Douglas A.

Grandt

PO Box 6603 Lincoln, NE 68506 February 9, 2014

Bureau of Energy Resources, Room 4843 Attn: Keystone XL Public Comments U.S. Department of State 2201 C Street NW Washington, DC 20520 Re: TransCanada permit application for the Keystone XL pipeline Dear John Kerry and Barack Obama: Beginning 1972, my second job following two years doing computer simulations of Prudhoe Bay Reservoir for ExxonMobil, then Humble Oil & Refining Co., was as the first Corporate Planner at a Fortune 500 ocean transportation company transitioning from breakbulk to containerization. Having studied Industrial Engineering/Operations Research and Petroleum Engineering at the University of California (Berkeley) I yearned for a birds-eye-view of the Corporate world and found my ideal niche as understudy for a tough but moral Naval Architect mentor who taught me to speak the language of the Board of Directors in my late 30s. Frankly, I am an engineer/scientist at heartI enjoyed analysis and the search for truth more than the glossy packaged presentations. In many ways, the Final Supplemental Environmental Impact Statement (FSEIS) violates what I have strived to accomplish throughout my entire 42-year career, invalidating all the work that has gone into its preparation. Section 1.4 Market Analysis verbiage in the FSEIS wreaks of a K Street MBA for 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):

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Douglas Grandt February 9, 2014

One thing I would never do as a young Corporate Planner is leave unresolved phrases like higher transportation costs could have a substantial impact on oil sands production levels without some explanation as to why such a comment plays no role in the conclusion. Sinful is the poignant phrase that immediately follows: ... 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 likely to have a limited impact on future production levels could change if supply costs or production expectations prove different than estimated in this analysis. Do they expect us to believe the conclusions with this hanging out there? The coup de grce of this section: Oil sands production and investment could slow or accelerate depending on oil price trends, regulations, and technological developments, but the potential effects of those factors on the industrys rate of expansion should not be conflated with the more limited effects of individual pipelines. Nowhere is this claim substantiated. This wreaks of pure sales promotionnot objective and transparent analysis constructed 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 at page 1.4-131 presents the same unsubstantiated speculations and circular arguments:

Encl.: My letter dated March 19, 2013 !

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Douglas Grandt February 9, 2014

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 West Coast are constructed, they would most likely be utilized regardless of the availability of crossborder pipelines due to the economic attractiveness 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:

Encl.: My letter dated March 19, 2013 !

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Douglas Grandt February 9, 2014

What is the basis for this conclusion and how does it play in the argument? Consequently, imposing a constraint exclusively on future cross-border pipeline capacity does not cause a significant reduction in the modeled prices of oil sands blends or the returns to oil sands producers. The assumptions implied by the statements in the very long paragraph above are speculative, tenuous, and pipe dreams at best. Hinging conclusions on a house of cards is not my idea of professional and objective work. Transparency dictates that the authors lay out the logic of their arguments concisely, clearly and comprehensively in advance of presenting the elements. Simply running models and generating results without a clear explanation is an insult to the audience. In my March 19, 2013, letter during the last 45-day comment 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 and understand, the SEIS cannot be objectively assessed.Statements that it is consistent with the National Environmental Policy Act are not sufficient. A concise explanation of what is intended to be demonstrated in a problem as complex 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 an important role the expansion of Canadian bitumen extraction. Lacking such, the intelligent reader should conclude that Keystone would contribute to the deleterious 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 transportdoes nothing 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 fossil fuels to market. Its construction and operation is contraindicated, as is any other 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 disastrous effects of the resulting changes in climate in the USA as well as globally. The Keystone XL pipelines potential to facilitate bitumen excavation and combustion is not in the National Interest. Curtail Keystone XL. Commence Retiring Refineries. Compel the oil industry to Replace Refineries with Renewables. Taking these three actions as quickly as possible is in our National Interest. Sincerely yours, Doug Grandt Encl.: My letter dated March 19, 2013 ! Page 4 of 4

Douglas A. Grandt

P. O. Box 1582 El Dorado, CA 95623 March 19, 2013

U.S. Department of State Attn: Genevieve Walker, NEPA Coordinator 2201 C Street NW, Room 2726 Washington, D.C. 20520
Re: Keystone XL Pipeline SEIS guidelines and assumptions Dear Ms. Walker, 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 and understand, the SEIS cannot be objectively assessed. Statements that it is consistent with the National Environmental Policy Act are not sufficient.

This fence is a "wall" of ignorance, arrogance, politics and deceit.

President Obama and Secretary Kerry should send the SEIS back to the drawing board requiring that the basic guidelines and assumptions be clearly stated, and that it be updated with the global impacts of excavation, forest destruction, processing, river contamination (all toxins and carcinogens), transporting, refining, and ultimate burning of the tarsands bitumen. In the late1960s, I degreed in Industrial Engineering, Operations Research and Petroleum Engineering. My first job was with the largest oil production and refining corporation in the world. Doing Corporate Planning (1972-1979), I learned the absolute necessity to document all of the assumptions that were the basis of my work. Now retired, I believe it is fundamental to the credibility of the SEIS that you clearly state the assumptions and expose the biases. Sincerely yours,