Exclusive: U.S. decision on Keystone XL pipeline seen dragging past summer

WASHINGTON Sat May 11, 2013 1:41am BST

Demonstrators carry a replica of a pipeline during a march against the Keystone XL pipeline in Washington, February 17, 2013. REUTERS/Richard Clement

Demonstrators carry a replica of a pipeline during a march against the Keystone XL pipeline in Washington, February 17, 2013.

Credit: Reuters/Richard Clement

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WASHINGTON (Reuters) - The Obama administration is unlikely to make a decision on the Canada-to-Nebraska Keystone XL pipeline until late this year as it painstakingly weighs the project's impact on the environment and on energy security, a U.S. official and analysts said on Friday.

The decision may not be made until November, December or even early 2014, said a U.S. official, as President Barack Obama will not rush the process, which still has a number of stages to work through. One of those stages has not even begun yet and will run for months.

"The president has to be able to show that the administration looked under every stone to ensure it knew as much as it possibly could about the impact of Keystone," said the official, who did not want to be named given the sensitive nature of the project.

Analysts agreed that a decision would not be made by this summer as the State Department had suggested when it issued an environmental review on the pipeline on March 1.

The State Department is nominally in charge of making a final decision on TransCanada Corp's (TRP.TO) proposed project, which would help link Alberta's oil sands with refineries and ports along the U.S. Gulf Coast, because the pipeline would cross the national border. But Obama is expected to weigh heavily on the decision.

Another delay in the project, which has been pending for more than four years, would likely anger Canada, whose Prime Minister Stephen Harper is visiting New York next week to push the project at the Council on Foreign Relations.

Other Canadian federal and provincial officials have visited Washington regularly to press the case for the pipeline.

It could also set back TransCanada which last month said delays by Washington would delay completion of the project to the second half of 2015 and push costs for the project above its estimate of $5.3 billion.

A State Department spokeswoman on Thursday said the environmental review has received more than 1 million public comments.

The State Department did not immediately respond to questions about when it plans to finalize its assessment or move to the next stage of determining, with input from several other agencies, whether the pipeline is in the national interest. That stage is expected to take 90 days. Federal agencies will also have 15 days to comment on the decision before it is finalized.

A White House spokesman said in an email that he could not offer any guidance on when a decision is expected.

Kevin Book, a policy analyst at ClearView Energy Partners, said August looks less likely for a decision, but September or October still seem reasonable. Obama may want to time an approval of the pipeline to coincide with new Environmental Protection Agency climate rules for coal plants as a way of appeasing environmentalists who oppose Keystone XL, he said.

Getting the timing right could be a challenge as Republicans in the Senate stall the confirmation of Gina McCarthy, Obama's pick to lead the EPA.

BIG REVISIONS NEEDED?

Backers of the pipeline say the project would boost North American energy security and provide thousands of construction jobs. Opponents argue that it would lead to higher releases of greenhouse gases.

Even before that the national interest decision process kicks off, revisions to the environmental assessment may be needed after the EPA last month took issue with several parts of the State Department's review.

The EPA had concerns about the level of emissions from Canada's oil sands, where crude production is carbon-intensive. It also took issue with the State Department's conclusion that the pipeline would have no effect on climate because the oil sands would make it to market whether or not the pipeline was approved. The State Department said much of the oil could be moved by rail, an assumption the EPA questioned.

If the EPA and State Department do not come to an agreement, the decision could be sent to the White House, which could take even more time. A more likely scenario is that the two agencies will work out a solution, but they will most likely take their time to examine every detail to shield the decision from lawsuits.

"If they short-circuit the process it will open up whatever decision they make to legal challenge," said Daniel Weiss, a fellow at the Center for American Progress Action Fund.

Bills are pending in the U.S. House of Representatives and Senate that would give Congress, not the administration, the power to approve the pipeline. Passage in the House seems likely, but prospects in the Democrat-led Senate are uncertain, and the bill would probably meet a presidential veto.

(Editing by Carol Bishopric)

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Comments (4)
RobDekker wrote:
We already know that this pipeline will increase the price of West Canadian crude, which will lead to increased gasoline prices in the Mid West.

We are already “energy independent”, since we are exporting 3 mbpd while importing 2.8 mbpd from all OPEC countries combined, and that the Keystone XL is simply providing more low cost feedstock for export of refined products.

We already know that because of our continued decrease in domestic oil products due to increasing fuel efficiency of our vehicle fleet, refineries in the Gulf will continue to increase their export.

We already know that this pipeline will create an additional 500,000 ton PER DAY of toxic sludge be pumped into unlined “tailing ponds” the size of Washington DC, which leak toxins into the Athabasca river system, killing wildlife and increasing cancer rates in down stream communities.

We already know that this pipeline will enable a 50 % increase of the largest industrial project on the planet which is on track to turn pristine Boreal forest the size of Florida into bitumen extraction facilities and open pit mines.

We already know that the Canadian government has issued leases for 93,000 square kilometres of pristine Boreal forest to oil and gas companies without A SINGLE environmental impact study.

We already know that this pipeline will leak, and that the substance is diluted bitumen, which we already know from the Kalamazoo river spill is much harder to clean up, and much more toxic than regular crude, and that we have the benefit of having our essential aquifiers contaminated with this stuff.

We already know that a foreign corporation is using the argument of “eminent domain” to violate property right of US land owners.

And we already know that this project will create only 35 permanent jobs for Americans, and not more than a few thousand temporary US jobs (about 0.002 % of the US work force for one year), and decidedly NOT the tens of thousands, hundreds of thousands, or even up to a million jobs that our politicians have been handwaving about.

And since we aleady know that we EXPORT 3 mbpd in refined products, while we IMPORT only 2.8 mbpd from all OPEC countries combined, the last argument in favor of the Keystone XL, that of “energy independence”, pushed forward by our politicians, we know that we are ALREADY energy independent of OPEC, and any new imports will be EXPORTED.

So, now that we know that right-wing politicians and the fossil fuel industry have deceived the American people in every possible way, can we take a step back and assess again :

Exactly WHAT about the Keystone XL is in the “national interest” of our nation ?

May 11, 2013 9:36am BST  --  Report as abuse
pbgd wrote:
All this environmental talk is inconsequential. The oil flows to the refineries with or without an expansion of the existing Keystone pipeline. Transport by rail merely adds a few extra cents per gallon for the consumer. That’s all, folks.

May 11, 2013 4:12pm BST  --  Report as abuse
SanPa wrote:
Robdekker has already summed up the arguments … and the conclusion is that the pipeline will help a few Texas oil barons, but afford little lasting benefit to the peoples of the United States.

May 11, 2013 4:59pm BST  --  Report as abuse
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