By John Kemp
LONDON, Sept 6 By submitting a revised route for
its controversial Keystone XL pipeline with only minor
modifications, TransCanada on Wednesday called the
bluff of the Obama administration.
The company has offered small changes to meet the narrow
objections cited by the president when he rejected the previous
application in January - but otherwise left the route and the
Concerns about possible leaks from a section of pipeline
crossing the Sand Hills region in Nebraska have become a symbol
for a much bigger conflict about whether Canada's vast tar
sands, and new resources like North Dakota's Bakken, should be
developed to promote energy security, or locked away to prevent
Keystone has become the focal point for a proxy war which
has drawn in environmental groups like the Natural Resources
Defense Council (NRDC), as well as the American Petroleum
Institute (API). It has sucked in the U.S. and Canadian
governments, both major political parties in the United States,
and now both the presidential campaigns, and will almost
certainly feature prominently in the forthcoming presidential
In January, President Barack Obama rejected the last
application, claiming Congress had left him with insufficient
time to evaluate all the impacts properly but left the door open
to approving it eventually, after the election is over. In
contrast, Republican challenger Mitt Romney has made approving
Keystone one of the most prominent elements in his campaign plan
for a stronger middle class.
The API's "Vote 4 Energy" campaign is now airing
advertisements and campaigning in favour of Keystone and other
pro-drilling policies in five swing states that could be crucial
to the outcome of the presidential election.
Amid all this political activity, it is easy to forget the
fight is supposed to be over just one relatively small section
in a total route stretching from Canada to the Gulf of Mexico.
Using one small part of Keystone to shape broader energy
strategy in this way is a misuse of the permitting and
environmental impact process, and risks bringing both into
disrepute. Romney has already made reforming the regulatory
process one of his top five energy priorities.
It would be more honest to admit the proxy war has never
really been about spills in the Sand Hills and is really about
the sort of energy policy that the United States wants for the
THE SAND HILLS
In August 2011, the U.S. Department of State, which advises
the president on all permits for pipelines crossing an
international border, released a "final" environmental impact
statement (FEIS) for the proposed pipeline as required by the
National Environmental Policy Act (NEPA).
On November 10, however, the Department postponed a final
decision, announcing "it was necessary to seek additional
information regarding potential alternative routes around the
Sand Hills in Nebraska to inform the determination regarding
whether issuing a permit for the proposed Keystone XL pipeline
is in the national interest."
On November 14, TransCanada reached agreement with Nebraska
on some minor route modifications to reduce the pipeline's
footprint in the Sand Hills.
On December 23, Congress rushed through, and the president
signed, all in a single day, legislation requiring the president
to issue a permit within 60 days, or make a determination that
it was not in the national interest, and explain his reasons in
a report to Congress.
Finally, on January 18, 2012, the president rejected the
application. Acting on advice from the State Department, he
announced 60 days was insufficient to obtain and assess all the
extra information the department had sought in November. The
project would therefore not serve the national interest.
"The Sand Hills areas possesses a combination of
characteristics that are not present together elsewhere along
the proposed route" the State Department explained in the
required report to Congress. These include high value wetlands,
risk of wind erosion and presence of shallow ground water in
giant Ogallala aquifer used for drinking water and vital for
Because of the earlier modifications agreed with Nebraska,
there was not enough time in 60 days to redo the analysis on the
section which had been moved. "In light of the reroute of the
pipeline ... there is incomplete information regarding the
potential environmental impacts ... (as well as socioeconomic,
environmental justice and cultural impacts)" officials wrote.
If ever a company has been penalised for trying to do the
right thing, and meet concerns expressed by objectors, then
TransCanada must be it. Its application was turned down by the
federal government because of last-minute modifications it had
made to satisfy local communities and state regulators.
The Sand Hills has never been the sole objection for groups
like the NRDC. But no one has ever been quite clear whether it
is the only objection to for the Obama administration. Rejecting
the application in January, the president emphasised that it was
not "a judgement on the merits of the pipeline."
The White House has strongly implied it does not have a
problem with other sections of the route or with the principal
of the pipeline, without ever explicitly committing to approve
it if the Nebraska section could be ironed out.
As part of his "all of the above" energy strategy, the
president announced he was directing the administration to help
expedite approvals TransCanada needs for the southern leg of the
line from Cushing in Oklahoma to Port Arthur in Texas on the
Gulf of Mexico. It was a somewhat empty gesture since that leg
of the pipeline, which is wholly domestic, does not need
White House officials also confirmed they were encouraging
TransCanada to submit a new application for the northern leg,
though a decision could not be reached before 2013.
In May, TransCanada decided to test the administration's
commitment by submitting a new application. The submission
contained all the non-environmental information to support a
permit. TransCanada promised to add environmental data once a
route had been selected by the pipeline company in consultation
with Nebraska state officials.
TransCanada noted, with just a hint of legal menace, the
earlier rejection "was based solely on the rationale that the
time provided for a decision was not adequate to complete the
national interest review ... including specifically the
assessment of potential alternative pipeline routes that avoid
the Sand Hills region".
"The president's acceptance of the (State) Department's
recommendation to deny the permit rested on the same reasoning."
On September 5, TransCanada announced it was formally
submitting a supplemental environmental report (SER) to
regulators in Nebraska for a new route designed to reduce the
impact on local lands and sensitive resources, with simultaneous
submission to the State Department ().
Nebraska's Department of Environmental Quality will now have
to prepare an evaluation, hold a public hearing, and submit the
final report to the state governor, who has 30 days to approve
or reject it. Only then will the State Department have to make
its own recommendations. All of which will ensure the president,
whoever it is, will not have to make a decision until 2013 (ecmp.nebraska.gov/deq-seis/).
Route changes and a new supplemental environmental impact
statement (SEIS) could provide Obama with the political cover
needed to mount a climb down on the issue and allow the pipeline
to go ahead after the election.
Certainly that's what TransCanada and others with an
interest in fossil energy have been led to believe. But it would
amount to a betrayal of the president's strongest supporters in
the environmental movement, who have been led to believe he
might continue to oppose it. Either way, someone is going to
feel bitterly let down.
Opponents have made clear they oppose the pipeline on
principal, regardless of route, because it would encourage
development of tar sands in Canada as well as exploitation of
U.S. resources like Bakken. Cheap oil and gas generates more
emissions and undercuts the competitiveness of clean
For its part, the oil and gas industry has exploited the
firestorm to step up pressure on the administration to take a
more friendly approach to fossil fuels, and moderate its bias in
favour of clean fuels.
The proxy war has been fought out through duelling
environmental studies, with plenty of litigation and lobbying at
both state and federal levels. It has kept a small army of busy.
But NEPA is not meant to be a full-employment law for
economists, lawyers and lobbyists. Nor is it meant to set to
national energy policy.
Fake fights over small elements of an enormous
infrastructure project are not really the best way to articulate
the energy and environmental choices the United States faces
over the next decade.