US State Department delays Keystone approval until 2013, new route likely if approved

Energy Environment Politics

 Updated 1915 Nov. 10, with link to TransCanada statement, 1940 with more reaction.

The United States Department of State has delayed approval of the controversial Keystone XL pipeline until 2013.

A news release posted on the State Department’s website confirmed earlier media speculation about a delay in the pipeline project approval until after the current US presidential election cycle.

Based on the Department’s experience with pipeline project reviews and the time typically required for environmental reviews of similar scope by other agencies, it is reasonable to expect that this process including a public comment period on a supplement to the final EIS [Environmental Impact Statement]…  could be completed as early as the first quarter of 2013. After obtaining the additional information, the Department would determine, in consultation with the eight other agencies…  whether the proposed pipeline was in the national interest, considering all of the relevant issues together. Among the relevant issues that would be considered are environmental concerns (including climate change), energy security, economic impacts, and foreign policy.

The State Department release also indicates that,if the Keystone XL pipeline is approved, it will likely be rerouted around environmentally sensitive areas, further delaying construction and likely raising costs for TransCanada, the company that wants to build the pipeline. The release says that the State Department has been “conducting a transparent, thorough and rigorous review of TransCanada’s application.”

As a result of this process, particularly given the concentration of concerns regarding the environmental sensitivities of the current proposed route through the Sand Hills area of Nebraska, the Department has determined it needs to undertake an in-depth assessment of potential alternative routes in Nebraska…

During this time, the Department also received input from state, local, and tribal officials. We received comments on a wide range of issues including the proposed project’s impact on jobs, pipeline safety, health concerns, the societal impact of the project, the oil extraction in Canada, and the proposed route through the Sand Hills area of Nebraska, which was one of the most common issues raised….

The concern about the proposed route’s impact on the Sand Hills of Nebraska has increased significantly over time, and has resulted in the Nebraska legislature convening a special session to consider the issue.

The CEO of TransCanada, Russ Girling, reacting to news that the US State Dept. has delayed approval of the Keystone XL pipeline said Thursday, Nov. 10, 2011, “This project is too important to the U.S. economy, the Canadian economy and the national interest of the United States for it not to proceed.”

Girling also said, “”We remain confident Keystone XL will ultimately be approved.

The premier of Alberta, Alison Redford called the decision “disappointing,” saying in a news release:

“It is disappointing that after more than three years of exhaustive
analysis and consultation on this critical project, we find out that a
decision will be delayed until early 2013. Our position has always been
clear that we respect and understand that approval of the pipeline is a
U.S. domestic matter, but the fact remains that Keystone XL is a key
piece of infrastructure for our province. I sincerely hope that the
State Department made this decision based on science and evidence and
not rhetoric and hyperbole from very well-organized interest groups.

Alberta is steadfastly committed to this project and my government will
continue to advocate that we are the safest, most secure and responsible
source of oil for the United States. I will seek immediate answers
from U.S. officials to determine why this decision was made and how the
process will unfold going forward.

The industry group the American Petroleum Institute was less diplomatic than Redford, in its own words, the API “blasted” the decision and directly blaming what it called “radicals.”

This decision is deeply disappointing and troubling. 
Whether it will help the president retain his job is unclear, but it
will cost thousands of shovel-ready opportunities for American workers,”
said API President and CEO Jack Gerard.

“There is no real issue about
the environment that requires further investigation, as the president’s
own State Department has recently concluded after extensive project
reviews that go back more than three years.  This is about politics and
keeping a radical constituency opposed to any and all oil and gas
development in the president’s camp in November 2012.

There has been speculation that cancellation or delay of the Keystone XL project would increase pressure to build the Enbridge Northern Gateway pipeline.