Obama Orders Keystone XL Tar Sands Pipeline Route Review

WASHINGTON, DC, November 10, 2011 (ENS) – The U.S. State Department today ordered another environmental assessment for the TransCanada Keystone XL pipeline route, allowing President Barack Obama to defer the contentious issue until after the 2012 elections.

Calgary-based TransCanada Corp. first applied in 2008 for a permit to build and operate a 1,700 mile pipeline to carry heavy oil from the tar sands in northern Alberta to refineries in Texas and Oklahoma, crossing two provinces and six states.

Because the pipeline would cross the U.S.-Canada border, a Presidential Permit issued by the U.S. Department of State is required for the project to proceed.

Federally listed as Endangered, blowout penstemon, Penstemon haydenii, plants thrive in the Nebraska Sand Hills. (Photo by Melvin Nenneman courtesy USFWS)

As part of this process the State Department issued a Final Environmental Impact Statement on August 26, 2011, which concluded “there would be no significant impacts to most resources along the proposed Project corridor.”

But today, the State Department said that “given the concentration of concerns regarding the environmental sensitivities of the current proposed route through the Sand Hills area of Nebraska, the Department has determined it needs to undertake an in-depth assessment of potential alternative routes in Nebraska.”

President Obama said in a statement, “Because this permit decision could affect the health and safety of the American people as well as the environment, and because a number of concerns have been raised through a public process, we should take the time to ensure that all questions are properly addressed and all the potential impacts are properly understood.”

“The final decision should be guided by an open, transparent process that is informed by the best available science and the voices of the American people,” Obama said.

“At the same time, my administration will build on the unprecedented progress we’ve made towards strengthening our nation’s energy security, from responsibly expanding domestic oil and gas production to nearly doubling the fuel efficiency of our cars and trucks, to continued progress in the development of a clean energy economy,” he said.

Anti-pipeline demonstrators in front of the White House, August 25, 2011 (Photo by Ben Powless courtesy Tar Sands Action)

The anti-pipeline demonstrators who encircled the White House on Sunday and protested every day for two weeks in August and September are declaring a partial victory.

“The President didn’t outright reject the Keystone XL pipeline permit,” said protest organizer Bill McKibben of Tar Sands Action and 350.org. “My particular fantasy – that he would invite the 1,253 people arrested on his doorstep in August inside the gates for a victory picnic by the vegetable garden – didn’t materialize. But a few minutes ago the President sent the pipeline back to the State Department for a thorough re-review, which most analysts are saying will effectively kill the project.”

“It’s important to understand how unlikely this victory is,” McKibben said. “Six months ago, almost no one outside the pipeline route even knew about Keystone XL. One month ago, a secret poll of “energy insiders” by the National Journal found that “virtually all” expected easy approval of the pipeline by year’s end. As late as last week the CBC reported that Transcanada was moving huge quantities of pipe across the border and seizing land by eminent domain, certain that its permit would be granted. A done deal has come spectacularly undone.”

“There’s no way, with an honest review, that a pipeline that helps speed the tapping of the world’s second-largest pool of carbon can pass environmental muster,” McKibben said.

The question of whether the State Department’s environmental review to date has been honest will be taken up by the State Department’s Office of the Inspector General in response to congressional and public concerns about conflicts of interest, the IG’s office announced earlier this week. (ENS, November 8, 2011)

Organizer Bill McKibben speaks to the crowd at the White House Keystone XL protest, November 6, 2011. (Photo by Javier Sierra courtesy Sierra Club)

The IG’s Special Review will delve into the State Department’s relationship with Cardno Entrix, a Houston-based environmental consulting firm that considers TransCanada a “major client.” Cardno Entrix helped the department prepare the pipeline’s EIS and now maintains the department’s Keystone XL website.

The IG’ Office will look into the relationship between State Department officials and TransCanada lobbyist Paul Elliott, who was deputy campaign manager for the 2008 presidential campaign of Secretary of State Hillary Clinton. There is also concern about the recent hiring of former TransCanada lobbyist Broderick Johnson as a senior adviser to Obama’s re-election campaign.

Nebraska’s concerns about the pipeline’s route over the Ogllala aquifer and across the state’s Sand Hills area are a major reason behind the Obama administration’s decision to undertake a further environmental review.

The State Department said today it has received “comments on a wide range of issues including the proposed project’s impact on jobs, pipeline safety, health concerns, the societal impact of the project, the oil extraction in Canada, and the proposed route through the Sand Hills area of Nebraska, which was one of the most common issues raised.”

Map shows Keystone XL pipeline route as currently proposed (Map courtesy U.S. State Dept.)

The unique combination of characteristics in the Sand Hills includes a high concentration of wetlands of special concern, a sensitive ecosystem, and extensive areas of very shallow groundwater.

“The concern about the proposed route’s impact on the Sand Hills of Nebraska has increased significantly over time,” said the State Department.

Nebraska Governor Dave Heineman, a Republican, has convened a special session of the Legislature to consider the issue, which opened November 1 and is ongoing.

