WH: Obama Will Rule On Keystone XL Before He Leaves Office

A further delay or outright rejection of the TransCanada Keystone XL project risks a looming capacity crunch on Western Canada’s pipeline network, causing more pain for producers already struggling with weak global crude prices.

Well, in their letter to the US State Department tonight, TransCanada says they are asking for their permit to be put on hold while they try to resolve a dispute with the state of Nebraska over the pipeline.

PRESIDENT BARACK OBAMA: We’re not going to authorize a pipeline that benefits largely a foreign company, if it can’t be shown that it is safe and if it can’t be shown that, overall, it wouldn’t contribute to climate change.

Both supporters and opponents of Keystone XL have been waiting since February to hear whether TransCanada would get the presidential permit it needs to build across the border between the US and Canada. But he said Mr. Obama is still committed to trying to make sure any eventual decision by the State Department is based on the merits of the project.

If any one word could describe the Keystone XL pipeline approval process, “pause” seems most appropriate.

We have tried for seven years to stay out of the political machinations of what this president may or may not do or what a future administration may or may not do.

Omaha attorney Dave Domina, who represents the landowners suing TransCanada, said Nebraskans “will not lie down to be run over”.

“The costly delay has prevented the company from proceeding on a new pipeline that would have brought oil…to USA refineries and jobs and revenue to local communities”. A spur line planned from North Dakota’s oil fields to the Keystone XL would reduce, though not eliminate, the amount of oil-by-rail traffic coming through Minnesota.

“It’s our view that the State Department process should not continue at the current time on its current path if there’s new information that’s going to be provided from a review in Nebraska”, he said. TransCanada has withdrawn its move to seize property, preferring instead to file for a review of the pipeline’s route by the Nebraska Public Service Commission, which could take about a year.

In May, a shock election result saw the progressive New Democratic Party take control of the provincial government in Alberta, ousting the oil-friendly Conservative Party that had governed the province for more than 40 years.

Bernie Sanders, Hillary Clinton, and Martin O’Malley have said they would reject the pipeline application; all the GOP candidates have expressed support for it. That process is expected to last as long as one year.

“With the utmost respect to the administration and the State Department, we do believe there is precedent for pressing pause”, Cooper said.

Keystone XL is dead!

Mark Jaccard, a professor of resource and environmental management at Simon Fraser University in British Columbia, said that crude oil infrastructure investments are often delayed when oil prices are expected to remain down.

As well as market access issues, investors face weak oil prices, high project breakeven costs, and royalty rate and climate change policy reviews from the Alberta government.

But she says luckily, Keystone is not the only game in town and while activity has slowed down, there is still construction and expansion in the Hardisty area’s oil and gas industry. Republicans have pushed the Obama administration to approve Keystone but the president has continued to kick any decision on it down the road.

The pipeline, which has become a touchstone issue in the environmental movement, has been divisive with most Americans falling along partisan lines. After Prime Minister Stephen Harper, a strong proponent of the pipeline, was defeated in last month’s elections, his liberal replacement Justin Trudeau has made clear that he intends to continue to support the project.