U.S. further delays final decision on Keystone XL pipeline

WASHINGTON Fri Apr 18, 2014 7:01pm EDT

A TransCanada Keystone Pipeline pump station operates outside Steele City, Nebraska March 10, 2014. REUTERS/Lane Hickenbottom

A TransCanada Keystone Pipeline pump station operates outside Steele City, Nebraska March 10, 2014.

Credit: Reuters/Lane Hickenbottom

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WASHINGTON (Reuters) - The Obama administration further delayed its decision on the controversial Keystone XL pipeline project on Friday, with no conclusion now likely until after the U.S. mid-term elections in November.

President Barack Obama has said he will have the final say on whether to allow the pipeline connecting Canada's oil sands region to Texas refiners, and several government agencies had been given until May to weigh in. This had raised expectations of a final decision by mid-year.

But the State Department said on Friday it was extending that agency comment period, citing a need to wait until the Nebraska Supreme Court settles a dispute over what path the $5.4 billion TransCanada Corp project should take.

"That pipeline route is central to the environmental analysis for the project and if there are changes to the route it could have implications," a senior State Department official told reporters.

The legal process will likely continue past November and might stretch into next year, meaning more delays for the politically-charged issue that has been on the drawing board for more than five years.

By linking Canadian fields to refiners in the Gulf Coast, the 1,200-mile (1,900-km) pipeline would lift an energy patch where heavy oil is abundant but that is reached only by burning vast amounts of fossil fuels.

The oil industry agues projects like Keystone can reduce the United States' reliance on Middle East oil while partnering with one of the country's closest political allies, Canada.

Delaying Keystone means "the United States will continue to rely on suspect and aggressive foreign leaders for the eight to nine million barrels of oil that is imported every day," TransCanada Corp chief executive Russ Girling said.

But Keystone opponents - among them environmentalists who make up a part of Obama's political base - say consuming carbon fuel to wrench oil sands crude from the ground will worsen climate change and the pipeline meant to carry up to 830,000 barrels a day will only spur more production.

They expect Obama to reject the project and so fulfill a commitment to battling climate change.

OBAMA'S OWN PARTY

Stakes in the dispute have increased as Obama leads his party into the mid-term elections. Republicans, seeking to bolster their hold over the House of Representatives and take control of Congress by winning a majority in the Senate, have portrayed Obama as depriving Americans of thousands of jobs by delaying the decision.

"Clearly he wants to get this past the mid-terms," said Senator John Hoeven, a Republican of North Dakota, of the fresh delays. "I'm not convinced that's a good strategy. Because people are going to see it for the political decision that it is."

Environmentalists were heartened by Friday's move, which they said left more time to mobilize public opposition.

"Millions of Americans have taken a stand against Keystone, and my hope is that's making the Obama administration think twice," said Bill Snape of the Center for Biological Diversity which helped organize a share of the 2.5 million comment letters received by the State Department.

Several lawmakers, though, said they would waste no time pushing for a Keystone approval through Congress.

"I plan to use my power as chair of the Senate Energy Committee to take decisive action to get this pipeline permit approved," said Democratic Senator Mary Landrieu, who faces reelection in her energy-producing state of Louisiana.

Friday's move will upset some others in Obama's own party. Just a week ago, 11 Democratic senators, many facing tough November races, urged him to make to make a decision by May 31.

CANADA 'DISAPPOINTED'

The move is likely to infuriate Canadian politicians who have grown increasingly irate over delays.

Canadian Prime Minister Stephen Harper's office was "disappointed that politics continue to delay a decision," his spokesman said.

In the near-term, delaying Keystone XL is likely to rattle the Canadian oil sector.

Oil sands producers already sell their crude at a discount due in part to a transportation shortage that has hit producers such as Suncor Energy Inc and Cenovus Energy Inc. But more pipeline delays could aid oil-by-rail developers like Gibson Energy and Canexus Corp that are racing to fill a gap left by a lack of export pipeline capacity.

The Nebraska dispute is rooted in a state law that would have fast-tracked approval of the route and muffled landowner objections. That law has been challenged in state court.

(Additional reporting by Timothy Gardner in Washington, Scott Haggett in Calgary and Randall Palmer in Ottawa; Editing by Sandra Maler and Frances Kerry)

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Comments (12)
SunnyDaySam wrote:
Facts, people:
1- NONE of the oil from the Koch pipeline is for domestic consumption. It’s all going to China and elsewhere.
2- There will be only 35 full time jobs after the pipeline is completed.
that is all…

Apr 18, 2014 5:52pm EDT  --  Report as abuse
Robert76 wrote:
I still fail to see the benefit for the American People.

Claims of job creation are mostly true during the building of he pipeline, but once built, it will take a small skeleton crew to run it.

Claims that this pipeline helps insure our oil independence fail to mention that this pipeline will allow the export not only of Canadian Oil, but also our oil reserves from Cushing, Oklahoma. Just how does exporting our oil make us energy independent?

The only people who will benefit long term are the major shareholders of the oil companies who will be able to drive up energy costs as we export more of our natural resources. The land owners who will be forced into giving up land for this pipeline and the consumers will be the losers in this equation!

Apr 18, 2014 6:06pm EDT  --  Report as abuse
ApostasyUSA wrote:
Why didn’t the Canadian voters let this pipeline go to the west, instead of South to Texas? This pipeline is not going to lower the price of gas. It’s only going to create a few permanent jobs. It will with utmost certainty leak and spill into the water supply. There are already 70+ pipelines that cross the border from Canada, many carrying the toxic tar sands.

Why are Americans not asking why we need this pipeline?

The truth is the only reason Republicans are so crazy about building this thing is that have totally sold out to the oil and coals industries. The Koch Brothers own huge amounts of the tar sands in Canada. You don’t think that has something to do with why the GOP is trying to shove this pipe down our throats?

Though I’d prefer the oil sands stay where they are, rail is actually safer. There are huge problems with pipelines in that when they leak we don’t find out until someone finds the pool of oil. When rail cars leak you know almost instantly.

Between 2002 and 2012, there were a total of 129 reported incidents of crude oil spills on U.S. railroads compared with a total of 1,849 reported pipeline incidents in the same period. On average a railroad oil spill dumps 738 gallons compared with an average pipeline spill of 10,777 gallons per spill. Total gallons spilled from rail cars was 95,256 compared with 19,926,540 gallons spilled as a result of pipeline ruptures. For every million barrels moved by rail an estimated 0.38 gallons were spilled, compared an estimated spill rate of 0.88 gallons were spilled for every million barrels moved by pipeline.

Really, we don’t need more fossil fuels getting to market. Wake up Americans!! The Republican Party has sold their souls. They are slaves to the Saudi’s who own Fox News and puppets for the Koch industries. Neither of these groups gives a rats-a** about Americans.
Please open your eyes Republican voters. You are becoming the tools of the rich oil barons.

Apr 18, 2014 7:19pm EDT  --  Report as abuse
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