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Hold Requested for Keystone XL Permit

Wednesday, November 4, 2015

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Said to be anticipating a rejection of its application by the Obama administration, the company looking to build the Keystone XL pipeline has asked the U.S. State Department to put its permit request on hold.

This move by North American Energy company TransCanada will likely put the project in stasis until after the 2016 U.S. presidential elections, the Wall Street Journal reported Monday (Nov. 2).

iStock.com / tibu
© iStock.com / tibu

TransCanada, the company looking to build the Keystone XL pipeline (not shown), asked the U.S. State Department on Monday (Nov. 2) to put its cross-border permit request on hold.

In a letter to Secretary of State John Kerry asking to for the suspension, the company pointed to an ongoing dispute related to its proposed route through Nebraska.

“We are asking State to pause its review of Keystone XL based on the fact that we have applied to the Nebraska Public Service Commission for approval of its preferred route in the state,” Russ Girling, TransCanada’s chief executive officer, said in a statement reprinted by The Guardian.

“I note that when the status of the Nebraska pipeline route was challenged last year, the State Department found it appropriate to suspend its review until that dispute was resolved,” he added. “We feel under the current circumstances a similar suspension would be appropriate.”

Some, however, perceive the delay as a means to avoid a final rejection from President Obama, anticipating better prospects if a Republican president is elected in 2016, according to Reuters coverage.

Additionally, low oil prices are said to be reducing both the sense of urgency and interest in Canada’s oil reserves as related to the pipeline project.

A Strategic Move?

Observers noted a change in TransCanada’s strategy in September when it halted legal efforts to seize land for the pipeline’s path through Nebraska and submit to the state review process, which it is said to have avoided for years.

At that time, the company anticipated such an action would sufficiently prolong the permit review process, while it established a new route in the state, into the next—preferably Republican—presidential administration, the Journal reported.

According to The Guardian, TransCanada anticipated the Nebraska Public Service Commission would take seven to 12 months to issue its decision on the pipeline’s path.

iStock.com / asterix0597
© iStock.com / asterix0597

According to insiders, the State Department was nearing the end of its review process, and a rejection of the application was expected as early as this week, prompting the suspension request.

According to insiders, however, the State Department was nearing the end of its review process, and a rejection of the application was expected as early as this week, prompting the suspension request.

“The route in Nebraska has been uncertain for years, the only difference now is TransCanada knows they are about to have their permit rejected, so they are scrambling,” Jane Kleeb, executive director of Bold Nebraska, which is fighting the project, told the Journal.

The U.S. State Department, the body that reviews cross-border pipelines, confirmed receipt of the letter, but a spokesperson indicated the permit application review would continue for the time being, Reuters reported.

Political Uncertainty

In the U.S., the Keystone XL project is one that is split by party lines: all Democratic presidential candidates are against it (Hillary Clinton made her opposition public in September), while all Republican candidates are for it.

In February, Obama used his veto authority to block a Republican bill that would have advanced the seven-year-old pipeline proposal, effectively keeping the project on hold.

Obama’s interests are reported to be in moving away from fossil fuels and fighting climate change. Reports say he feels the pipeline would create few new jobs and has voiced doubts that it would lower fuel prices.

Meanwhile, Republicans tout the project as a job creator that would bring revenue to local communities.

Political parties in the U.S. aren’t the only ones affecting the outlook of the pipeline project.

Canada recently elected a new prime minister from the Liberal party, Justin Trudeau, ousting former Conservative Prime Minister Stephen Harper, who was a strong supporter of the Keystone pipeline.

Trudeau is said to give “cautious backing” to the project, asking for vigilance on environmental concerns. Reports have also said he does not want his stance on the project to hamper U.S.-Canada relations.

Keystone XL

The $8 billion Keystone XL pipeline is a nearly 1,700-mile cross-border pipeline intended to carry heavy crude oil from Alberta’s tar sands to the Texas Gulf Coast refineries by way of Nebraska, where it would hook up to existing pipelines.

Crossing six states, it is anticipated to transport as many as 830,000 barrels of oil a day.

TransCanada first sought its permit in September 2008 and has been facing opposition both from environmentalists and landowners since then.

The company has already invested about $2.5 billion in the project.

The 875-mile segment of line from Alberta to Steele City, NE, requires a Presidential Permit to cross the U.S.-Canadian border.

   

Tagged categories: Government; North America; Oil and Gas; Pipeline; Program/Project Management

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