Obama admin announces further delay for pipeline project

This story was updated at 4:06 p.m. EDT.

The Obama administration today delayed a final decision on the Keystone XL pipeline until an ongoing court challenge to its route in Nebraska is resolved, all but guaranteeing that the controversial project will remain in limbo until after the November midterm elections.

Speculation about a possible postponement spread like brushfire around Washington, D.C., on Good Friday as the State Department, nearly at the end of a 90-day interagency consultation period on the $5.4 billion oil sands crude pipeline, set up a call with congressional staff to discuss its KXL review. When State officially announced the delay, it emphasized that the multi-stage review of the Canada-to-U.S. oil link "is not starting over" and would resume with 14 days remaining for other federal agencies to weigh in once the Cornhusker State uncertainty is resolved.

"Agencies need additional time based on the uncertainty created by the on-going litigation in the Nebraska Supreme Court which could ultimately affect the pipeline route in that state," the State Department announced.

A Nebraska district court two months ago struck down a state law crafted to give Republican Gov. Dave Heineman ultimate power to approve a new route for KXL that its sponsor, TransCanada Corp., bills as avoiding the environmentally sensitive Sand Hills region (E&ENews PM, Feb. 19). The Nebraska attorney general promptly appealed that decision, which the state Supreme Court will hear later this year, but a final ruling in the case is not expected until late this year and could come as late as January 2015.


But a senior State Department official, briefing reporters this afternoon under condition of anonymity, declined to rule out the possibility that a border-crossing permit decision could come before the Nebraska court process concludes.

"We don't want to exclude the possibility ... that there may be ways of getting a better understanding of what that [new KXL] route might be" in advance of a high court ruling, the official said.

Republicans and the pipeline's congressional Democratic supporters, including Senate Energy and Natural Resources Chairwoman Mary Landrieu of Louisiana, lambasted the latest KXL delay this afternoon. Yet KXL fans' claim that the administration rolled out the latest delay in an attempt to avoid alienating environmentalists before Election Day does not take into account what legal experts say is the very real risk that approving the pipeline without a settled route in Nebraska risks stalling it further in the final analysis.

"I would wait," Daniel Mandelker, professor at the Washington University School of Law and expert on the National Environmental Policy Act (NEPA), said in an interview this week. "I wouldn't try to do anything now because if there is a change of route [in Nebraska] it'll change everything."

If the State Department pushed ahead in approving the pipeline before a route change and did not order a supplemental environmental impact statement (EIS) under NEPA, Mandelker added, "then someone will sue them."

William Buzbee, director of the Environmental and Natural Resources Law Program at Emory University, also warned this week that further NEPA-based analysis might be necessary should the Nebraska court case force any further changes to KXL's path.

"As Nebraska goes back to the drawing board, would there be substantially changed sorts of effects and environmental risks?" he wondered. "That, we don't know."

What is known, however, is the eagerness of Republicans to slam President Obama for his State Department's five-year-plus consideration of a project that their party views as a job-creating enhancement of U.S. energy ties with a stable neighbor in Canada.

"It's shameful that as we begin spring construction season, that hundreds of my constituents will be denied an opportunity to go to work on a project that will help secure America's energy future solely because the President wants to placate his political base in an election year," Rep. Lee Terry (R-Neb.), one of the pipeline's most active congressional backers, said in a statement this afternoon.

Environmentalists who have long worked to defeat KXL on climate grounds, due to the higher carbon footprint of the 700,000-plus barrels of Canadian oil sands crude it would carry, largely hailed today's decision as a step toward the eventual White House rejection that they hope will greet the pipeline. But not every climate activist was prepared to cheer.

"The #noKXL movement delays the Keystone pipeline again & Obama delays his climate legacy by kicking the can down the road," Phil Aroneanu, a co-founder of prominent green group, wrote on Twitter this afternoon, using the social media site's preferred abbreviation for anti-pipeline forces.

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