ence in driving tar sands production and greater carbon pollution. Contrary to the report's assumptions, there is a real chance that crude oil prices will fall below that level.
Energy commodity traders at the Chicago Mercantile Exchange and experts at the International Energy Agency forecast a sharp decline in oil prices over the next decade.
The Energy Information Agency's low oil price forecast, which assumes slower economic growth in developing countries, projects oil prices around $75 or below from 2015 through 2040. In addition, the more successful international efforts are at promoting energy efficiency and new forms of clean energy, the more demand for traditional fossil fuels will shrink, pushing prices down.
The report also presumes that all tar sands growth will come from low- cost projects, and higher cost tar sands projects won't be built with or without the pipeline. That's unrealistic: Higher cost projects are moving forward, but their continued economic viability will depend on variables such as low-cost transportation as well as sufficiently high oil prices.
The tar sands producers themselves belie the claim that Keystone XL won't make a difference in bringing the tar sands to market. The CEO of major tar sands producer Cenovus admitted that his company's plan to triple production in coming years was contingent on more pipeline capacity. Financial giants such as RBC Capital, Goldman Sachs, Barclays and CIBC have all linked the size of the tar sands industry to the availability of new pipelines. The desperate push over this pipeline shows how badly tar sands producers need Keystone XL.
Opinion: Keystone XL pipeline makes sense
Perhaps most serious, the State Department report fails to take into account the actions needed to prevent catastrophic climate change.
In Copenhagen, Denmark, in 2009, the United States and more than 100 other nations agreed that we need to limit the global temperature increase from carbon pollution to 2 degrees Celsius (3.6 degrees Fahrenheit). President Barack Obama affirmed that goal in his Climate Action Plan.
According to the models used in Intergovernmental Panel on Climate Change analysis, we must keep atmospheric carbon dioxide concentrations below 450 parts per million to achieve the 2 degrees target. That's not possible if we maintain the status quo, much less bring online more and exceedingly dirty sources of fuel such as tar sands oil.
In a glaring omission, the Keystone XL review failed to factor in the 2 degrees limit, and assumed the continuation of business-as-usual practices for the next quarter century. We have almost no chance of meeting the 2 degree goal if any of the report's scenarios are realized.
Kerry's obligation is to determine what is in the national interest. For all its flaws, the report acknowledges that the tar sands that would get to market through Keystone XL could significantly worsen climate change. That's a risk that climate champions such as Kerry and Obama shouldn't be willing to take.