Keystone XL faces further delays.
Looming reports, lawsuit could delay pipeline decision until 2015
— While Canadian energy companies nervously await the much-anticipated environmental assessment report on the contentious Keystone XL pipeline, many other hurdles remain to be jumped as the limping pipeline staggers toward the sea.
The U.S. State Department has not said when it will release its environmental report, but it is generally expected within the next few weeks.
There are, however, two other reports in the offing and one lawsuit. Any one of them —coupled with the mid-term elections — could further delay until 2015 U.S. President Barack Obama’s decision on the final, 1,900-kilometre leg of Keystone.
(The southern leg from Cushing, Okla., to Port Arthur, Texas, is up and running.)
In addition to the environment impact study (EIS), the State Department has to issue a National Interest Determination report on the pipeline.
The Canadian government has attempted to influence this report by running ads on TV, in Capitol Hill newspapers and in various Washington subway stations highlighting Canada-U.S. friendship, trade and the importance of Canadian oil to North American energy security.
But record U.S. oil production, which rose by 992,000 barrels per day in 2013, more than cancels out the amount of oilsands bitumen that the pipeline, which is owned by TransCanada, would transport to Texas Gulf Coast refineries.
With Obama determined to impose regulations reducing U.S. fossil-fuel consumption, lawmakers and many Americans are asking why the U.S. needs additional oil from what is generally agreed to be one of the dirtiest oil-production facilities on earth — the oilsands.
“President Obama could say, ‘Look, we are developing so much oil and gas of our own, we don’t need this pipeline at this time,” Jane Kleeb, of Bold Nebraska, which opposes Keystone XL, said in an interview.
The third report is the State Department Inspector General’s report on allegations of conflict of interest. It is scheduled to be released soon and could essentially nullify the environment report.
Last year, Friends of the Earth filed a complaint alleging that the contractor carrying out the EIS — London-based Environmental Resources Management (ERM) — is in conflict of interest with TransCanada and other oil companies that have an interest in the pipeline.
The activist group claimed ERM lied to the State Department on its conflictof-interest disclosure form when it did not admit that it held a contract with the Alaska Pipeline Project, which is a partnership between TransCanada and ExxonMobil. The activist group noted that ERM also acted as a lobbyist for a trading group of which TransCanada is part owner.
Finally, the activists claim ERM should have disclosed that it had business relations with many oilsands companies that stand to benefit from the Keystone XL.
In December, 25 House Democrats sent a letter to Obama alleging “serious concerns” about conflicts of interest in the preparation of the environmental impact study. If the Inspector General rules that ERM lied on its conflict-of-interest form, a new company would have to be hired to redo the study. That could take at least another year.
TransCanada has denied any conflict.
The most aggressive timetable would have the final reports landing on Obama’s desk by May. By then, midterm elections in November will no doubt dominate his thinking. Keystone has become a symbolic issue — a metaphor for the fight over climate change — and it has split the country down the middle. Republican and Democrat supporters alike can be found on each side of the issue.
With the Democrats at risk of losing control of the Senate, Obama is expected to delay his decision until well after the elections to give him political cover.
Finally, 115 landowners in Nebraska have sued the state, challenging the constitutionality of a new law that gave the governor the power to approve the TransCanada pipeline route.
The judgment is due by March 27. Should the landowners win, TransCanada will have to get its route reapproved. “Our lawyers say we have a 50-50 chance of winning,” Kleeb said.