The company proposing to build the Keystone XL oil pipeline asked the State Department on Monday to halt indefinitely its ongoing review of the massive project, adding new delays and uncertainties, and possibly ensuring that final word will come from President Obama’s successor.
Amid legal challenges in Nebraska — ground zero in the fight over the project — TransCanada officials sent a letter to Secretary of State John F. Kerry and called on the administration to cease immediately its Keystone approval process.
The move raises a real possibility Mr. Obama will not be the one to make a decision on the pipeline and that the next president, perhaps one more inclined to back new oil-and-gas infrastructure in the U.S., will be the final arbiter.
Powerful environmental groups quickly condemned TransCanada’s request and said it’s clear the company simply wants to delay a decision until January 2017, when a Republican may enter the White House.
But TransCanada argues it’s legally appropriate, given past precedent, for the State Department to temporarily halt its work.
Earlier this year, the company abandoned attempts to exercise eminent domain rights over private land in Nebraska, a plan that had encountered numerous legal setbacks and threatened to derail the project entirely. Instead TransCanada decided to seek new approval from the Nebraska Public Service Commission, a tactic that would let the company bypass lawsuits from individual landowners who objected to their land being taken for the project.
The latest state review process is expected to take at least seven months, perhaps as long as a year, to complete, and TransCanada says the U.S. State Department simply can’t conduct an effective review process until the Nebraska studies are complete.
“In order to allow time for certainty regarding the Nebraska route, TransCanada requests that the State Department pause in its review of the presidential permit application for Keystone XL,” said Kristine Delkus, TransCanada’s executive vice president of stakeholder relations and general counsel, in the letter to Mr. Kerry. “This will allow a decision on the permit to be made later based on certainty with respect to the route of the pipeline.”
The $8 billion pipeline, which would cross the Canada-U.S. border, connect with existing pipeline infrastructure and transport more than 800,000 barrels of Canadian oil each day to refineries on the U.S. Gulf Coast, has been under consideration since Mr. Obama came into office in 2009. The project requires presidential approval because it crosses an international boundary.
While Mr. Obama has promised his administration would make a decision on Keystone before he leaves office, Monday’s move raises serious questions about whether that can happen.
If the Nebraska review does, in fact, last a full 12 months, it will be virtually impossible for the administration to make its decision before Mr. Obama’s term ends.
Before TransCanada sent its letter Monday, White House officials again vowed that the president will make a decision before January 2017. That declaration came amid reports Mr. Obama was leaning toward rejecting the project — something his staunch supporters in the environmental community have demanded for years.
“Our expectation at this point is that the president will make a decision before the end of his administration on the Keystone pipeline, but when exactly that will be, I don’t know at this point,” White House spokesman Josh Earnest told reporters Monday, adding “it’s possible” a decision could come before the end of this year.
In its request, TransCanada cited previous State Department precedent in halting its review while legal challenges played out at the state level.
Earlier this year, the Nebraska Supreme Court upheld Keystone’s proposed route through the state following lawsuits from landowners and environmental activists. Those lawsuits had challenged the constitutionality of Nebraska laws that facilitated pipeline approval.
During that legal process the administration said it would be inappropriate to continue studying Keystone.
This time, however, environmental activists — perhaps sensing Mr. Obama is poised to veto the project and kill it once and for all — are pushing the administration to do the opposite and reject TransCanada’s request.
“Suspending the Keystone XL permit application at this point would be absurd. This is nothing more than another desperate and cynical attempt by TransCanada to build their dirty pipeline someday if they get a climate denier in the White House in 2017,” said Tiernan Sittenfeld, senior vice president for government affairs with the League of Conservation Voters.
“President Obama and Secretary Kerry have all the information they need to reject this dangerous pipeline, and we are counting on them to do just that,” she said.
Mr. Obama previously has said he would approve Keystone only if it would not significantly add to U.S. greenhouse gas emissions. Preliminary State Department environmental reviews have found that the project would not increase emissions since it’s likely TransCanada would find a way to get its oil to market with or without Keystone.
Monday’s developments also come amid new leadership in Canada, though newly elected Canadian Prime Minister Justin Trudeau also is a staunch supporter of Keystone, and tensions between the two governments over the project likely won’t be eased by the changes inside Canada.