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Nov 2, 2015 10:52 PM

TransCanada asks US to suspend pipeline application review

The Associated Press

TORONTO (AP) TransCanada, the company behind the controversial Keystone XL pipeline from Canada to the U.S Gulf Coast, has asked the U.S. State Department to pause its review of the project. The move comes as the Obama administration increasingly appears likely to reject the pipeline permit application before leaving office in January 2017.

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

"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 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 process and instead can continue the review process.

The White House declined to comment, referring all questions to the State Department.

Ahead of TransCanada's announcement Monday, White House spokesman Josh Earnest said President Barack Obama intended to make a decision on the pipeline before his presidency ends in January 2017, although he declined to elaborate on the timeline. Hillary Rodham Clinton and her main challengers for the Democratic nomination are already on record as opposing it. All of the leading Republican presidential candidates support the pipeline.

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.

"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 350.org.

Jane Kleeb, executive director of the group Bold Nebraska, which opposes the pipeline project, also said TransCanada is only asking for a pause because they hope a Republican president will approve the pipeline.

For seven years, the fate of the 1,179-mile (1,900-kilometer) long pipeline has languished amid debates over climate change and the intensive process of extracting Alberta's oil and U.S. energy security

Keystone has long been a flashpoint in the U.S. debate over climate change. Critics oppose the concept of tapping 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.

TransCanada spokesman Mark Cooper denied that the request for a pause in the review has anything to do with an expected rejection of the pipeline application by the Obama administration but acknowledged they "have been hearing since Feburary the same rumors that a denial or a decision is imminent."

"Our focus remains on continuing to demonstrate the project is in the interest of the United States," Cooper said. "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 declined to make TransCanada chief executive Russ Girling available for an interview but noted the company reports its earnings on Tuesday and said the CEO will take questions then. Until recently, it would have been unimaginable for the Calgary, Alberta-based company to ask for a delay.

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.

Ricketts declared his support for TransCanada's decision announced last month to shift course in Nebraska and seek new approval from the state Public Service Commission, an elected five-member group that oversees most pipelines.

Former Gov. Dave Heineman approved a Nebraska route for Keystone XL in 2013 after a review by the state Department of Environmental Quality. But the 2012 law that gave him the power to do so has been challenged by landowners in court, preventing the project from moving forward within the state.

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 barrels of crude oil a day 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 percent of its energy exports. Alberta has the world's third largest oil reserves, with 170 billion barrels 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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