Keystone XL

Keystone Pipeline Attempts Regulatory End Run Around Obama Administration

Environmentalists cry foul and urge President Obama to stop the pipeline



Transcanada, the would-be builder and operator of the Keystone Pipeline that would transport oil sands crude to U.S. Gulf Coast refineries has written to the U.S. State Department asking the agency to pause its review of the pipeline. Since the pipeline crosses a border, the president gets to weigh in on its approval with a finding that it is or is not in the national interest. The approval as been delayed so far for seven years as President Barack Obama deviously dithered between offending the labor union or environmentalist wings of the Democratic Party. In search of a "legacy," the signs are that Obama's State Department is planning to soon issue a ruling that the pipeline is not in the national interest due to concerns about the effects of oil sands production on the global climate.

Transcanada is apparently seeking to derail the State Department's negative ruling, by asking the agency to pause consideration while its pipeline route through Nebraska is being finalized. In addition, the fall of oil prices from $134 per barrel when Transcanada first filed in 2008 to build the pipeline to $43 per barrel today surely hasn't helped.

Naturally, environmental activists are urging President Obama to ignore Transcanada's request. One example is a statement from Bill McKibben, founder of the group that advocates reducing atmospheric carbon dioxide concentrations back down from 400 ppm to 350 ppm. From McKibben:

"Clearly TransCanada has lost and they recognize that. It's one of the great victories for this movement in decades. In defeat, TransCanada is asking for extra time from the referees, and clearly hoping they'll get a new head official after the election. It's time for the current umpire, President Obama, to reject this project once and for all, and go to Paris as the first world leader to stop a major project because of its effect on the climate. No matter what route TransCanada comes back with, the ultimate problem all along with Keystone XL has been that it's a climate disaster — that it fails the President's own climate test. It will be a sign of his solidarity with this remarkable movement when he comes right out and says that."

President Obama wants to make a good showing at the upcoming U.N. Climate Change Conference in Paris. Therefore my bet is that he will ignore Transcanada's request for a pause and finally accept the State Department's determination that building the Keystone pipeline is not in the national interest.

Note: I will be publishing daily dispatches from the second week of the Paris Climate Change Conference.

Disclosure: Back in 2011, I went on a junket to report on the development of Alberta oil sands. My travel expenses were covered by the American Petroleum Institute. The API did not ask for nor did it have any editorial control over my reporting of this trip or, for that matter, any other reporting that I do. For more background, see my articles, "The Man-Made Miracle of Oil from Sand," and "Conflict Oil or Canadian Oil?"