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Write to the State Department- Day 7

The State Department (DOS) will soon make a National Interest Determinationwhether or not to approve the TransCanadas Keystone XL pipeline application.The DOSFinal Supplementary Environmental Impact Statement(FSEIS) claimsthe rate of extraction of the Alberta tarsands will be insignificantly affectedwhether or not the Keystone XL or any other pipeline is construction.

Section 1.4 Market Analysis verbiage in the FSEIS wreaks of a K Street MBAfor hire Corporate Strategy Consultants highfalutin and obfuscating lingo.

From Section 1.4 Market Analysis 1.4.1.3 Summary of Analysis (page 1.4-8):

(Beginning 1972, my second job following two years doing computer simulations

of Prudhoe Bay Reservoir for ExxonMobil, then Humble Oil & Refining Co., wasas the first Corporate Planner at a Fortune 500 ocean transportation companytransitioning from breakbulk to containerization. Having studied IndustrialEngineering/Operations Research and Petroleum Engineering at the Universityof California (Berkeley) I yearned for a birds-eye-view of the Corporate worldand found my ideal niche as understudy for a tough but moral Naval Architectmentor who taught me to speak the language of the Board of Directors in mylate 30s. Frankly, I am an engineer/scientist at heartI enjoyed analysis andthe search for truth more than the glossy packaged presentations.)

Rex & Barack: Retire Refineries. Replace Refineries with Renewables.

February 9, 2014

http://bit.ly/WriteStatehttp://bit.ly/WriteStatehttp://bit.ly/WriteStatehttp://bit.ly/WriteState

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One thing I would never do as a young Corporate Planner is leave unresolvedphrases like higher transportation costs could have a substantial impact on oilsands production levels without some explanation as to why such a commentplays no role in the conclusion. Sinful is the poignant phrase that immediatelyfollows: ... possibly in excess of the capacity of the proposed Project.

I wonder what the authors, editors and managers had in mind with this:

As a result, the price threshold above which pipeline constraints are likelyto have a limited impact on future production levels could change if supplycosts or production expectations prove different than estimated in thisanalysis.

Do they expect us to believe the conclusions with this hanging out there?

The coup de grce of this section: Oil sands production and investmentcould slow or accelerate depending on oil price trends, regulations, and

technological developments, but the potential effects of those factors onthe industrys rate of expansion should not be conflated with the morelimited effects of individual pipelines. Nowhere is this claim substantiated.

This wreaks of pure sales promotionnot objective and transparent analysisconstructed to prove a priori that the pipeline and production are not linked.

Section 1.4 Market Analysis 1.4.5.4 Implications for Production, beginning atpage 1.4-131 presents the same unsubstantiated speculations and circulararguments:

Rex & Barack: Retire Refineries. Replace Refineries with Renewables.

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Continuing on page 1.4-132:

What are the assumptions built into the model that generate this conclusion?

Model results indicate that if additional pipelines to Canadas WestCoast are constructed, they would most likely be utilized regardless ofthe availability of cross-border pipelines due to the economicattractiveness of the relatively short seaborne shipping distances from

Canadian export terminals to refineries in Asia.One fundamental requirement I learned in 1972 was to state my assumptions.We have no way to judge whether the assumptions used here are valid.

Continuing on page 1.4-133:

Rex & Barack: Retire Refineries. Replace Refineries with Renewables.

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What is the basis for this conclusion and how does it play in the argument?

Consequently, imposing a constraint exclusively on future cross-borderpipeline capacity does not cause a significant reduction in the modeledprices of oil sands blends or the returns to oil sands producers.

The assumptions implied by the statements in the very long paragraph aboveare speculative, tenuous, and pipe dreams at best. Hinging conclusions on ahouse of cards is not my idea of professional and objective work.

Transparency dictates that the authors lay out the logic of their argumentsconcisely, clearly and comprehensively in advance of presenting the elements.

Simply running models and generating results without a clear explanation is aninsult to the audience. In my March 19, 2013, letter during the last 45-daycomment period, I stated the following (http://bit.ly/StateDept19Mar13KXL):

There is no transparency as to guiding principles and assumptions of the

Keystone XL SIES.Unless and until the structure of the SEIS is revealed,and the guidelines and assumptions are clearly laid out for all to see andunderstand, the SEIS cannot be objectively assessed.Statements that it isconsistent with the National Environmental Policy Act are not sufficient.

A concise explanation of what is intended to be demonstrated in a problem ascomplex as this should be demanded by the owner, in this case, the State Dept.

I find nothing that clearly demonstrates that Keystone XL would not play animportant role the expansion of Canadian bitumen extraction. Lacking such,the intelligent reader should conclude that Keystone would contribute to thedeleterious effects of climate change brought about by the combustion of the

fossil fuels produced from tarsands that it would transport to market.

The Keystone XL pipelinelike other means of bitumen transportdoesnothing to inhibit, slow down or stop the extraction of Canadian bitumen.

Keystone XL only has the potential to exacerbate a climate catastrophe.

Keystone XL is not in the National Interest. Its only purpose is to move fossilfuels to market. Its construction and operation is contraindicated, as is anyother means of transport of the tarsand bitumen from Canada to be burned.

Facilitating the transport and combustion of increasing amounts of fossil fuels

including bitumen is not in the National Interest because of the disastrouseffects of the resulting changes in climate in the USA as well as globally.

The Keystone XL pipelines potential to facilitate bitumen excavation andcombustion is not in the National Interest.

Please write to the Department of State at http://bit.ly/WriteState.

Rex & Barack: Retire Refineries. Replace Refineries with Renewables.

http://bit.ly/WriteStatehttp://bit.ly/WriteStatehttp://bit.ly/StateDept19Mar13KXLhttp://bit.ly/WriteStatehttp://bit.ly/WriteStatehttp://bit.ly/StateDept19Mar13KXLhttp://bit.ly/StateDept19Mar13KXL