“Carbon Tracker responds to the US Department of State’s Final Supplemental Environmental Impact Statement (FSEIS) with our new research report KXL: The ‘significance’ trap. This report shows that the $8+ cost advantage KXL would bring over rail makes extra projects equivalent to the pipeline’s capacity break even. This market view confirms that KXL is significant for a number of reasons, by extrapolating the numbers applied in the FSEIS. Mark Fulton, (former Head of Research at Deutsche Bank) said “Following through the numbers in the KXL market analysis, we found there is a significant amount of production that could be enabled by the pipeline with a production cost of $48-60.”…As confirmed by analyst reports, KXL is significant for oil companies who are relying on the pipeline to improve the economics of their projects enough to make them viable. There is over 510kbpd of bitumen production which would benefit from even the narrowest improvement of margins. Once diluted for transport, this would be equivalent to the 730kbpd of KXL capacity earmarked for oil sands production. KXL enabled production will produce lifecycle emissions of around 5 billion tonnes of carbon dioxide through to 2050. This output from a single pipeline is equivalent to the total carbon pollution from the whole of the United States in 2013. The FSEIS did not consider the IEA’s global 450ppm low emissions scenario, which is in line with global efforts to limit carbon emissions. The capacity of KXL is equivalent to the net oil production growth for the entire OECD Americas region under the IEA 450ppm scenario. This makes it significant in the context of future production plans for the US and Canada. James Leaton, Research Director at Carbon Tracker concluded “KXL is significant from a number of angles – in terms of project economics, increased production, and ultimately carbon pollution.”
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