The State Department confirmed yesterday that a rerouting of a controversial oil pipeline was "under review," a prospect that could delay or even kill the Keystone XL project.

At a press briefing, department spokesman Mark Toner was pressed repeatedly about the possibility of rerouting Keystone XL after a Reuters story reported yesterday that the department was considering an alternative pathway for the pipeline, which would run from Canada to the Gulf Coast if constructed. Toner said "no decision has been made whatsoever," but also indicated that everything was "on the table."

The rerouting issue is critical for the 1,700-mile Keystone XL because any change in the pipeline's current path would require an entirely new environmental review process by the federal government that could take years. That in effect could kill the project because a delay would threaten existing oil shipping agreements between TransCanada and refineries expecting oil to flow by a certain date.

Toner said the department was seriously reviewing all issues that came up during public hearings earlier this year in six states, where rerouting was debated thoroughly. The issue is especially pressing in Nebraska, where opponents have raised concerns about the pipeline's path over the Ogallala Aquifer, a major drinking and irrigation water source.

"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," said Toner when asked directly yesterday about a reroute.

Toner also hinted further that a final decision on a cross-border permit for TransCanada's Keystone XL may not come until next year, and said that the possibility of rejecting the pipeline is "always something that's under consideration."

"We're not going to hurry or make a hasty decision based on our official deadline," he said.

The Nebraska factor

Any significant delay would have an impact on TransCanada's customers, which would then have to decide whether they want to "stay with this project or not," TransCanada spokesman Terry Cunha told ClimateWire yesterday.

"If Keystone XL dies, Americans will still wake up the next morning and continue to import 10 million barrels of oil a day," he said. Much of that oil would flow from repressive nations, he said.

Pipeline supporters also are facing pressure from Nebraska, where state lawmakers continue a special session on oil pipelines. One of the bills that is gaining traction -- from state Sen. Ken Haar -- would prohibit the building of pipelines in the Sandhills region of the state and could directly affect Keystone XL if passed.

"Other senators are saying that Haar's bill makes sense," said Paul Landow, a political science professor at University of Nebraska, Omaha. At the same time, he said it was "wide open" what state lawmakers might do and unclear whether lawmakers were engaging in political "posturing."

If Haar's bill doesn't make out of committee, it could be added as an amendment, he said.

However, the bill that moved out of a legislative committee last night was not Haar's, but one from Sen. Chris Langemeier that would kick authority over pipeline siting back to the governor. Gov. Dave Heineman (R) has said he supports a reroute of Keystone XL, but has not offered his own bill during the session.

Environmentalists have been attacking the project -- including at several protests at the White House -- partially because it would carry a type of oil that is more carbon-intensive to produce than other forms. Supporters say it would create jobs and boost national security.

Several environmentalists said yesterday that any proposed rerouting of the pipeline -- if State decided to move forward with that option -- would not stop protests against Keystone XL. A rerouting would not end concerns about climate change, considering that the oil produced in Canada releases more carbon dioxide in the production process than other forms of oil, they said.

"You're not going to hear diminishing of the clamor," said Damon Moglen, an analyst at Friends of the Earth, about the possibility of a reroute. Instead, it would be like the State Department "opening a piñata" and acknowledging the project's problems, he said.

Meanwhile, business leaders supporting so-called alternative projects to Keystone XL are speaking out about what the Keystone XL debate means for their proposals.

Discussions about alternative routes

Yesterday, CEO Patrick Daniel of Enbridge said his company was in "discussions" with oil shippers for two proposed oil pipelines that would carry oil from Chicago to the Gulf Coast. The proposals -- known as Flanagan South and Wrangler -- have "significant commitments," he said on a conference call.

But he also said the discussions were still in the preliminary stage and said it was not clear how much volume those pipelines would carry amid the current debate.

Flanagan South and Wrangler are two of the most likely Keystone alternatives out there, said Danielle Droitsch, a senior attorney at the Natural Resources Defense Council. For one thing, they would not require a cross-border permit, since they would not be carrying oil directly from Canada, but rather moving existing oil-sands crude already coming into the United States from Alberta.

Even though the projects would not be a "superhighway" of oil like Keystone XL, they still could send a "troubling" signal to increase oil-sands production in Alberta, said Droitsch.

There are multiple other options than Keystone XL, including proposals to carry oil-sands crude across western Canada to ports in British Columbia, where the fuel could head to Asia (ClimateWire, July 25).

One of the main proposals -- Enbridge Gateway -- is facing opposition in Canada from First Nation groups, said Droitsch. Gateway and another across-Canada option that would expand capacity along an existing pipeline route to Vancouver are not as far along in the review process as Keystone XL.

"They are 10 to 15 years away at least," said Droitsch.