Keystone pipeline decision delayed, likely till after elections

04/18/2014 5:35 PM

04/23/2014 5:28 AM

The Obama administration is indefinitely delaying a decision on approving the controversial Keystone XL pipeline, likely putting off any action until after the November midterm elections.

The State Department said Friday that federal agencies needed more time to comment on the project because a Nebraska court ruling had thrown the route into question. State Department officials said they couldn’t proceed until the Nebraska issues were settled. There’s no timetable for a decision at this point.

“Agencies need additional time based on the uncertainty created by the ongoing litigation in the Nebraska Supreme Court, which could ultimately affect the pipeline route in that state,” the State Department said in a brief statement Friday afternoon.

This is the latest postponement from the administration on a decision whether to approve the Keystone XL pipeline, which has become the nation’s fiercest battle over energy, jobs and climate change.

In 2012, the Obama administration said the pipeline needed more environmental review, a move that delayed the decision until after the presidential election. Now it’s liable to remain unsettled through the midterm elections, where energy development is a key issue in close congressional races as the Republicans seek to take over control of the Senate.

The continuing delay in the project allows President Barack Obama to dodge a politically explosive issue but leaves him open to charges, particularly from Republicans in Congress, that he’s squandering an opportunity to create jobs and further North American energy self-sufficiency.

“It is crystal clear that the Obama administration is simply not serious about American energy and American jobs,” said Senate Minority Leader Mitch McConnell, R-Ky. “Apparently radical activists carry more weight than Americans desperate to get back on the job.”

Democratic Sens. Mary Landrieu of Louisiana and Mark Begich of Alaska, who are facing close re-election contests in conservative energy states and would have been hurt if Obama vetoed Keystone before the November election, blasted the postponement of its approval.

“This decision is irresponsible, unnecessary and unacceptable,” said Landrieu, who promised to use her power as the chair of the Senate energy committee to attempt to get Keystone approved.

But Sen. Barbara Boxer, D-Calif., said postponement was the right move given the legal uncertainties in Nebraska and the unprecedented number of public comments on the project. The State Department said it was in the process of reviewing some 2.5 million public comments on Keystone.

Boxer is pushing for a separate study of the public health impact of the pipeline before it can be approved.

The 1,700-mile Keystone XL pipeline would bring crude oil from the Canadian oil sands in Alberta to American refineries on the Gulf Coast. Plans for the pipeline are controversial because tapping the thick Alberta crude would produce more planet-warming gases than would conventional sources of oil.

The pipeline company TransCanada, which first applied for permission to build the pipeline in 2008, expressed frustration Friday at the latest delay.

“Canadian oil will make its way to market with or without Keystone XL. It is in everyone’s best interests that this project move forward,” said TransCanada President Russ Girling.

Canada’s energy producers already have dramatically increased their ability to ship crude oil by rail. According to an analysis this week by Peters & Co., a Calgary investment firm, Canadian railways are moving 550,000 barrels a day and might surpass 1 million by year’s end. Keystone XL’s proposed capacity, in comparison, is 830,000 barrels a day.

The State Department, which is leading the project review because it would cross the border with Canada, issued its final environmental assessment in January and downplayed the impact on climate change.

Other federal agencies are supposed to weigh in by May, but State Department officials said Friday that agencies couldn’t evaluate the project if they didn’t know what route it would take through Nebraska.

A Nebraska judge in February struck down a law that let the governor bypass the state Public Service Commission and approve the pipeline route through his state. Officials in the state are appealing the ruling to the Nebraska Supreme Court, a process that might take several months or even a year to resolve.

Energy analyst Kevin Book said the legal issues in Nebraska gave the president a logical rationale for delaying the decision and that the move dramatically increased the chances that it wouldn’t be settled before the election. Book said he thought the president would eventually approve the pipeline, a move that would incur the wrath of environmental activists going into an election that’s vital for the Democrats.

Environmental groups praised the postponement Friday.

“The State Department is taking the most prudent course of action possible. It is already clear that the Keystone XL tar sands pipeline fails the climate test and will damage our climate, our lands and our waters,” said Susan Casey-Lefkowitz, the director of the international program at the Natural Resources Defense Council.

Curtis Tate contributed to this story.

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