02/03/2015 11:42 am ET Updated Apr 05, 2015

A Key to the Keystone Problem

One of the first items on the agenda for the new Republican-led Congress is consideration of the Keystone-XL Pipeline, which was approved by the Senate last Thursday. Now, the bill heads back to the House for reconciliation with the Senate's version before being sent to President Obama, who promises to veto it on environmental grounds.

Environmental objections to the Keystone project have left many who study the energy industry scratching their heads. Millions of miles of pipeline already crisscross the country, and the extra 1,200 miles of Keystone might have been just another construction project, similar to the sections previously completed without much fanfare.

But environmentalists seized on the pipeline as way for President Obama to show he's serious about the environment. Their objections follow two major themes: leaks in the pipeline damage sensitive ecosystems and the low cost of pipeline transport allows for more extraction of fossil fuels that cause climate change.

Last year, in response to the first objection, the path of the Keystone was rerouted to avoid fragile ecosystems in the Sand Hills region of Nebraska. This doesn't eradicate the potential for spills but shifts them to places that are not pristine. Supporters of the pipeline are also quick to point out that alternative shipping methods such as rail, truck, and barge are more likely to result in spills than a pipeline.

With regard to the second argument, Canada has made it clear that pipeline or not, Alberta's tar sands oil is coming out of the ground. Last March, the Canadian Ambassador Gary Doer, speaking at the University of Texas at Austin said, "If you stop the pipeline, you still don't stop the flow. We aren't just going to stand around like Oliver Twist, 'Please sir, may I have a pipeline?' We are selling it!"

And in fact, while Canada waits for the decision on the Keystone, it has already begun shipping oil from Alberta to their coasts by train, where it's sent overseas, often to places with less regard for the environment than the United States.

This leaves President Obama in a tight spot when the Keystone bill comes to his desk. Rejecting the measure does appear to support his stance on climate change, but instead leads to the export of product that would be dealt with more responsibly in the US. Approving the measure appears to support big oil and Republicans with no regard for the environment.

But there is a way out. During the coming week of committee meetings, the House and the Senate could put together an amendment that brings these opposing sides together. An amendment like that could make the Keystone is the country's first carbon-neutral pipeline. It could require the amount of carbon that flows through the Keystone pipeline never enters the atmosphere.

This isn't a fantasy. A process called carbon capture and sequestration, or CCS, collects the carbon dioxide from industrial smokestacks, compresses it, and injects it underground into the same types of geologic reservoirs where oil was extracted in the first place. In the last ten years, pilot CCS projects around the world, from Norway to Australia to Mississippi and Montana, have demonstrated that millions of tons of carbon dioxide can be securely and permanently stored deep underground.

The Canadians have caught on. At the start of Keystone near Edmonton, Shell Canada is launching the Quest Storage project to capture and store over a million tons of carbon dioxide from one of its more polluting refineries each year.

A million tons is just a drop in the pipeline, however, and more--much more--could be captured and stored at the tail end of the pipeline, where appropriate infrastructure near Houston already exists and the geology proves ideal for CCS. A new study of the Gulf of Mexico shows that the basin has world-class carbon storage potential. Initial estimates of the carbon capacity in Texas offshore reservoirs are 86 gigatons. That's enough to store Keystone emissions for hundreds of years. Even better, offshore leases on these same ideal rock formations directly support the Texas permanent school fund, a boon for education. The number of new jobs in an emergent CCS industry is unknown, but would greatly exceed in those for the Keystone itself.

CCS is a solution, but it isn't free. Capture costs work out to around $25 per barrel, less than the difference between today's low prices and more typical numbers. And offsetting the cost even more is an eager and expanding market for captured carbon dioxide that can be used to push out extra domestic oil from worn out oil fields in a process called carbon, capture, utilization, and storage (CCUS). Unlike fracking, which injects a slurry of proprietary chemicals to make small fractures in dense rocks, CCUS introduces only carbon dioxide into naturally porous rocks. The process has been used in west Texas for over four decades.

If all the carbon that goes through the Keystone pipeline is captured and stored, it's about 2.5% of the annual US energy-related emissions, a toenail on the nation's carbon footprint. But it's a reasonable, feasible start. In today's polarized political environment, linking the Keystone completion to CCS is a path towards cooperation between environmentalists and industry. It would be a key step toward a more energy-stable and emission-free future.