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U.S. once again delays decision on Keystone XL pipeline

The Keystone oil pipeline infrastructure in North Dakota.


The Obama administration has once again punted the politically charged decision on the Keystone XL pipeline in a move that will likely delay a final ruling past November's congressional elections.

The U.S. State Department said Friday it needs to assess the impact of a court battle in Nebraska that could force a change in the pipeline's route. But the project's supporters insisted the administration simply didn't want to make the controversial decision in advance of the November vote. Republican Senator Lisa Murkowski of Alaska called the delay "a stunning act of political cowardice."

In a conference call with reporters, State Department officials said they had no option but to extend the deadline for government agencies to comment on the anticipated environmental impacts of the Keystone XL project because there is no certainty as to what the actual route will be and what local ecosystems might be impacted.

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"We are prudently recognizing that the facts that the agencies need to assess and analyze could change," said one official, who spoke on condition he not be named. He would offer no estimate as to when a recommendation to the president would be forthcoming.

"We are trying to get a better understanding of what route might be and collecting information regarding the case and any other issues that might effect the final outcome in Nebraska. . . We are moving ahead very diligently with all other aspects of the review that are necessary for the national interest determination."

TransCanada Corp.'s $5.4-billion pipeline would deliver some 830,000 barrels per day of crude from Canada and the northern United States to a massive refining complex on the U.S. Gulf Coast. The company filed for approval nearly six years ago and has faced several delays, including a requirement to change the pipeline route to avoid a sensitive ecological zone in Nebraska. Landowners won a lower court decision in February that ruled the state's approval process violated Nebraska's constitution. That ruling was immediately appealed to the state supreme court, and a final decision is not likely until early 2015.

"We are extremely disappointed and frustrated with yet another delay," chief executive officer Russ Girling said. He suggested the lack of a Keystone XL would leave U.S. more dependent on "suspect and aggressive foreign leaders" for imported oil.

Keystone XL has become a cause célèbre in U.S. politics, with environmentalists arguing a rejection would demonstrate U.S. leadership on climate change by stifling growth in the oil sands. Proponents cite a State Department analysis that concluded the pipeline would not result in more greenhouse gas emissions because Canadian producers will find other ways to get the crude to market if it was turned down.

Prime Minister Stephen Harper – who once called an approval a "no brainer" – has expressed frustration over the glacial pace of the administration's decision-making. His communication's director, Jason MacDonald, said the government was "disappointed" with the delay.

Canadian ambassador Gary Doer said the State Department should focus on the international crossing between Alberta and Montana and leave it to the state of Nebraska to figure out the precise route there. He noted that Mr. Obama did not block TransCanada's construction of the southern portion of the Keystone XL pipeline, which runs from Oklahoma to Texas.

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"We believe that every day they delay the pipeline approval, they will have less opportunity for employment for blue-collar workers, and more greenhouse gases and more safety risk and higher cost with rail and trucks," Mr. Doer said in an interview from Washington. A growing amount of Canadian crude is reaching U.S. market by rail, though it has not reached the volumes that Keystone XL would carry to the Gulf Coast.

The pipeline project has supporters among members of both parties in Congress, but many liberal Democrats oppose it. Environmentalists applauded the delay, hoping it will be a prelude to an outright rejection.

"It's disappointing President Obama doesn't have the courage to reject Keystone XL right now," said Jamie Henn, communications director for, which has rallied opposition to the project. "But this is clearly another win for pipeline opponents. We're going to keep up the pressure on the president to make the right call and continue to expand our broader fight against the fossil fuel industry."

- With files from Paul Koring in Washington

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About the Author
Global Energy Reporter

Shawn McCarthy is an Ottawa-based, national business correspondent for The Globe and Mail, covering a global energy beat. He writes on various aspects of the international energy industry, from oil and gas production and refining, to the development of new technologies, to the business implications of climate-change regulations. More


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