovolt(kV)transmission

line,originatingattheFortThompson/BigBendDam

areainSouthDakotaandextendingsouthtothe

existingWittenSubstation.Tomeetthesedemands,

Westernwouldrepurposeexistingtransmission

infrastructureandconstructnewinfrastructure

betweentheDamandaproposedBigBend

Substation.TheBasinElectricPowerCooperativewouldconstructanew76-mile,230-kVtransmission

linefromtheBigBendSubstationtotheexisting

WittenSubstation,andwouldoperateboththe

transmissionlineandtheBigBendSubstation.



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ES.4.3.3 Electrical Distribution Lines and

SubstationsElectricalpowerfortheproposedProjectwouldbe

obtainedfromlocalpowerproviders.Thesepower

providerswouldconstructthenecessarysubstations

andtransformersandwouldeitheruseexisting

servicelinesorconstructnewservicelinestodeliverelectricalpowertothespecifiedpointofuse(e.g.,

pumpstationsandmainlinevalves),whichwouldbe

locatedatintervalsalongtheproposedProjectroute.

ES.5 ENVIRONMENTAL ANALYSISConstructionoftheproposedProjectwoulddisturb

approximately15,493acresofland.After

construction,approximately5,584acreswouldbe

retainedforoperationoftheproposedProject;this

includesthepipelineROWandaboveground

facilities.Constructionandoperationoftheproposed

Projectwouldresultinnumerousimpactstothe

environment.TheDepartmentevaluatedtheimpactsoftheproposedProjectandalternativesassociated

withthefollowingtypesofresourcesand

consequences:

Geology

Wetlands

Fisheries

Recreation

Culturalresources

Climatechange

Waterresources

Landuse

Pipelinereleases

Soils

Terrestrialvegetation

Threatenedandendangeredspecies

Visualresources

Airquality

Noise

Wildlife

Socioeconomics

TheproposedProjectConstruction,Mitigation,and

ReclamationPlan(CMRP)(seeAppendixG)

includesproceduresthatKeystonewouldfollowto

reducethelikelihoodandseverityof,oravoid

impactsfromtheproposedProject.

Thediscussionbelowsummarizesthefindingsofthe

analysisrelatedtoselectedresourcesand

consequences.TheseresourceswouldeitherbesubstantiallyimpactedbytheproposedProject,or

havebeenthefocusofparticularpublicattentionand

comment.

ES.5.1 SoilsConstructionoftheproposedProjectandits

connectedactionscouldaffectsoilresources.

Potentialimpactscouldinclude,tovaryingdegrees:

Soilerosion;

Lossoftopsoil;

Soilcompaction;

Changesinsoilcomposition(increasedproportionoflargerocksinthetopsoil);

Soilmixing;and

Soilcontamination.

NearlyhalfoftheproposedProjectroutewouldcross

soilscharacterizedashighlyerodibletoeitherwind

orwater,andcommentsonthe2011FinalEIS

expressedconcernabouttheproposedProjects

effectsonerodiblesoils.Manyofthestagesof

constructionnotablyclearing,trenching,andspoil

storagecouldpotentiallyincreasesoilerosion.Such

erosion,inturn,couldresultinlossofvaluable

topsoilfromitsoriginallocation.Theproposed

ProjectavoidstheNDEQ-identifiedSandHillsregion,aswellasareasinKeyaPahaCounty,

Nebraska,definedbyNDEQashavingSandHills-

likesoils.

Thesepotentialimpactswouldbemitigatedthrougha

varietyofmeasures.Keystonesproposed

constructionmethods(AppendixG,CMRP)

incorporatemeasurestoreducesoilerosion,

includingtheuseofsedimentbarriers,trenchplugs,

temporaryslopebreakers,drainagechannelsor

ditches,mulching,andinspectionofthesecontrol

methods.Specificadditionalmethodsandmeasures,

suchasthefollowingwouldapplyinareasoffragile

soils(i.e.,wherethesoilexhibitsconditionstypical

oftheNDEQ-identifiedSandHillsRegionandis

verysusceptibletowinderosion):

Useofphotodegradablematting,sedimentlogs,orstrawwattlesratherthanterraces(slopebreakers)insteepslopeorerosion-proneareas;

Useofnativeseedmixes(developedwithlocalNaturalResourceConservationServiceofficesandusedincoordinationwithlandowners);

Useoftrench-lineorblade-widthstrippingprocedureswherepracticabletoreducethewidth

ofdisturbance;and

Minorrouterealignments.

Approximately4,715acresofprimefarmlandsoil

wouldbedirectlyimpactedbyconstructionofthe

proposedpipeline.Toavoidpermanentimpactsto

thesesoils,topsoilinnon-forestedagriculturalareas

wouldberemovedandstockpiledattheedgeofthe

ROWduringexcavationactivitiesandreturned



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followingcompletionofconstructionandsubsurface

soilpreparation.Salvagedepthswouldvaryfrom

4inchesinshallowsoilsto12inchesinhighly

productivesoils.OperationoftheproposedProject

wouldhaveminor,localizedimpactsonsoils.

ES.5.2 Water ResourcesInresponsetopublicscopingcommentsforthe

proposedProject,thedraftSupplementalEIS

includesadetailedassessmentofimpactson

groundwaterandsurfacewater,includingshallow

groundwaterassociatedwiththeOgallalaAquifer

andtheNDEQ-identifiedSandHillsRegion.

ES.5.2.1 Surface WaterTheproposedProjectwouldimpactwaterbodies

acrossthestatesofMontana,SouthDakota,and

Nebraska.TheproposedProjectroutewouldavoid

surfacewaterwheneverpossible;however,the

proposedProjectroutewouldstillcrossapproximately1,073waterbodies,including

56perennialriversandstreams,aswellas

approximately25milesofmappedfloodplains.

Construction Phase

ConstructionoftheproposedProjectcouldresultin

temporaryandpermanentimpactssuchas:

Streamsedimentation;

Changesinstreamchannelmorphology(shape)andstability;

Temporarilyreducedflowinstreams;and

Potentialimpactsassociatedwithspills.

Open-cutmethodswouldbeusedatmostwaterbody

crossings.However,impactstosurfacewaterbodies

wouldbemitigatedthroughvariousmeans.

Horizontaldirectionaldrilling(HDD)wouldbeusedat14majorandsensitivewaterbodycrossings(see

FigureES-6).Waterbodybankswouldberestoredto

preconstructioncontoursortoastableslope.

Seeding,erosioncontrolfabric,andothererosion

controlmeasureswouldbeinstalled,asspecifiedin

theCMRP(AppendixG),andpermitdocuments.

