Faced with dimming prospects for approval, the Canadian company behind the proposed Keystone XL pipeline chose to plead with the US government for a delay on its fate, signaling that prolonged uncertainty is preferable to rejection of the $8 billion project.
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Earlier Monday, White House press secretary Josh Earnest said that “our expectation at this point…is that the president will make a decision before the end of his administration on the Keystone pipeline, but when exactly that will be I don’t know at this point”. Keystone XL would carry heavy crude oil from Alberta to Nebraska and on to Gulf Coast refineries, and has become the symbolic heart of a struggle between environmentalists opposed to oil sands development and defenders of fossil fuels.
A few have described the request as a tactical move by TransCanada that would delay the approval process until a new U.S. President took office.
On Tuesday, the Obama administration said it was still reviewing TransCanada’s request, which came in the form of a letter addressed to Secretary of State John Kerry.
This afternoon the White House weighed in and President Obama still has the ability to kill the project, and apparently plans to make a decision before leaving office.
The request for a suspension came just before Justin Trudeau of the Liberal party takes power as Prime Minister of Canada on Wednesday.
The pipeline has been in the works since 2008, and must receive approval from the State Department because it would cut across the U.S.-Canada border.
In the past year a global rout has slashed oil prices by more than 60 percent, prompting drillers to curtail spending and rein in new projects.
The price of oil has plummeted dramatically since the pipeline was proposed, and the oil industry has pulled back from many large projects. While Democratic candidates, including front-runner Hillary Rodham Clinton, oppose the project, Republican candidates support it. They claim transporting crude oil by railways is hazardous when compared to pipelines. “In order to allow time for certainty regarding the Nebraska route, TransCanada requests that the State Department pause in its review of the Presidential Permit application for Keystone XL”.
In a statement Monday, TransCanada said it would be “appropriate” for Kerry to suspend the current review of the Keystone proposal as Nebraska’s public service commission deliberates over the pipeline’s route.
The Keystone pipeline in Nebraska during 2009.
Asked whether he feared Obama would reject Keystone XL, Girling said bluntly: “No”.
“For risk-averse companies, in many ways knowing that cheap transportation is available is more important than a sense of where oil prices are today”, he said. “We would like to finish this review process as swiftly as possible”.
Wall says he assumes TransCanada is doing what it deems best for the future of the project.
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TransCanada first applied for a permit in September 2008. Trudeau, who is expected to meet Obama later this month at a Group of 20 summit in Turkey, has emphasized the need for Canada to boost its environmental performance to win favor for pipeline proposals, including Keystone. He also said pipelines are a cheaper option than moving oil by rail, a method of transportation that’s been increasingly used because of a lack of pipelines.
