Final US-Canada oil pipeline decision months away

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Associated Press

Posted on January 23, 2013 at 9:05 AM

Updated Wednesday, Jan 23 at 12:01 PM

WASHINGTON (AP) — A key approval of a revised route for the Keystone XL oil pipeline from Canada to the U.S. Gulf Coast puts the long-delayed project back in the hands of the U.S. government.

But don't look for a quick decision on the $7 billion project overall.

State Department officials said they do not expect to complete a review of the much-debated project before the end of March. Their approval is needed because the project crosses an international border. Nebraska Gov. Dave Heineman's decision Tuesday on an alternate route was just one step along the way.

"I think we need to let our folks continue to do the work that they're doing," State Department spokeswoman Victoria Nuland said Tuesday. "I think we obviously want to take the Nebraska environmental study, we want to compare it with the work that we've done ... and crunch it into our own work."

The Obama administration has twice blocked the 1,700-mile (2,735-kilometer) pipeline, which Calgary-based TransCanada first proposed in late 2008. The project was thwarted after environmental groups and others raised concerns about a proposed route through environmentally sensitive land in Nebraska.

Under pressure from congressional Republicans, President Barack Obama blocked the pipeline in January 2012, saying his concerns about the Nebraska route had not been resolved. TransCanada submitted a new application last spring.

Canadian officials welcomed Heineman's action and urged Obama to approve the project.

"As we have repeatedly said, the Keystone XL Pipeline will create thousands of jobs on both sides of the border — including 140,000 in Canada," said Andrew MacDougall, a spokesman for Canadian Prime Minister Stephen Harper.

House Speaker John Boehner said Heineman's decision leaves Obama with no other choice but to approve the pipeline, which would carry up to 800,000 barrels of oil a day from tar sands in western Canada to refineries in Houston and other Texas ports. The pipeline also would travel though Montana, South Dakota, Nebraska, Kansas and Oklahoma.

"Nebraska's approval of a new Keystone XL pipeline route means there is no bureaucratic excuse, hurdle or catch President Obama can use to delay this project any further," Boehner said.

Boehner said all six states along the proposed route now support the project, which also is backed by a bipartisan coalition in Congress. Polls show a majority of Americans also back the pipeline.

Boehner said he recognizes the political pressure Obama faces from environmental groups and others who oppose the project, but he said, "with our energy security at stake and many jobs in limbo, he should find a way to say yes."

White House spokesman Jay Carney said the State Department was reviewing the project and he did not want to "get ahead of that process."

Once that review is completed, "we'll obviously address that issue," Carney said Tuesday.

Environmental groups have been pressuring Obama to reject the pipeline, which they say would transport "dirty oil" and produce heat-trapping gases that contribute to global warming. They also worry about a possible spill.

Jane Kleeb, a pipeline opponent, said Heineman "just performed one of the biggest flip-flops that we've seen in Nebraska political history."

Even as they cheered Obama's vow during his inaugural address to respond to climate change, some of the president's strongest supporters say they fear his legacy on the issue could be damaged if he approves the pipeline.

"If we are going to get serious about climate change, opening the spigot to a pipeline that will export up to 830,000 barrels of the dirtiest oil on the planet to foreign markets stands as a bad idea," said Anthony Swift of the Natural Resources Defense Council.

Sen. Barbara Boxer, chairwoman of the Senate Environment Committee, said approval of the pipeline would "undo" much of the good on climate Obama achieved by sharply raising fuel-economy standards for cars and trucks.

"If he did that plus 17 other good things" her concerns might be lessened, Boxer said Tuesday. "It depends. It's such a dirty pipeline."

Heineman had previously said he would oppose any pipeline route that endangered the Ogallala Aquifer, a massive groundwater supply for much of the Midwest.

In a three-page letter to federal officials Tuesday, Heineman said he believes any spills along the new route would be localized and cleanup responsibilities would fall to TransCanada. He also said the project would result in $418.1 million in economic benefits for the state, plus $16.5 million in state tax revenue from the pipeline construction materials.

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Follow Matthew Daly on Twitter: https://twitter.com/MatthewDalyWDC

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