Operations Phase

Surfacewaterimpactsassociatedwithpotential

releasesofcrudeoilandotherhazardousliquidspills

areaddressedlaterinthisExecutiveSummary.Other

potentialimpactsduringtheoperationsphasewould

include:

Channelmigrationorstreambeddegradationthatexposesthepipeline;

Channelincisionthatincreasesbankheightstothepointwhereslopesaredestabilized,ultimatelywideningthestream;and

Sedimentationwithinachannelthattriggerslateralbankerosion,suchastheexpansionofachannelmeander(curve)oppositeapointbar.

Mitigationmeasurestoaddresstheseimpactswould

includethosespecifiedintheCMRP(AppendixG).

Crossingswouldbeatleast5feetbelowthebottomofallwaterbodies,andwouldhaveahorizontal

bufferofatleast15feetfromeitherwaterbodyedge.

Figure ES-6: Cross Section of Horizontal Directional Drilling Method



17/36


WhereanHDDmethodisused,thecrossingdepth

wouldbeupto50feetbelowthestreambed.

Potentialbankprotectionmeasurescouldinclude

installingrock,wood,orothermaterialskeyedinto

thebanktoprovideprotectionfromfurthererosion,

orregradingthebankstoreducethebankslope.

ES.5.2.2 GroundwaterTheprimarysourceofgroundwaterimpactsfromthe

proposedProjectwouldbepotentialreleasesof

petroleumduringpipelineoperationand,toalesser

extent,fromfuelspillsfromequipment.Therisks

andimpactsoftheseeffectsarediscussedlaterinthis

ExecutiveSummary.Anypetroleumreleasesfrom

constructionoroperationcouldpotentiallyimpact

groundwaterwheretheoverlyingsoilsarepermeable

andthedepthtogroundwaterisshallow.TableES-1

summarizestheanticipatedeffectsofpotential

releasesfromtheproposedProjectontheaquifers

andaquifergroupsalongtheproposedProjectroute.

FigureES-7providesaschematicviewofthese

groundwaterresources.

Hydrostatic TestingWaterhydrostatictestingisperformedtoexpose

defectivematerialsorweldsthathavemissedprior

detection,exposepossibleleaks,andserveasafinalvalidationoftheintegrityoftheconstructedsystem.

Waterispumpedintothesealedpipesection,

typicallytoapressuregreaterthatthespecifiedpipe

strength,andthepressurizedsegmentismonitored

forfailure.

Followingthetest,thewaterisremovedfromthe

pipeandreturnedtothenaturalenvironmentor

disposedofinaregulatedfashion.Waterusedfor

hydrostatictestingwouldbeobtainedfromnearby

surfacewaterresources,groundwater,ormunicipal

sources.Approximately50potentialsurfacewater

sourceshavebeenidentifiedalongtheproposedProjectroute.Dischargedwaterwouldbetestedfor

waterqualitypriortoreleasetoensurethatitmeets

applicablewaterqualitystandards.

Table ES-1: Effects of Potential Releases on Aquifers

Aquifer Effects

AlluvialAquifersandNorthernHighPlainsAquifer(NHPAQ),includingtheOgallalaAquifer

AquiferconditionsintheNHPAQintheproposedProjectareaindicatethatshallowgroundwatergenerallydischargestolocalsurfacewaterbodies,andtypicallydoesnotflowdownwardinsignificantamountsorflowhorizontallyoverlongdistances.Analysisofhistoricspillsandgroundwatermodelingindicatethatcontaminantplumesfromalarge-scalereleasethatreachesgroundwaterintheNHPAQandalluvialaquiferscouldbeexpectedtoaffectgroundwaterqualityuptoapproximately1,000feetdowngradientofthereleasesource.ThislocalizedeffectindicatesthatpetroleumreleasesfromtheproposedProjectwouldnotextensivelyaffectwaterqualityinthisaquifergroup.

GreatPlainsAquifer(GPA)

AcrossmostoftheproposedpipelineareawheretheGPAispresent,itisveryunlikelythatanyreleasesfromtheproposedpipelinewouldaffectgroundwaterqualityintheaquifer,becausetheaquiferistypicallydeeplyburiedbeneathyounger,water-bearingsedimentsand/oraquitardunits.TheexceptionisinsouthernNebraska,wheretheaquiferisclosertothesurface.WaterqualityintheGPAcouldbeaffectedbyreleasesinthisarea,butgroundwaterflowpatternsinthevicinityoftheproposedProjectroutemakesucheffectsunlikely.Overall,itisveryunlikelythattheproposedpipelineareawouldaffectwaterqualityintheGPAduetoweakdownwardgradients(downwardgroundwaterflows)intheaquifersoverlyingtheGPA.

WesternInteriorPlainsAquifer

ThedepthtothisaquiferisseveralhundredfeetintheproposedProjectarea;therefore,thereisanextremelylowprobabilitythatapetroleumreleasefromtheproposedProjectwouldaffectwaterqualityinthisaquifer.

NorthernGreatPlainsAquiferSystem(NGPAS)

AswiththeGPA,petroleumreleasesfromtheproposedProjectwouldonlyaffectwaterqualityinportionsoftheNGPASnearthegroundsurface.Inthecaseofalarge-scalerelease,theseimpactswouldtypicallybelimitedtowithinseveralhundredfeetofthereleasesource,andwouldnotaffectgroundwaterwithinareasthatprovidegroundwaterrechargetolargeportionsoftheNGPAS.

ShallowGroundwaterandWaterWells

hereare2,537wellswithin1mileoftheproposedProject,including39publicwatersupplyellsand20privatewellswithin100feetofthepipelineROW.ThevastmajorityofthesewellseinNebraska.Thosewellsthatwereinthevicinitymaybeaffectedbyapetroleumrelease

fromtheproposedProject.

Twar



18/36


Figure ES-7: Schematic Hydrogeologic Cross-Section along Proposed Pipeline Route

ES.5.2.3 FloodplainsTheproposedpipelinewouldcrossmappedand

unmappedfloodplainsinMontana,SouthDakota,andNebraska.Infloodplainareasadjacentto

waterbodycrossings,contourswouldberestoredto

asclosetopreviouslyexistingcontoursaspractical

andthedisturbedareawouldberevegetatedduring

constructionoftheROWinaccordancewiththe

CMRP(AppendixG).Afterconstruction,the

proposedpipelinewouldnotobstructflowsover

designatedfloodplains,andanychangesto

topographywouldbeminimalandthuswouldnot

affectlocalflooddynamicsorfloodelevations.

