Facing political opposition in the White House, TransCanada has made an unexpected request to halt the review process of the controversial $8-billion Keystone XL pipeline, currently underway in the US State Department.
In a letter sent to Secretary of State John Kerry on Monday, TransCanada cited a pending review of the proposed route through Nebraska, a process that may take another seven months to one year to resolve. On Tuesday afternoon, officials told Reuters that they were in the process of responding to the petition, though there has been no indication of how they will rule. If the company's request is granted, it could punt a decision on the project to the next administration.
"In order to allow time for certainty regarding the Nebraska route, TransCanada requests that the State Department pause in its review of the Presidential Permit application for Keystone XL," Kristine Delkus, TransCanada's executive vice president of stakeholder relations and general counsel, wrote. "This will allow a decision on the Permit to be made later based on certainty with respect to the route of the pipeline."
While the company has found reliable resistance in Nebraska, the request for delay has been widely interpreted as a strategic reaction to what TransCanada saw to be thinning political support for the project. Some opposition groups are calling this the final nail in the coffin for the project, while others are concerned that if the State Department grants TransCanada's request, the decision will be pushed to 2017, when the White House may be occupied by a more sympathetic administration.
"Today, tomorrow or next year, the answer will be the same: Keystone XL is a bad deal for America, our climate, and our economy," said Tom Steyer, the president of Nextgen Climate, a political advocacy group pushing for greater US renewable energy generation. "Secretary Kerry should reject TransCanada's request for delay, and President Obama should immediately reject the Keystone XL pipeline once and for all."
In the seven years that Keystone XL has been under review by the State Department, political support for the project has waxed and waned. But low oil prices, in addition to the President Barack Obama's increased focus on reducing greenhouse gas emissions, have dampened the chances that the 1,179-mile pipeline, intended to transport oil from Alberta, Canada to refineries along the Gulf Coast, will be approved.
"The easiest answer is that politically, they think a Republican administration would be more prone to approve such a pipeline," said Carey King, assistant director of the Energy Institute at the University of Texas at Austin. "If Obama didn't say yes when oil was $100 a barrel, why would he now."
But King believes that the motivation behind the request for a delay may be more of a reaction to the current macroeconomic situation than a proactive attempt to play politics.
"They are reacting to less oil sands development, which is due to low oil prices and the demand outlook," he added. "If projects are getting delayed, there is a lower probability of guaranteeing a return on your pipeline — it's one more example of people cutting back and waiting for oil prices to go up."
While seeking reelection three years ago, Obama expressed his support for the southern part of the pipeline, a portion that could be completed without a presidential permit. A year later, he said he would only support Keystone XL if it didn't "significantly exacerbate" climate change. But as oil prices continued to plummet, so did apparent political support. Earlier this year, the US Environmental Protection Agency called on the administration to reconsider the need for such a pipeline.
''Pause or no pause, we now know more than enough to do the right thing — reject the pipeline because it would worsen climate change," said Anthony Swift, director of the Canada Project at the Natural Resources Defense Council.
Republicans in Congress have uniformly championed the project, which developers say will create 40,000 jobs, while party candidates for the presidency have taken clear positions in favor of the pipeline. Republican Jeb Bush laid out his national energy plan last week, promising to approve Keystone XL immediately if elected, while Donald Trump, doing the same, has said that the pipeline would have "no impact" on the environment.
But if Democrats take the White House, the story would likely be different. Candidates Bernie Sanders, Hillary Clinton, and Martin O'Malley oppose the pipeline.
Following the announcement of TransCanada's request on Monday, Sanders took to Twitter to restate his long-standing opposition to Keystone XL. And proving that the issue remains a political hot button in the upcoming presidential campaign, he responded to Clinton's earlier statement that the pipeline was a "distraction" in the fight against climate change.
"It isn't a distraction — it's a fundamental litmus test of your commitment to battle climate change," Sanders tweeted.
In Canada, however, federal support of the project remains strong. 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.
While the potential delay has caused concern among opponents of the project, some environmental groups are claiming it as a victory for popular organizing, and that such a request from TransCanada serves as evidence that the project is no longer popular or viable.
"Even when President Obama didn't step up and make a decision, the people had enough power to sway the corporation itself," said Luisa Abbott Galvao, climate and energy campaigner with Friends of the Earth. "That shows how much power we can actually have. Our leaders are being laggards. We're leading the way, and we're winning."
At a press briefing on Tuesday, White House spokesman Josh Earnest said the State Department was seeking to determine what the company's motivation was for the request for a delay.
"But given how long it's taken ... it seems unusual to me to suggest that somehow it should be paused yet again," he said.
Follow Eva Hershaw on Twitter: @beets4eva
Matt Smith contributed reporting
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