U.S. further delays final decision on Keystone XL pipeline

(Reuters) – The Obama administration further delayed its decision on the controversial Keystone XL pipeline project on Friday, with no conclusion now likely until after the U.S. mid-term elections in November.

President Barack Obama has said he will have the final say on whether to allow the pipeline connecting Canada’s oil sands region to Texas refiners, and several government agencies had been given until May to weigh in. This had raised expectations of a final decision by mid-year.

But the State Department said on Friday it was extending that agency comment period, citing a need to wait until the Nebraska Supreme Court settles a dispute over what path the $5.4 billion TransCanada Corp project should take.

“That pipeline route is central to the environmental analysis for the project and if there are changes to the route it could have implications,” a senior State Department official told reporters.

The legal process will likely continue past November and might stretch into next year, meaning more delays for the politically-charged issue that has been on the drawing board for more than five years.

By linking Canadian fields to refiners in the Gulf Coast, the 1,200-mile (1,900-km) pipeline would lift an energy patch where heavy oil is abundant but that is reached only by burning vast amounts of fossil fuels.

The oil industry agues projects like Keystone can reduce the United States’ reliance on Middle East oil while partnering with one of the country’s closest political allies, Canada.

Delaying Keystone means “the United States will continue to rely on suspect and aggressive foreign leaders for the eight to nine million barrels of oil that is imported every day,” TransCanada Corp chief executive Russ Girling said.

But Keystone opponents – among them environmentalists who make up a part of Obama’s political base – say consuming carbon fuel to wrench oil sands crude from the ground will worsen climate change and the pipeline meant to carry up to 830,000 barrels a day will only spur more production.

They expect Obama to reject the project and so fulfill a commitment to battling climate change.

OBAMA’S OWN PARTY

Stakes in the dispute have increased as Obama leads his party into the mid-term elections. Republicans, seeking to bolster their hold over the House of Representatives and take control of Congress by winning a majority in the Senate, have portrayed Obama as depriving Americans of thousands of jobs by delaying the decision.

“Clearly he wants to get this past the mid-terms,” said Senator John Hoeven, a Republican of North Dakota, of the fresh delays. “I’m not convinced that’s a good strategy. Because people are going to see it for the political decision that it is.”

Environmentalists were heartened by Friday’s move, which they said left more time to mobilize public opposition.

“Millions of Americans have taken a stand against Keystone, and my hope is that’s making the Obama administration think twice,” said Bill Snape of the Center for Biological Diversity which helped organize a share of the 2.5 million comment letters received by the State Department.

Read more:  http://www.reuters.com/article/2014/04/18/us-usa-keystone-idUSBREA3H0LY20140418

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