ES.5.3 Threatened and Endangered Species

ConsultationwiththeU.S.FishandWildlifeService(USFWS)identified13federallyprotectedor

candidatespeciesthatcouldbeimpactedbythe

proposedProject:elevenfederally-listedthreatened

orendangeredspecies,asdefinedunderthe

EndangeredSpeciesAct(ESA),andtwocandidate

speciesforlistingasthreatenedorendangered.In

addition,thisdraftSupplementalEISalsoevaluated

thepotentialProjectimpactsononespeciesunder

considerationforfederalprotectionunderESA.In

consultationwiththeUSFWS,theDepartment

preparedaBiologicalAssessment(BA)toevaluate

theproposedProjectspotentialimpactstofederallyprotectedandcandidatespeciesandtheirfederally

designatedcriticalhabitat(AppendixH).Inaddition,

13state-listedspeciesthatarenotalsofederallylisted

speciesandonespeciesunderconsiderationfor

federalprotectionundertheESAcouldbeimpacted

bytheproposedProject.

Typesofpotentialimpactstothreatenedand

endangeredspeciesinclude:

Habitatloss,alteration,andfragmentation;

Directmortalityduringconstructionandoperation,includingcollisionwithpowerlines;

Indirectmortalityduetostressoravoidanceoffeeding,and/orreducedbreedingsuccessduetoexposuretonoiseand/orincreasedhumanactivity;and

Reducedsurvivalorreproductionduetodecreasedabundanceoffoodorreducedcover.



19/36


Thesubsectionsbelowprovideadditionaldetailon

speciesthatcouldpotentiallybeaffectedbythe

proposedProject,orspeciesthatarefrequenttopics

ofconcernforprojectssimilartoorinthesame

geographicregionastheProject.Monitoringand

mitigationmeasuresthataddresstheseimpactsare

discussedthoroughlyinthedraftSupplementalEIS.

ES.5.3.1 American Burying BeetleOfthe13federallyprotectedorcandidatespecies,the

Americanburyingbeetle(Nicrophorus americanus)

wastheonlyspeciesdeterminedtobepotentially

adverselyaffectedbytheproposedProject.

Figure ES-8: American Burying Beetle

Approximately50milesoftheproposedProject

RouteinNebraskawouldaffectAmericanburying

beetlehabitat;approximately43milesinSouth

Dakotawouldaffectsuitablehabitatforthespecies.

ConsultationbetweentheDepartmentandUSFWSresultedindevelopmentofconservationmeasures

andcompensatorymitigation,suchastrappingand

relocatingbeetles,speciallightingrestrictions(the

beetlesareattractedtolight),andestablishmentofa

habitatconservationtrust.

Evenwiththesemeasures,theproposedProjectcould

affect,andwouldbelikelytoadverselyaffectthe

Americanburyingbeetle,resultinginincidentaltakes

(unintendeddeathofindividualbeetles)during

constructionoroperations.Keystonecontinuesto

workwithUSFWStorefineconservationmeasures

forminimizingincidentaltakeandtoquantifyestimatedincidentaltakeanddevelopmentof

compensatorymitigationthroughtheformal

Section7ESAconsultationprocessfortheAmerican

buryingbeetle.

ES.5.3.2 Whooping CraneThewhoopingcrane(Grus Americana)isfederally

protectedandisalsoprotectedundertheMigratory

BirdTreatyAct.Whoopingcranescouldbeimpacted

bycollisionswithpowerlinesassociatedwiththe

proposedProject.Themajorityoftheproposed

Projectroutecrossesthecentralflywaywhooping

cranemigrationcorridorinSouthDakotaand

Nebraska,andtheRainwaterBasininsouthcentral

Nebraskaprovideswhoopingcranemigrationhabitat.

Withavoidance,minimization,andconservation

measures,suchasfollowingtheWhoopingCrane

SurveyProtocolpreviouslydevelopedbythe

USFWSandNebraskaGameandParksCommission,

theproposedProjectisunlikelytoadverselyaffect

whoopingcranes,basedonthelowlikelihoodofthe

speciesoccurringneartheproposedProjectroute

duringconstructionandoperationsactivitiesand

implementationofUSFWSrecommendedmitigationmeasures.

ES.5.3.3 Greater Sage-GrouseThegreatersage-grouse(Centrocerus urophasianus)

isafederalcandidatespeciesundertheESA,a

BureauofLandManagementsensitivespecies,anda

speciesofconservationconcerninMontanaand

SouthDakota.Approximately190milesofthe

proposedProjectroutewouldcrossareaswithgreater

sage-grousehabitatinMontana,ofwhich94miles

areclassifiedasmoderatetohigh-qualityhabitatfor

greatersage-grouse.

Figure ES-9: Greater Sage-Grouse



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Themostsubstantialpotentialeffectsoftheproposed

Projectonthegreatersagegrousewouldbe

disturbanceofhabitat,includingsagebrush,which

cantakeupto20yearstoregenerateto

pre-constructioncoverlevels,anddisturbanceof

matingandbreedingbehavior.

TheBA(AppendixH)andgreatersage-grousemitigationplansforMontanaandSouthDakota

describeconservationmeasuresthatKeystonewould

implementtoaddresspotentialimpacts.After

implementationofthesemeasures,theproposed

Projectwouldnotlikelyaffectgreatersage-grouse

matingbehavior,andwouldlikelyresultinalow

impactonnestinggreatersage-grouse.Construction

wouldlikelyresultinanincrementallossof

sagebrushhabitat.

ES.5.3.4 Western Prairie Fringed Orchid

Thewesternprairiefringedorchid(Platantheraleucophaea)isfederallylistedasthreatened,state-

listedasthreatenedinNebraska,andisaspeciesof

conservationconcerninSouthDakota.Theproposed

Projectwouldpassnearknownpopulationsof

westernprairiefringedorchidinNebraska,and

throughlandwheretheorchidmaypotentiallyoccur

inSouthDakota.Clearingandgradingofland

associatedwithconstructionoftheproposedProject

(includingpipelineandancillaryfacilities)may

potentiallydisturbwesternprairiefringedorchids,

andmayintroduceorexpandinvasivespeciesthat

alreadycontributetotheorchidsdecline.

Figure ES-10: Western Prairie Fringed Orchid

Keystonewouldimplementconservationmeasures

includedintheBA(AppendixH)andwouldavoid

knownwesternprairiefringedorchidpopulations;

therefore,theproposedProjectwouldnotbelikelyto

adverselyaffectthewesternprairiefringedorchid.

