Obama officials to delay Keystone pipeline decision, likely until after election

The Obama administration will announce Thursday that it is reevaluating the route of the proposed Keystone XL pipeline, a move that will likely delay a final decision on the project until after the election, sources briefed by the administration said.

TransCanada Corp.’s Keystone XL pipeline would carry oil sands crude from Alberta, Canada, to refineries in Texas. The proposed pipeline has set off a firestorm in Washington, with critics raising environmental concerns and proponents arguing the project will boost the economy.

{mosads}Sources briefed by the administration said the decision to consider a new pipeline route would likely delay a final decision on the pipeline until after the election. The administration initially planned to make a decision on the project by the end of the year, but the State Department recently acknowledged that the timeline could slip.

The delay puts off a politically volatile decision for President Obama, who faces competing pressures on the project. The president said in a statement released by the White House that he supported the State Department decision.

“Because this permit decision could affect the health and safety of the American people as well as the environment, and because a number of concerns have been raised through a public process, we should take the time to ensure that all questions are properly addressed and all the potential impacts are properly understood,” Obama said. 

“At the same time, my administration will build on the unprecedented progress we’ve made towards strengthening our nation’s energy security, from responsibly expanding domestic oil and gas production to nearly doubling the fuel efficiency of our cars and trucks, to continued progress in the development of a clean energy economy.”

The State Department’s inspector general announced this month that it’s office will undertake a “special review” of the pipeline proposal.

Major business and oil industry groups are pushing hard for approval, calling the project vital to boosting energy security and casting it as a major job-creator during the sour economy.

The delay drew tough words from the Consumer Energy Alliance, a coalition of oil companies and groups representing energy consuming industries, such as chemical manufacturing and trucking.

“America wants to get back to work, and arbitrary bureaucratic delays like today’s decision to delay Keystone XL mean that hardworking men and women in this country will have to wait even longer to find jobs,” said Michael Whatley, the group’s president.

But the Keystone XL pipeline faces major opposition from environmental activists, who have sought to ratchet up political pressure on Obama to reject the project. Killing Keystone has shot to the top of green groups’ agendas.

Senior officials with the Sierra Club and the League of Conservation Voters have explicitly warned that approval would sap green-minded voters’ appetites to knock on doors and conduct other work on Obama’s behalf next year. 

Critics have concerns about greenhouse gas emissions from oil sands production and the potential for oil spills.

Environmental groups want the project killed, not just delayed. But the decision nonetheless provides at least a partial victory for activists, who suffered a bitter defeat two months ago when Obama scuttled upcoming smog regulations.

One Capitol Hill critic of the project, echoing environmental groups, called for Keystone XL to be scuttled, not just delayed.

“The catastrophic environmental risks of this proposed pipeline dictate the project be rejected, not delayed. I look forward to a swift and thorough investigation by the inspector general into the State Department’s review process,” Rep. Peter Welch (D-Vt.) said in a statement.

Keystone opponents have staged two major protests at the White House in recent months.

Organizers of the protests argued Thursday that the delay is an indication of the administration’s reservations about the project. But they called on Obama to ultimately reject the pipeline even if the State Department determines a new route.

“The president should know that nothing that happened today changes our position — we’re unequivocal in our opposition,” 350.org founder Bill McKibben said in a statement. “If this pipeline proposal re-emerges from the review process intact we will use every form of nonviolent civil disobedience to keep it from ever being built.”

The pipeline route faces major opposition in Nebraska. The state’s governor, Dave Heineman (R), has called a special session of the state’s Legislature to consider legislation aimed at rerouting the proposed pipeline route.

The pipeline would cross part of Nebraska’s Ogallala Aquifer, a key source of drinking water and irrigation that pipeline critics say faces major threats of contamination from a spill.

Heineman urged Obama in August to reject the pending permit application for the pipeline, raising concerns about the proposed route.

At Thursday’s State Department daily press briefing, spokesman Mark Toner declined to confirm reports of an upcoming Keystone announcement.

“I’ve seen some of those press reports,” Toner said. “We don’t have anything to announce at this time.”

During Wednesday’s briefing, Toner said that rerouting the pipeline is one of a number of possibilities the State Department is considering.

“It’s one of many issues that we have discussed that were raised during these public hearings that we held, and all of those issues are currently under review as we move forward,” Toner said.

He noted the department is reviewing a broad range of issues.

“We’re looking at environmental issues, energy security, jobs and economic impact and foreign policy. So I would just say that all those issues within those subsets, I think, are on the table and being considered as we move forward,” he said.

TransCanada spokesman Terry Cunha said in an email Thursday that the company is not aware of any announcement, and noted that press accounts have been citing unnamed sources.

“When we hear from a named source on the record, we will comment specifically. Until that happens, our understanding is the Department of State is following a process it outlined last spring — to work toward a decision on a presidential permit by year end,” Cunha said.

“In that process, State outlined in its Final Environmental Impact Statement a preferred route, based on 14 route options and three years of review. We have not been informed of any changes on this front as well,” Cunha added.

—This story was originally posted at 12:50 p.m. and has been updated.