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US Delays Keystone XL Pipeline Project

by Dan Berman and Darren Goode

The State Department will take another look at the route of the controversial Keystone XL pipeline, pushing President Barack Obama’s difficult decision on the project until after the 2012 election.

(photo: Clayton Conn / Tar Sands Action) Environmental groups have been protesting the pipeline that would run from Alberta oil sands to Texas refineries, and there have been rumblings that greens would abandon Obama next fall if he approved it.

Two congressional sources who have been briefed on the matter said the department is expected to announce Thursday that it will do a review of an alternative route, which is expected to punt a final decision on the pipeline until after the election. State Department officials are not expected to specify an exact timeline for the review, though one aide said a decision is not expected before the first quarter of 2013.

Reuters first reported the news of the State Department’s decision to delay.

White House press secretary Jay Carney declined this afternoon to comment on the reports. Asked whether the president would like to see the decision postponed until after the 2012 elections, Carney said: "The president wants the best possible decision.” He added: "I can tell you the president made clear what the criteria are … and none of those criteria are political."

For months, the conventional wisdom had been that a presidential permit for Keystone XL was inevitable; Secretary of State Hillary Clinton said in October 2010 that she was “inclined” to approve it because it was better to get oil from Canada than from less-friendly nations. The State Department then released a final supplemental environmental assessment in August stating that TransCanada’s proposed route is the preferred option.

But the environmentalist protests led by 350.org activist Bill McKibben, as well as opposition in Republican-friendly Nebraska to the proposed route, seem to have led the administration to delay the decision.

Sen. Bernie Sanders (I-Vt.), who has been one of the leading senators fighting the pipeline, said Thursday that "my understanding is that a decision will be coming pretty soon. Be patient."

Obama himself last week told a Nebraska TV reporter that he will weigh several environmental factors once the department delivers its verdict for him to consider, raising uncertainty about the direction he will take.

Nebraska officials have expressed concern about the proposed route through the state’s Sand Hills region and the Ogallala aquifer, which is used as a key source of drinking water and irrigation for several states.

A spokesman for Sen. Mike Johanns (R-Neb.), who is among those opposing the proposed route, said the senator is pleased with Thursday’s announcement. "Obviously he would welcome that," the spokesman said. "But if this is a potential re-analysis of the route, it needs to be sincere and not just an effort to push it past the election."

The pipeline has already been under review for 39 months and the recent decision by the department’s deputy inspector general to look into conflict of interest allegations regarding the review may in and of itself push a decision back much further.

But the EPA had yet to weigh in on the department’s August analysis and the agency had been critical of the department’s prior assessments for not sufficiently taking into account potential environmental harm.

TransCanada spokesman Terry Cunha said Thursday morning it was not aware of any decision from the State Department.

“Over the last few days, we have read, as you have, quotes from unnamed sources making statements about Keystone XL and the review process,” a company spokesman told POLITICO. “When we hear from a named source on the record we will comment specifically. Until that happens, our understanding is the department of State is following a process it outlined last spring — to work toward a decision on a Presidential permit by year end.”

The plan would be to immediately begin construction after receiving a presidential permit and then to begin operating the $7 billion, 1,700-mile pipeline in 2013.

The pipeline has the support of many Republicans in Congress and also major labor unions like the Teamsters, Laborers’ International Union of North America and segments of the AFL-CIO.

Twenty-six members of the House Energy and Commerce Committee — nearly all Republicans — sent a letter to Obama Wednesday urging approval of the existing proposal from TransCanada and noting that the initial commitment by the department to make a decision by the end of the year “appears to be in jeopardy.”

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