ES.5.3.5 Small White Ladys SlipperThesmallwhiteladysslipper(Cypripedium

candidum),atypeofperennialorchid,isathreatened

speciesunderNebraskastatelaw.Thisspeciesmay

potentiallyoccurwithinsuitablehabitatalongthe

proposedProjectrouteinNebraska.Ifthisplantwere

tobeobservedwithintheproposedProjectroutein

Nebraska,appropriatemitigationmeasureswouldbe

developedandimplementedinconsultationwithstate

agencies.

ES.5.4 Socioeconomics and Environmental

Justice

ThedraftSupplementalEISupdatestheeconomicdatacontainedintheFinalEISandre-evaluatesthe

economicimpactsoftheproposedProject.In

particular,andinresponsetopubliccomments,the

draftSupplementalEISaddresseslocaleconomic

impactsandEnvironmentalJustice.

ES.5.4.1 Tribal ConsultationGovernment-to-governmentconsultationisunderway

forthecurrentSupplementalEISprocessforthe

proposedProject,andtribalmeetingswereheldin

October2012inMontana,SouthDakota,and

Nebraska.Astheleadfederalagencyforthe

proposedProject,theDepartmentiscontinuing

throughouttheSupplementalEISprocesstoengage

inconsultationontheSupplementalEIS,the

proposedProjectgenerally,andonculturalresources

consistentwithSection106oftheNationalHistoric

PreservationActof1986withidentifiedconsulting

parties,includingfederalagencies,stateagencies,

StateHistoricPreservationOffices,theAdvisory

CouncilonHistoricPreservation,andinterested

federallyrecognizedNativeAmericantribesinthe

vicinityoftheproposedProject.

ES.5.4.2 SocioeconomicsConstruction

ConstructionoftheproposedProjectwouldgenerate

temporary,positivesocioeconomicimpactsasa

resultoflocalemployment,taxes,spendingby

constructionworkers,andspendingonconstruction

goodsandservices.Includingdirect,indirect,and

inducedeffects,theproposedProjectwould

potentiallysupportapproximately42,100average



21/36


annualjobsacrosstheUnitedStatesovera1- to2-

yearconstructionperiod(ofwhich,approximately

3,900wouldbedirectlyemployedinconstruction

activities).Thisemploymentwouldpotentially

translatetoapproximately$2.05billioninearnings.

Directexpendituressuchasconstructionand

materialscosts(includingconstructioncamps)wouldtotalapproximately$3.3billion.Short-termrevenues

fromsourcessuchassalesandusetaxeswouldtotal

approximately$65millioninstatesthatlevysucha

tax.Yieldsfromfuelandothertaxescouldnotbe

calculated,butwouldprovidesomeadditional

economicbenefittohostcountiesandstates.

TheproposedProjectareadoesnothavesufficient

temporaryhousingfortheanticipatedconstruction

workforce.Keystoneproposestomeetthehousing

needthroughacombinationoflocalhousingand

eightconstructioncamps.Propertytaxesonthese

campswouldpotentiallygeneratetheequivalentofonefullyearofpropertytaxrevenueforsevenhost

counties,totalingapproximately$2million.

Otherconstruction-phasesocioeconomicimpacts

wouldincludeminorincreasesindemandforutilities

andpublicservices(suchaspolice,fire,and

emergencymedicalservices),andtemporarytraffic

delaysatpublicroadcrossings.Theconstruction

campswouldprovideutilitiesandotherservicesfor

workers,reducingdemandsonexistingcommunities.

Operations Phase

Generally,thelargesteconomicimpactsofpipelines

occurduringconstructionratherthanoperations.

Onceinplace,thelaborrequirementsforpipeline

operationsarerelativelyminor.Operationofthe

proposedProjectwouldgenerate35permanentand

15temporaryjobs,primarilyforroutineinspections,

maintenance,andrepairs.Basedonthisestimate,

routineoperationoftheproposedPipelinewould

havenegligiblesocioeconomicimpacts.

ES.5.4.3 Environmental JusticeAsdefinedbytheU.S.EnvironmentalProtection

Agency,EnvironmentalJusticereferstothefair

treatmentandmeaningfulinvolvementofallpeopleregardlessofrace,color,nationalorigin,orincome

withrespecttothedevelopment,implementation,and

enforcementofenvironmentallaws,regulations,and

policies.ExecutiveOrder12898furtherdirects

federalagenciestoidentifyandaddress,as

appropriate,disproportionatelyhighandadverse

healthorenvironmentaleffectsoftheirprograms,

policies,andactivitiesonminoritypopulationsand

low-incomepopulations,specificallyaspartofa

NEPAprocess.Withinthesocioeconomicanalysis

area,16blockgroupscontainminoritypopulations

thatweremeaningfullygreaterthanthesurrounding

stateorcounty(referenceareas),andfivecensus

tractshadlargerlow-incomepopulationsthantheir

respectivereferenceareas.Fouroftheseareascontainedbothtypesofmeaningfullygreater

populations.

Impactstominorityandlow-incomepopulations

duringconstructionmayincludeexposureto

constructiondustandnoise,disruptiontotraffic

patterns,andincreasedcompetitionformedicalor

healthservicesinunderservedpopulations.Such

impactswouldgenerallybesmallandshort-term.

TypicaloperationoftheproposedProjectisunlikely

todisproportionatelyadverselyimpactthe

EnvironmentalJusticepopulationsdiscussedinthis

section.Becausetheriskofapotentialreleaseisroughlyequalatallpointsalongthepipeline,the

risksassociatedwithsuchreleaseswouldnotbe

disproportionatelybornebyminorityorlow-income

populations.

ES.5.5 Greenhouse Gas Emissions andClimate Change

ThedraftSupplementalEISevaluatestheGHG

emissionsassociatedwiththeproposedProjectfrom

severaldistinctperspectives.Theconstructionand

operationoftheproposedProjectanditsconnected

actions(thepipeline,pumpstations,electrical

transmissionlines,etc.)wouldgenerateGHG

emissions.Inaddition,concernshavebeenraisedthat

extractingthecrudeoilthatwouldbetransportedby

theproposedProjectproducesmoreGHGemissions

comparedtoothertypesofcrudeoil.Finally,climate

changeconsiderationswhichareinfluencedby

GHGemissionscouldaffecttheconstructionand

operationoftheproposedProject.GHGandclimate

changeissueswerethesubjectofmanycomments

receivedduringthepublicscopingprocessforthe

proposedProject.

ES.5.5.1 Greenhouse Gas EmissionsConstructionandoperationoftheproposedProjectwouldgenerateGHGemissionsfromseveralsources

oractivities,asdescribedbelow.



