Keystone Pipeline Decision Could Slide to Next President

by Associated Press /

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TORONTO -- A request for the U.S. government to suspend its review of the Keystone XL pipeline could delay any decision until the next president takes office — potentially leaving the fate of the controversial project in the hands of a more supportive Republican administration.

TransCanada, the company behind the project, said Monday it had asked the State Department to suspend its review of the Canada-to-Texas pipeline, citing uncertainties about the route it would take through Nebraska.

TransCanada officials fear President Barack Obama will reject the project. If the U.S. agrees to the suspension — which is not assured — that would leave the decision in the hands of the next president.

While Democratic candidates, including front-runner Hillary Rodham Clinton, oppose the project, Republican candidates support it.

Some pipeline opponents contend that TransCanada hopes to delay the review process in case a more sympathetic Republican candidate wins the 2016 presidential election.

The State Department review is mandated as part of the application process because the $8 billion pipeline crosses an international border.

Keystone X'd? TransCanada Asks U.S. to Suspend Application Review

State Department spokeswoman Elizabeth Trudeau said Tuesday that the State Department will continue its review of the project while considering TransCanada's request. She noted that the company has not withdrawn its application to build the pipeline.

White House spokesman Josh Earnest said Tuesday that the move to delay the review appeared to be politically motivated.

"There's reason to believe there may be politics at play here," he said at a news briefing. "We believe the decision should be made by the experts who are evaluating this project."

Prior to TransCanada's announcement Monday, Earnest said Obama intended to make a decision on the pipeline sometime before his presidency ends in January 2017.

Clinton and her main challengers for the Democratic presidential nomination are already on record as opposing Keystone. All of the leading Republican presidential candidates support the pipeline.

"In defeat, TransCanada is asking for extra time from the referees, and clearly hoping they'll get a new head official after the election. It's time for the current umpire, President Obama, to reject this project once and for all," said environmental activist Bill McKibben, co-founder of the group

TransCanada spokesman Mark Cooper said company officials "have been hearing since February the same rumors that a denial or a decision is imminent" from the Obama administration but said the company's focus remains on demonstrating the project is in the interest of the United States.

"Our focus isn't on the political machinations of what this president may or may not do or who may be in office a year from now," Cooper said.

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The company said such a suspension would be appropriate while it works to secure approval of its preferred route through the Nebraska in the face of legal challenges. TransCanada said it anticipated it would take seven to 12 months to get route approval from Nebraska authorities.

The 1,179-mile-long pipeline has long been a flashpoint in the U.S. debate over climate change.

Critics oppose the pipeline which would transport oil tapped from the Alberta oil sands, saying it requires huge amounts of energy and water and increases greenhouse gas emissions. They also express concern that pipeline leaks could potentially pollute underground aquifers that are a critical source of water to farmers on the Great Plains.

Pipeline supporters maintain it will create jobs and boost energy independence. They also say pipelines are a safer method of transporting oil than trains, pointing to recent cases of oil train derailments.

Nebraska Gov. Pete Ricketts reiterated his support for Keystone in a statement issued by his spokesman Taylor Gage.

"The governor has been clear ... that it will be the safest pipeline built yet in our state, and that it will bring good-paying jobs and property tax revenue to Nebraska's counties," it said.

Both North Dakota senators, Democrat Heidi Heitkamp and Republican John Hoeven, criticized the Obama administration's long delay in approving the pipeline. Hoeven said it's "clear" that the administration intends to deny the pipeline permit, which he claimed would have "a chilling effect on the willingness of other companies to invest in important energy infrastructure projects in the United States."

TransCanada announced the project in 2008, which has undergone repeated federal and state reviews.

The pipeline would be built from Canada through Montana, South Dakota and Nebraska, where it would connect with existing pipelines to carry more than 800,000 barrels of crude oil a day to refineries along the Texas Gulf Coast.

Delays in approving the pipeline have caused friction between the U.S. and the outgoing Canadian Conservative government of Prime Minister Stephen Harper. Harper was frustrated by Obama's reluctance to approve the pipeline and the issue damaged U.S-Canada relations.

Although incoming Liberal Prime Minister Justin Trudeau, who is sworn in Wednesday, supports Keystone, he argues relations with the U.S. should not hinge on the project.

Canada needs infrastructure in place to export its growing oil sands production. Canada relies on the U.S. for 97 percent of its energy exports. Alberta has the world's third largest oil reserves, with 170 billion barrels of proven reserves. But a sharp decline in the price of oil makes many of the new oil sands projects less viable.

Reuters contributed to this report.

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