An economic analysis of the proposed Keystone XL pipeline’s possible climate impacts has concluded they could be up to four times higher than previously estimated.

In the study published in the journal Nature Climate Change, researchers at the Stockholm Environment Institute write that widely quoted U.S. State Department findings that the oilsands pipeline wouldn’t make a significant difference missed a major source of greenhouse gas emissions.

“It didn’t appear that they looked at the market implications,” said co-author Peter Erickson. “If the Keystone pipeline were to enable a greater rate of extraction of the oilsands, would that not increase global fuel supplies, which might then decrease prices and therefore allow a little bit more global consumption?

“That’s the analysis that we did here and we found that it could be the greatest emissions impact of the pipeline.”

Erickson and co-author Michael Lazarus used figures from previous research and international agencies that mathematically describe how oil prices affect consumption. They found that a slightly lower price created by every barrel of increased oilsands production enabled by Keystone XL would increase global oil consumption by slightly more than half a barrel.

The capacity of the pipeline proposed by Calgary-based TransCanada Corp. (TSX:TRP) would be about 820,000 barrels […]