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Construction-Phase Sources

ClearingoflandintheproposedROWviaopenburning;

Electricityusageandemergencygeneratorsatconstructioncamps;and

Constructionvehicles,workertransports,andothermobilesources.

Operations-Phase Sources

Fugitivemethaneemissionsatconnections;

Maintenancevehicles(twoormoretimesperyear);

Aircraftusedforaerialinspection(biweekly);and

Electricalgenerationforpumpstationpower.

Duringtheconstructionperiod,GHGemissionsfrom

thesesourcesandactivitieswouldbeapproximately240,423metrictonsofcarbondioxideequivalents

(CO2e).Emissionsduringoperationoftheproposed

Projectwouldbeapproximately3.19millionmetric

tonsofCO2eperyear,almostentirelydueto

electricalgenerationneededtopowertheproposed

Projectspumpstations.

TheannualCO2eemissionsfromtheproposed

ProjectisequivalenttoCO2eemissionsfrom

approximately626,000passengervehiclesoperating

foroneyearor398,000homesusingelectricityfor

oneyear.

ES.5.5.2 Life Cycle AnalysisCombustionoffossilfuels,includingpetroleum-

basedproductssuchascrudeoil,isamajorsourceof

globalGHGemissions,whichcontributetohuman-

inducedclimatechange.WCSBcrudesaremore

GHG-intensivethantheotherheavycrudesthey

wouldreplaceordisplaceinU.S.refineries,andemit

anestimated17percentmoreGHGsonalife-cycle

basisthantheaveragebarrelofcrudeoilrefinedin

theUnitedStatesin2005.IftheproposedProject

weretoinducegrowthintherateofextractioninthe

oilsands,thenitcouldcauseGHGemissionsgreater

thanjustitsdirectemissions.

BasedoninformationandanalysisabouttheNorth

Americancrudetransportinfrastructure(particularly

theprovenabilityofrailtotransportsubstantial

quantitiesofcrudeoilprofitablyundercurrentmarket

conditions,andtoaddcapacityrelativelyrapidly)and

theglobalcrudeoilmarket,thedraftSupplemental

EISconcludesthatapprovalordenialoftheproposed

Projectisunlikelytohaveasubstantialimpactonthe

rateofdevelopmentintheoilsands,orontheamount

ofheavycrudeoilrefinedintheGulfCoastarea.

Asdiscussedinthemarketanalysis,iftheproposedProject were denied but other proposed new andexpanded pipelines go forward, production could

decreasebyapproximately0.4to0.6percentoftotalWCSB productionby2030. Ifall pipelinecapacitywere restricted, oil sands production could decreasebyapproximately2to4percentby2030.

Theincrementalindirectlife-cycleemissions

associatedwiththosedecreasesinoilsands

productionareestimatedtobeintherangeof0.07to

0.83millionmetrictonsCO2equivalent(MMTCO2e)

annuallyiftheproposedProjectwerenotbuilt,andin

therangeof0.35to5.3MMTCO2eannuallyifall

pipelineprojectsweredenied.

AsWCSBandBakkencrudesreplacecrudesfrom

othersourcesindependentofwhethertheproposedProjectexiststhelife-cycleGHGemissions

associatedwithtransportationfuelsproducedinU.S.

refinerieswouldlikelyincrease.TheGHGintensity

ofreferencecrudesmayalsoincreaseinthefutureas

moreoftheworldcrudesupplyrequiresextractionby

increasinglyenergy-intensivetechniques,suchas

thoseusedtoextractoil-sandscrude,although

regulatorypressuresandtechnologicaladvances

couldcounterthistrend.

ES.5.5.3 Climate Change Effects on the

ProjectChangesinclimatehavebeenobservedbothgloballyandwithintheproposedProjectstudyareaoverthe

pastcentury.Thesechangesincludedirecteffects,

suchasincreasesanddecreasesintemperatureand

precipitation,andindirecteffects,suchasincreasesin

freeze-thawcycles,increasedoccurrencesofflooding

anddrought,andwinderosionofsoil,andresultant

changestothenaturalenvironment,suchas

vegetationchanges.

AspartofthepreparationofthisdraftSupplemental

EIS,ananalysiswasperformedtoevaluatethe

potentialimpactsofclimatechangeontheproposed

Projectconstructionandoperations.Usingfuture

climatescenariosdevelopedbythe

IntergovernmentalPanelonClimateChangeand

peer-revieweddownscaledmodels,thedraft

SupplementalEISevaluatestherangeofimpactsthat

climatechangecouldhaveontheproposedProject.



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AssumingconstructionoftheproposedProject

beginsasplannedin2015,climateconditionsduring

the1- to2-yearconstructionperiodwouldnotdiffer

substantiallyfromcurrentconditions.Duringthe

operationsperiod,climatechangeprojectionssuggest

thefollowingchanges:

Warmerwintertemperatures;

Ashortercoolseason;

Alongerdurationoffrost-freeperiods;

Morefreeze-thawcyclesperyear(whichcouldleadtoanincreasednumberofepisodesofsoilcontractionandexpansion);

Warmersummertemperatures;

Increasednumberofhotdaysandconsecutivehotdays;and

Longersummers(whichcouldleadtoimpactsassociatedwithheatstressandwildfirerisks).

Thepipelinewouldbeburieddeepenoughtoavoid

surfaceimpactsofclimatechanges(freeze-thaw

cycles,fires,andtemperatureextremes).

ES.5.6 Potential ReleasesThetermsrelease,leak,andspillareused

throughoutthissection.Thesearedistinctterms.A

releaseisalossofintegrityofapipeline(including

themainlineandothercomponents);aleakisa

releaseovertime;andaspillistheliquidvolumeofa

leakthatescapesanycontainmentsystemandenters

theenvironment.Thissectiondescribestherelease

andspillanalysesincludedinthedraftSupplemental

EIS,includingpotentialimpactsonwaterbodiesand

mitigationmeasures,asidentifiedinpublicscoping

comments.

ES.5.6.1 Spill ScenariosThePotentialReleasessectionofthedraft

SupplementalEISaddressestherisksandpotential

impactsofcrudeoilreleasesandspillsduring

constructionandoperationoftheproposedProject.

Thisriskassessmentaddressesboththepotential

frequencyofoperationalpipelinereleasesandthe

potentialcrudeoilspillvolumesassociatedwiththe

releases,usingthreehypotheticalspillvolumesto

representtherangeofreportedspillsinthePipeline

andHazardousMaterialsSafetyAdministration

(PHMSA)database.Thesespillvolumesandthe

probabilitiesofsuchvolumesareshowninTableES-2.Screening-level(i.e.,general)modelswere

usedtoestimatethedistanceoilcouldmoveover

landormigrateingroundwater.

