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 Monday's appeal by Calgary-based TransCanada Corp has been widely
interpreted as an attempt to avert an impending "no" from President
Barack Obama to the nearly 1,200-mile (2,000-km) cross-border
pipeline. Keystone XL would carry heavy crude oil from Alberta to
Nebraska and on to Gulf Coast refineries, and has become the
symbolic heart of a struggle between environmentalists opposed to
oil sands development and defenders of fossil fuels.
The U.S. State Department said it had received a letter from
TransCanada asking for the delay but a spokesperson said the review
would continue for now.
TransCanada spokesman Mark Cooper said the company would not
speculate on what the decision may be or when it may come.
But the Obama administration has become more vocal and active on
climate change issues as it closes in on its final year in office,
and the president has repeatedly expressed doubts about the merits
of the pipeline.
TransCanada's request for a delay came amid a darkening political
outlook for the project on both sides of the border.
In Nebraska, the company remains embroiled in time-consuming
disputes with landowners over the proposed pipeline route. And in
Canada, it lost a powerful advocate in October when Conservative
Prime Minister Stephen Harper, who had openly allied with Republican
leaders in his aggressive lobbying for Keystone, was defeated by
Liberal leader Justin Trudeau.
Although Trudeau has offered cautious backing for Keystone, he has
also warned that both the pipeline and wider oil sands development
must demonstrate improved environmental sensitivity.
Nor does Trudeau face any political damage from U.S. rejection of a
pipeline so closely identified with Harper. The incoming prime
minister has already made clear he will not follow his predecessor
in allowing the politics of Keystone to disproportionately define
relations between the two countries.
In Washington, U.S. lobbyists close to the case said TransCanada was
finally facing political reality, recognizing that a delay would
better protect shareholder value than allowing Obama to reject the
project.
The request for a delay came on the eve of TransCanada issuing an
earnings report, and shortly after the White House said it still
expected Obama to make a decision on whether to grant the permit
before he leaves office in January 2017.
OIL SANDS EXTRACTION
Should Obama agree to suspend the review, Keystone's fate would
almost certainly fall to the next president. Republicans have been
universally supportive of building Keystone, though Donald Trump did
qualify that in October, saying he would seek a "better deal" from
TransCanada.Democratic Party front-runner Hillary Clinton is opposed
to the pipeline.
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On one level, the request to suspend the review offers Obama an
escape from having to make a final call on a decision he has avoided
for years. TransCanada began the licensing process in 2008 but the
decision was continually pushed back by various court cases,
technical delays and the president's apparent reluctance to choose.
Yet TransCanada's gambit may not have completely removed the
pressure on the president. Environmental groups responded to
TransCanada's announcement with a blizzard of demands on Obama to
ignore TransCanada's move and kill the pipeline anyway.
"TransCanada acknowledged the writing on the wall by requesting to
suspend the review of its permit application," said a statement
issued by Tom Steyer, the billionaire green activist who heads
NextGen Climate. "Today, tomorrow or next year, the answer will be
the same: Keystone XL is a bad deal for America, our climate, and
our economy."
It's uncertain what effect killing Keystone XL would have on oil
sands extraction. Last week, the Washington, D.C.-based
environmental advocacy group Oil Change International released a
report claiming that oil sands development would peak in 2017
without additional pipeline capacity.
And when Shell announced it would not proceed with the 80,000
barrels a day Carmon Creek project in the oil sands, the company
cited among other things: "current uncertainties, including the lack
of infrastructure to move Canadian crude oil to global commodity
markets.”
But much of the attention in Canada has switched to the proposed
Energy East pipeline that would move Alberta crude across Canada to
Atlantic refineries. And while there is opposition to that pipeline
as well, its politics remain contained within Canada's borders.
(Reporting by Bruce Wallace in Los Angeles; Additional reporting by;
Nia Williams in Calgary and Euan Rocha in Toronto; Editing by Lisa
Shumaker and Ed Davies)
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