TransCanada Asks US to Suspend Pipeline Application Review

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Rob Gilles

TORONTO (AP) — After waiting seven years for a decision, the company behind the proposed Keystone XL pipeline from Canada to Texas has asked the U.S. State Department to suspend its review of the project. The move comes as the Obama administration increasingly appeared likely to reject the pipeline permit application.

TransCanada said Monday it had sent a letter to Secretary of State John Kerry requesting that the State Department suspend its review of the pipeline application. Until recently, it would have been unimaginable for the Calgary, Alberta-based company to ask for a delay.

Some pipeline opponents contend that TransCanada hopes to delay the review process in hopes that a more sympathetic Republican administration will move into the White House in 2017 and approve it.

The State Department review is mandated as part of the application process because the $8 billion pipeline crosses an international border. The State Department does not have to grant TransCanada’s request for a pause in the review and instead can continue the process.

“We have just received TransCanada’s letter to Secretary Kerry and are reviewing it. In the meantime, consideration under the Executive Order continues,” State Department spokeswoman Elizabeth Trudeau said.

The White House declined to comment.

Prior to TransCanada’s announcement Monday, White House spokesman Josh Earnest said President Barack Obama intended to make a decision on the pipeline sometime before his presidency ends in January 2017.

Hillary Rodham Clinton and her main challengers for the Democratic presidential nomination are already on record as opposing Keystone. All of the leading Republican presidential candidates support the pipeline.

“In defeat, TransCanada is asking for extra time from the referees, and clearly hoping they’ll get a new head official after the election. It’s time for the current umpire, President Obama, to reject this project once and for all,” said environmental activist Bill McKibben, co-founder of the group

TransCanada spokesman Mark Cooper denies the suspension was intended to avoid having approval for the pipeline denied by the Obama administration.

“Our focus isn’t on the political machinations of what this president may or may not do or who may be in office a year from now,” Cooper said.

TransCanada said it would hold a conference call with reporters to discuss the issue.

The company said such a suspension would be appropriate while it works to secure approval of its preferred route through the Nebraska in the face of legal challenges. TransCanada anticipated it would take seven to 12 months to get route approval from Nebraska authorities.

The 1,179-mile pipeline has long been a flashpoint in the U.S. debate over climate change. Critics oppose the pipeline which would transport oil tapped from the Alberta oil sands, saying it requires huge amounts of energy and water and increases greenhouse gas emissions. They also express concern that pipeline leaks could potentially pollute underground aquifers that are a critical source of water to farmers on the Great Plains.

Pipeline supporters maintain it will create jobs and boost energy independence. They also say pipelines are a safer method of transporting oil than trains, pointing to recent cases of oil train derailments.

Nebraska Gov. Pete Ricketts reiterated his support for Keystone in a statement issued by his spokesman Taylor Gage.

“The Governor has been clear … that it will be the safest pipeline built yet in our state, and that it will bring good-paying jobs and property tax revenue to Nebraska’s counties,” it said.

Both North Dakota senators, Democrat Heidi Heitkamp and Republican John Hoeven, criticized the Obama administration’s long delay in approving the pipeline.

Hoeven said it’s “clear” that the administration intends to deny the pipeline permit, which he claimed would have “a chilling effect on the willingness of other companies to invest in important energy infrastructure projects in the United States.”

TransCanada announced the project in 2008, which has undergone repeated federal and state reviews. The pipeline would be built from Canada through Montana, South Dakota and Nebraska, where it would connect with existing pipelines to carry more than 800,000 bpd of crude oil to refineries along the Texas Gulf Coast.

Delays in approving the pipeline have caused friction between the U.S. and the outgoing Canadian Conservative government of Prime Minister Stephen Harper. Harper was frustrated by Obama’s reluctance to approve the pipeline and the issue damaged U.S-Canada relations. Although incoming Liberal Prime Minister Justin Trudeau, who is sworn in Wednesday, supports Keystone, he argues relations with the U.S. should not hinge on the project.

Canada needs infrastructure in place to export its growing oil sands production. Canada relies on the U.S. for 97% of its energy exports. Alberta has the world’s third largest oil reserves, with 170 Bbbls of proven reserves. But a sharp decline in the price of oil makes many of the new oil sands projects less viable.

Associated Press Writer Matthew Daly in Washington and Grant Schulte in Lincoln, Nebraska, contributed to this report.

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