TableES-3summarizeshazardousliquidpipeline

incidentsreportedtoPHMSAfromJanuary2002

throughJuly2012andshowsthebreakdownof

incidentsbypipelinecomponent.FigureES-11

summarizesthespillscenariosreportedtoPHMSA,

bypipelineelements.

Table ES-2: Spill Scenarios Evaluated in Draft Supplemental EIS

Spill Volume Scenario Frequencya

Small:Lessthan50barrels(bbl)(2,100gallons) 79%

Medium:501,000bbl(2,10042,000gallons) 17%

Large:1,00020,000bbl(42,000840,000gallons) 4%aIndicatestheshareofallreleasesreportedinthePHMSAdatabasethatfiteachspillvolumescenario.

Table ES-3: Summary of PHMSA Database Incidents (January 2002 to July 2012)

Incident Category Incidents Incident Sub-Category Incidents

Crudeoilpipeline 1,692

Crudeoilmainlinepipeincidents 321

Crudeoilpipeline,equipmentincidents(notmainlinepipe) 1,027

Crudeoilpipelinesystem,unspecifiedelements 344

Crudeoilmainlinepipe

321

16-inchorgreaterdiameter 71

8-inchor15-inchdiameter 154

Lessthan8-inchdiameter 52

Diameternotprovided 44

Crudeoilpipeline,equipment(notmainlinepipe)

1,027

Tanks 93

Valves 25

Otherdiscreteelements(pumps,fittings,etc.) 909



24/36


79%

56%

38%

51%

89%

81%

17%

35%

36%

30%

11%

16%

4%

9%

26%

17%

3%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Pipeline, All Elements

Mainline Pipe

Mainline Pipe, Diameter 16"+

Pipeline System, Tanks

Pipeline System, Mainline Valves

Pipeline System, Other Discrete Elements

0 50 bbl 50 1,000 bbl 1,000 20,000 bbl

Spill Scenarios

Source:PHMSAHazardousLiquidPipelineIncidentData20022012,andPHMSALiquidAnnualPipelineData.20042011

Figure ES-11: Spill Volume Distribution by Pipeline Component

ES.5.6.2 Oil Movement

Small and Medium Spills

Thepotentialimpactsfromsmallleaksofoilwould

typicallybeconfinedtosoilimmediatelysurrounding

theleak,andwouldhavelittleeffectonnearby

naturalresources.Thesetypesofspillswouldgenerallybedetectedbymaintenanceoroperations

personnelandaddressedthroughrepairoftheleak

andremovalandremediationofimpactedsoil.A

slowsubsurfaceleak,characterizedasaslowdrip

(e.g.,gallonsperyearasopposedtogallonsper

minute),wouldinfiltrateintosoilandcould

potentiallyreachagroundwaterresource.Ifthespill

rateisfasterthanthesoilcanabsorb,theoilmay

surfaceandpotentiallyflowawayfromtherelease

site,affectingnearbyvegetationorotherresources.

Withmediumspills,areleasecanoccurasa

subsurfaceorsurfaceeventdependinguponthecause.Similartoasmallspill,aslowsubsurface

releasecouldpotentiallyreachagroundwater

resource,andiftherateofthespillisfasterthanthe

soilcanabsorb,theoilmaysurface.Oncethe

migratingoilleavesthereleasesite,impactstosoil,

vegetation,andsurfacewateralongtheflowpath

mightoccur.Dependingonhowquicklyitis

remediated,someofthisvolumeofmaterialmight

tendtopoolinlowareasandpotentiallyinfiltrate

backintothesoilandtogroundwaterdependingon

thedepthtogroundwater.Potentialbehaviorin

shallowgroundwateristhesameassmallspillsthat

reachgroundwater;thespillcouldmigrateawayfrom

thereleasesite.Becauseoftheincreasedvolumeof

oilreleasedfromthepipelinewhencomparedtoa

smallrelease,itisalsopossiblethatoilcouldpoolon

groundwater.

Large Spills

Withalargespill,themajorityofthespillvolume

wouldmigrateawayfromthereleasesite.The

potentialimpactsfromalargespillwouldbesimilar

totheimpactsfromthemedium-sizedspill,butona

muchlargerscale.Oncethespillreachesthesurface,

theoilwouldflowfollowingtopographicgradientor

lows(e.g.,gullies,roadsidedrainageditches,

culverts,andstormsewers)andeventuallytosurface

waterfeatures.Ifthereleaseentersflowingwaterorothersurfacewaterfeature,theextentoftherelease

couldbecomeverylarge,potentiallyaffectingsoil

andvegetationalongmilesofriverandshoreline.

Sinkingoilcanbedepositedinriverorstream

bottomsandbecomeacontinualsourceofoilas

changingwaterflowsreleasethedepositedoil.



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ES.5.6.3 MitigationKeystonehasagreedtoincorporate57Special

ConditionsdevelopedbyPHMSAintotheproposed

Projectandinitsmanualforoperations,maintenance,

andemergencies.ThemajorityoftheSpecial

Conditionsrelatetoreductioninthelikelihoodofa

releaseoccurring.Someprovidemitigationthatreducestheconsequencesandimpactofaspill,

shouldsuchaneventoccur.Examplesofthetypesof

SpecialConditionsthatPHMSAdevelopedtoreduce

theriskofareleaseinclude,amongothers,measures

thatwouldbetterpreventcorrosion,stresscracking,

equipmentmalfunctions,third-partydamage,and

operatorerror.

ES.5.7 Cumulative EffectsThecumulativeeffectsanalysisevaluatestheway

thattheproposedProjectsimpactsinteractwiththe

impactofotherpast,present,andreasonably

foreseeablefutureactionsorprojects.Thegoalofthecumulativeimpactsanalysisistoidentifysituations

wheresetsofcomparativelysmallindividualimpacts,

takentogether,constitutealargercollectiveimpact.

FortheproposedProject,thedraftSupplementalEIS

identifiesactionsorprojectswiththepotentialfor

cumulativeimpacts.Thecumulativeeffectsanalysis

providesdetailedevaluationoftheeffectsofthese

projectswhencombinedwiththeproposedProject,

includingimpactsonresourceswithintheUnited

States,lifecycleGHGemissionsofWCSBactivities,

andimpactsonresourcesinCanada.

