In major move, TransCanada asks to halt federal permitting

By Manuel Quiñones | 11/03/2015 06:52 AM EST

In a major new twist, TransCanada Corp. yesterday asked the Obama administration to pause its roughly 7-year-old and highly contentious permitting process for the Keystone XL oil pipeline.

The development, which could delay the final decision on the controversial pipeline and put it into the hands of the next president, sent supporters and opponents of the project into a new phase of advocacy, with both sides in high warble over the company’s announcement.

The company, which wants permission to transport Canadian oil sands crude from Alberta into the United States, pointed to uncertainty with the pipeline’s route through Nebraska in explaining its request.

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"In order to allow for certainty regarding the Nebraska route, TransCanada requested that the State Department pause in its review of the Presidential Permit application for Keystone XL," TransCanada executive Kristine Delkus wrote to Secretary of State John Kerry.

"This will allow a decision on the Permit to be made later based on certainty with respect for the route of the pipeline," Delkus wrote.

In recent weeks, TransCanada stunned pipeline supporters and opponents by dramatically shifting its Nebraska strategy. Rather than rely on a governor-issued permit, the company asked the state’s Public Service Commission to review the project.

TransCanada lobbied hard for the law allowing the governor to bypass the PSC and celebrated a state hard-fought Supreme Court victory this year. That victory, however, came on a technicality and allowed landowners opposed to KXL going through their land to continue challenging the law’s constitutionality (EnergyWire, Sept. 30).

TransCanada CEO Russ Girling said the new permitting process in the Cornhusker State could take between seven months to a year. He said it makes sense for the State Department to halt its review.

"I note that when the status of the Nebraska pipeline route was challenged last year, the State Department found it appropriate to suspend its review until that dispute was resolved," said Girling. "We feel under the current circumstances a similar suspension would be appropriate."

The State Department is reviewing and has not made a decision on the company’s request.

Sen. John Hoeven (R-N.D.), one of KXL’s top defenders on Capitol Hill, said TransCanada’s decision stemmed from the administration’s own shortcomings.

"It is clear President Obama was going to deny the permit," he said. "The costly delay has prevented the company from proceeding on a new pipeline that would have brought oil from Canada and the Bakken [oil-producing region] to U.S. refineries and jobs and revenue to local communities."

Energy and Natural Resources Chairwoman Lisa Murkowski (R-Alaska) struck a similar note. "Today’s request by TransCanada doesn’t change the fact that President Obama deliberately chooses to put arbitrary delays on this vital energy infrastructure project," she said.

Some TransCanada critics have said the company is trying to buy time. The delay, if State agrees, could take the issue into the next administration.

Even though Republican candidates have all backed KXL, leading Democratic contender Hillary Clinton has come out against the project, and so have her party rivals.

Environmental advocates and other pipeline foes are asking the administration to make up its mind on KXL rather than continue delaying the process.

"Suspending the Keystone XL permit application at this point would be absurd," said Tiernan Sittenfeld, the League of Conservation Voters’ government affairs senior vice president. "This is nothing more than another desperate and cynical attempt by TransCanada to build their dirty pipeline someday if they get a climate denier in the White House in 2017."

Jane Kleeb, founder of opposition group Bold Nebraska, said, "The route in Nebraska has been uncertain for years, the only difference now is TransCanada knows they are about to have their permit rejected so they are scrambling."

And Bill McKibben, founder of the group 350.org, called the developments a victory for greens and defeat for KXL. "Clearly TransCanada has lost and they recognize that," he said. "It’s one of the great victories for this movement in decades."

The only steps remaining in federal permitting for KXL is for State to finish its national interest review and Kerry to make a recommendation to the president.

White House spokesman Josh Earnest said yesterday, before TransCanada’s news broke, that Obama would make a decision on KXL before the end of his term but that it might not come anytime soon.

Supporters and opponents of the project saw the recent Canadian elections as a potential milestone in the seven-year permitting process. The project was a talking point during the campaign.

But Earnest, when asked about the timing of a KXL decision following a Liberal Party victory north of the border, declined to offer any specifics and pointed to the State Department, which has also declined to comment.

"Our expectation at this point is that the president will make a decision before the end of his administration on the Keystone pipeline, but when exactly that will be I don’t know at this point," said Earnest.

Asked whether it could happen this year, Earnest said, "It’s possible. It’s also possible it could happen next year."

Canadian Liberal Party head and newly elected Prime Minister Justin Trudeau supports the Alberta-to-U.S. project, but he has not made it a centerpiece of his agenda (Greenwire, Oct. 20).