State law governs routes for interstate petroleum pipelines; however, Nebraska currently has no such law or regulatory framework authorizing state or local authorities to determine where a pipeline goes.

Nebraska lawmakers have been considering five bills that address the state’s pipeline siting authority. On Wednesday, the Legislature’s Natural Resources Committee advanced pipeline siting legislation to the full Legislature for debate.

“Taken together with the national concern about the pipeline’s route, the Department has determined it is necessary to examine in-depth alternative routes that would avoid the Sand Hills in Nebraska in order to move forward with a National Interest Determination for the Presidential Permit,” said the State Department today.

Then, in consultation with the eight other federal agencies specified by President Obama in his Executive Order on the Keystone XL pipeline, the State Department will consider all the “relevant issues” including environmental concerns, climate change, energy security, economic impacts, and foreign policy.

This process, including a public comment period on a supplement to the final EIS, “could be completed as early as the first quarter of 2013,” the State Department said.

TransCanada’s president and chief executive officer Russ Girling said, “We remain confident Keystone XL will ultimately be approved. This project is too important to the U.S. economy, the Canadian economy and the national interest of the United States for it not to proceed.”

But Girling acknowledges the delay could have “potential negative ramifications,” especially where shippers and U.S. refiners are concerned.

“Supplies of heavy crude from Venezuela and Mexico to U.S. refineries will soon end,” said Girling. “If Keystone XL is continually delayed, these refiners may have to look for other ways of getting the oil they need. Oil sands producers face the same dilemma – how to get their crude oil to the Gulf Coast.”

During the public process to date, 14 different routes for Keystone XL were studied, eight that impacted Nebraska, said Girling. They included one potential alternative route in Nebraska that would have avoided the entire Sandhills region and Ogallala aquifer and six alternatives that would have reduced pipeline mileage crossing the Sandhills or the aquifer. TransCanada hopes this work will serve as a starting point for the additional review and help expedite the review process.

“If Keystone XL dies, Americans will still wake up the next morning and continue to import 10 million barrels of oil [per day] from repressive nations, without the benefit of thousands of jobs and long term energy security,” said Girling. “That would be a tragedy.”

“Keystone XL is shovel-ready,” Girling said. “TransCanada is poised to put 20,000 Americans to work to construct the pipeline – pipe fitters, welders, mechanics, electricians, heavy equipment operators, the list goes on. Local businesses along the pipeline route will benefit from the 118,000 spin-off jobs Keystone XL will create through increased business for local restaurants, hotels and suppliers.”

Pipe on its way towards the Keystone XL pipeline route (Photo credit unknown)

“Five billion dollars in property taxes paid by TransCanada over the lifetime of the project will allow counties in states along the pipeline route to invest in new schools, roads and hospitals,” he said.

The American Petroleum Institute blasted the White House for delaying the approval of the pipeline. “This decision is deeply disappointing and troubling,” said API President and CEO Jack Gerard. “Whether it will help the president retain his job is unclear, but it will cost thousands of shovel-ready opportunities for American workers.”

“There is no real issue about the environment that requires further investigation, as the President’s own State Department has recently concluded after extensive project reviews that go back more than three years,” Gerard said. “This is about politics and keeping a radical constituency opposed to any and all oil and gas development in the president’s camp in November 2012.”

McKibben and other anti-pipeline activists commended President Obama for the renewed review and say their fight has just begun.

Michael Brune, executive director of the Sierra Club, said, “The mere fact that the State Department is slowing down and taking a look at the dirty Keystone XL tar sands pipeline is hugely encouraging.”

“The Sierra Club is confident that when the State Department evaluates the true costs of this dirty project – threats to water supplies and ecologically sensitive areas, destruction of the boreal forest, dangerous carbon emissions, unsafe pipelines, and increased cancer and respiratory illnesses in communities like Port Arthur and Houston, Texas – they will reject this pipeline,” said Brune.

“Though this is welcome news, this fight is far from over,” said Friends of the Earth spokesperson Kim Huynh. “We still need your help to ensure that President Obama’s call for a delay ultimately leads to rejecting the pipeline altogether.”

National Farmers Union President Roger Johnson said, “NFU policy opposes any infrastructure or resource development that jeopardizes the health, safety and quality of the Ogallala and other freshwater aquifer resources. In formal comments submitted earlier this year, NFU advised the State Department that alternate routes with existing pipeline infrastructure would be more suitable options.”

McKibben thanked President Obama for supporting another review of the pipeline’s environmental impacts “in the face of the fossil fuel industry and its endless reserves of cash.”

McKibben directed his “deepest thanks” to “indigenous peoples who began the fight, to the folks in Nebraska who rallied so fiercely, to the scientists who explained the stakes, to the environmental groups who joined with passionate common purpose, to the campuses that lit up with activity, to the faith leaders that raised a moral cry, to the labor leaders who recognized where our economic future lies, to the Occupy movement that helped galvanize revulsion at insider dealing, and most of all to the people in every state and province who built the movement that made this decision inevitable.”