ES.5.8 Environmental Impacts in CanadaInadditiontotheenvironmentalanalysisofthe

proposedProjectintheUnitedStates,theDepartment

monitoredandobtainedinformationfromthe

environmentalanalysisoftheCanadianportionofthe

Project.TheCanadiangovernmentconductedan

environmentalreviewoftheportionoftheproposed

ProjectinCanada.TheDepartmentdidnotconduct

anassessmentofthepotentialimpactsofthe

CanadianportionoftheproposedProject.However,

theDepartmenthasincludedinformationfromthe

Canadiangovernmentsassessmentinthisdraft

SupplementalEIS.

TheCanadianenvironmentalanalysisprocessbegan

inJuly2008andinvolvedanenvironmental

assessmentprocesspursuanttotheCanadian

EnvironmentalAssessmentAct.OnMarch11,2010,

theCanadianNationalEnergyBoard(NEB)issued

itsReasonsforDecisiongrantingKeystones

application.TheNEBsReasonsforDecision

includedanEnvironmentalScreeningReportthat

waspreparedtomeettherequirementsofCanadian

EnvironmentalAssessmentActfortheCanadian

portionoftheproposedProject.

TheEnvironmentalScreeningReportconcludedthat,

withincorporationofKeystonesproposedmeasures

toavoidorminimizeimpactsandwithKeystonesacceptanceoftheNEBsregulatoryrequirementsand

recommendedconditions,implementationofthe

proposedProjectinCanadawouldnotlikelyresultin

significantadverseenvironmentaleffects.Forthe

Canadianportionofthepipeline,constructionbegan

ontheHardistyBTerminalinSeptember2010,and

HDDcrossingsoftheRedDeerandSouth

Saskatchewanriverswerecompletedinearly2012.

Analysisandmitigationofenvironmentalimpactsin

CanadaareongoingbyCanadianofficials.For

example,onSeptember1,2012,theGovernmentof

AlbertasdevelopmentplanfortheLowerAthabascanoilsandsregionbecameeffective.The

planwouldrequirecancellationofabouttenoilsands

leases,setasidenearly20,000squarekilometers

(7,700squaremiles)forconservation,andsetnew

environmentalstandardsfortheregioninaneffortto

protectsensitivehabitat,wildlife,andforestland.

ES.6 ALTERNATIVESThedraftSupplementalEISconsidersthreebroad

categoriesofalternativestotheproposedProject,

consistentwithNEPArequirements:

NoActionAlternativewhichaddressespotentialmarketresponsesthatcouldresultifthePresidentialPermitisdeniedortheproposedProjectisnototherwiseimplemented;

MajorRouteAlternativeswhichincludesotherpotentialpipelineroutesfortransportingWCSBandBakkencrudeoiltoSteeleCity,Nebraska;and

OtherAlternativeswhichincludeminorroutevariations,alternativepipelinedesigns,andalternativesitesforabovegroundfacilities.

ES.6.1 Scenario ScreeningSeveralalternativesexistforthetransportofWCSB

andBakkencrudeoiltoGulfCoastrefineries,

includingmanythatwerenotcarriedforwardfor

detailedanalysis.ThedraftSupplementalEIS

providesamoredetaileddescriptionofthecategories

ofalternatives,thealternativescreeningprocess,and

thedetailedalternativesidentifiedforevaluationin

thedraftSupplementalEIS.



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PotentialNoActionAlternativescenarioswere

screenedbasedontechnicalandeconomicfeasibility,

suchasimplementationtimeframeandcrudeoil

transportcapacity,aswellasthepotentialtoprovide

acostadvantage(comparedtootherNoAction

Alternativescenarios).Asexplainedindetailinthe

draftSupplementalEIS,NoActionAlternativescenariosexcludedfromfurtheranalysisare:

RailorPipelinetoVancouver,BritishColumbia,andTankertoGulfCoast;

RailDirectlytoGulfCoast;

RailtoWoodRiver,Illinois;BargetoGulfCoastviaMississippiRiver;

BitumenbyRail;and

CanadianPipelineScenario(ExistingPipelines).

Theprimarypurposeofmajorroutealternativesisto

identifyaroutethatavoidstheNDEQ-identifiedSandHillsRegionwithoutanunacceptableincrease

inotherenvironmentalimpacts.Althoughthe

KeystoneXL2011SteeleCitySegmentAlternative

traversestheNDEQ-identifiedSandHillsRegion,the

draftSupplementalEISevaluatestheimpactsof

constructingthatrouteasacomparisonagainstwhich

otherroutealternatives,includingtheproposed

Project,canbemade.Theinitial(PhaseI)screening

ofothermajorroutealternativesconsideredthe

followingcriteria:

ProjectPurposetobeconsideredreasonable,

analternativemustprovidereliabletransportofupto730,000bpdofWCSBcrudeoilandupto100,000bpdofBakkencrudeoiltoCushing,Oklahoma(theintermediatedestinationofcrudeoilintheproposedProject)orGulfCoastrefineries(theultimatedestinationofthatcrudeoil);and

PipelineLengthpipelinelengthwasconsideredarelativemeasureofreliability,environmentalimpact,andconstruction/operationalcosts.

ThePhaseIIscreeningusedadesktopdatareviewof

keyenvironmentalandotherfeatures(e.g.,wetlands

andwaterbodiescrossed,totalacreageaffected).

Majorroutealternativesexcludedfromfurtheranalysisare:

WesternAlternative(toCushing);

Express-PlatteAlternative;

SteeleCitySegment-A1AAlternative;

KeystoneCorridorOption1;and

KeystoneCorridorOption2.

ES.6.2 Market AnalysisThissectionintheSupplementalEISexaminesthe

changesinpetroleummarketssincethepublicationof

theFinalEISonAugust26,2011.Itassesseswhether

thesechangesaltertheconclusionofthe2011Final

EISmarketanalysis,namely,thattheproposed

Projectisunlikelytosignificantlyaffecttherateof

extractionintheoilsandsorinU.S.refining

activities.Specifically,thesectionpresentschanges

observedinthepetroleummarketsinceAugust2011

andhowsuchchangesmayimpacttheassessment

madeintheFinalEIS.Theanalysisisbased,inpart,

onthefollowingconsiderations.

Severalchangesintheoutlookforthecrudeoil

marketsinceAugust2011haveoccurredandare

accountedforintheSupplementalEISanalysis.First,theoutlookforU.S.demandfortransportationfuelis

nowlowerthanitwasin2010and2011.Second,

domesticproductionofcrudeoilhasincreasedandis

expectedtocontinueincreasingoverthenext10to

15years.Third,theinfrastructureforcrudeoil

transportationinNorthAmerica,includingpipeline,

rail,andothernon-pipelinemodes,isundergoing

significantadaptationsandincreasesincapacity.

WhiletheincreaseinU.S.productionofcrudeoil

andthereducedU.S.demandfortransportationfuels

willlikelyreducethedemandfortotalU.S.crudeoil

imports,itisunlikelytoreducedemandforheavysourcrudeatGulfCoastrefineries.Additionally,as

wasprojectedinthe2011FinalEIS,themidstream

industryisshowingitiscapableofdeveloping

alternativecapacitytomoveWCSB(andBakkenand

Midcontinent)crudestomarketsintheeventthe

proposedProjectisnotbuilt.Specifically,itis

movingtodevelopalternativepipelinecapacitythat

wouldsupportWesternCanadian,Bakken,and

MidcontinentcrudeoilmovementstotheGulfCoast

andisincreasinglyusingrailtotransportlarge

volumesofcrudeoiltoEast,West,andGulfCoast

marketsasaviablealternativetopipelines.In

addition,projectedcrudeoilpricesaresufficienttosupportproductionofessentiallyallWestern

Canadiancrudeoilprojects(andU.S.tightoil

projects,suchasthoseintheBakkenshale),even

withpotentiallysomewhatmoreexpensivetransport

optionstomarketintheformofalternativepipelines

andrail.Railandsupportingnon-pipelinemodes

shouldbecapable,aswasprojectedin2011,of

providingthecapacityneededtotransportall



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incrementalWesternCanadianandBakkencrudeoil

productiontomarketsiftherewerenoadditional

pipelineprojectsapproved.

Approvalordenialofanyonecrudeoiltransport

project,includingtheproposedProject,remains

unlikelytosignificantlyimpacttherateofextraction

intheoilsands,orthecontinueddemandforheavycrudeoilatrefineriesintheU.S.Limitationson

pipelinetransportwouldforcemorecrudeoiltobe

transportedviaothermodesoftransportation,suchas

rail,whichwouldprobably(butnotcertainly)be

moreexpensive.Longertermlimitationsalsodepend

uponwhetherpipelineprojectsthatarelocated

exclusivelyinCanadaproceed(suchastheproposed

NorthernGateway,theTransMountainexpansion,

andtheTransCanadaproposaltoshipcrudeoileast

toOntarioonaconvertednaturalgaspipeline).

Ifallsuchpipelinecapacitywererestrictedinthe

medium-to-long-term,theincrementalincreaseincostofthenon-pipelinetransportoptionscouldresult

inadecreaseinproductionfromtheoilsands,

perhaps90,000to210,000bpd(approximately2to

4percent)by2030.IftheproposedProjectwere

deniedbutotherproposednewandexpanded

pipelinesgoforward,theincrementaldecreasein

productioncouldbeapproximately20,000to30,000

bpd(from0.4to0.6percentoftotalWCSB

production)by2030.

Fundamentalchangestotheworldcrudeoilmarket,

and/ormorefarreachingactionsthanareevaluatedin

thisSupplementalEISwouldberequiredto

significantlyimpacttherateofproductionintheoil

sands.Inlightoftheadditionalanalysisperformed,

asexplainedintheSupplementalEIS,thesechanges

arenotanticipatedtoaltertheoutlookforthecrude

oilmarketinamannerthatwouldleadtoachangein

thekeyconclusionsreachedinthe2011FinalEIS.

ES.6.3 No Action AlternativeTheNoActionAlternativeincludesanevaluationof

multiplescenariosthatdescribepotentialoutcomesif

theDepartmentwastodenythePresidentialPermit

fortheproposedProject,orifitwasotherwisenot

constructed.Basedonavailableinformationand

independentanalysisdiscussedatgreaterlengthin

thedraftSupplementalEIS,underaNoAction

StatusQuoAlternative,productionand

transportationofWCSBandBakkencrudeoilwould

remainunchanged.Thisscenarioservesasa

benchmarkagainstwhichotheralternativesare

evaluated,althoughmarketforceswouldprecludethisscenariofromoccurring.

GiventhatproductionofWCSBandBakkencrude

oilwillproceedwithorwithouttheproposedProject,

thedenialofaPresidentialPermitwouldlikelyresult

inactionsbyotherfirmsintheUnitedStates(and

global)petroleummarket,suchasuseofalternative

modestotransportWCSBandBakkencrudeoil.

TableES-4comparessomeofthekeycharacteristics

ofthenon-StatusQuoscenariosunderthis

AlternativetotheproposedProject.Theindividual

scenariosaredescribedbelow.

Table ES-4: Summary of No Action Alternative Scenarios

Characteristics

Proposed

Project

Rail and

Pipeline Rail and Vessela

NewAcreageRequired(permanenteasement) 5,303 7,727 9,427

AverageAnnualU.S.EmploymentDuringConstruction

3,900 2,400 0

ConstructionPeriod 1-2 about2 about2

Permanent(Operations)U.S.Employment 35 65 0

a

IntheRailandVesselscenario,characteristicsofthemarineterminalinKitimatarebasedonthecapitalcostsandemploymentestimatesfortheEnbridgeNorthernGatewaymarineterminal.Informationisavailableathttp://gatewaypanel.review-examen.gc.ca/clf-nsi/dcmnt/pplctn-eng.html

http://gatewaypanel.review-examen.gc.ca/clf-nsi/dcmnt/pplctn-eng.htmlhttp://gatewaypanel.review-examen.gc.ca/clf-nsi/dcmnt/pplctn-eng.html


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ES.6.3.1 Rail and Pipeline ScenarioUnderthisscenario,WCSBandBakkencrudeoil(in

theformofdilbitorsynbit)wouldbeshippedvia

railroadtoStroud,Oklahoma,whereitwouldbe

loadedintoexistingandexpandedpipelines

approximately17milestoCushing,Oklahoma,wherethecrudeoilwouldentertheexisting

Keystonepipelinesystem.

Thisscenariowouldrequiretheconstructionofseven

newrailloadingterminalsinLloydminster,

Saskatchewan(thepossibleloadingpointforWCSB

crudeoil),oneinEpping,NorthDakota(thepossible

loadingpointforBakkencrudeoil),andsevenin

Stroud(seeFigureES-12).Eachnewterminalwould

requireapproximately500acresofland,aswellas

newtrack,pipelines,andstoragetanks.

AssumingshipmentviaClassI(major)railroadssuch

astheCanadianPacificRailwaySystem(CPRS),

CanadianNational,BNSFRailwa