The fate of the proposed Keystone XL pipeline was cast into limbo for at least 18 months on Thursday, as the State Department ordered a review of alternative routes to avoid putting at risk critical water sources in Nebraska.
The move puts off until 2013 a tough presidential decision on whether to allow the pipeline, sparing President Obama a politically tough call in an election year. And it throws the future of the project in doubt, leaving Calgary-based TransCanada to decide whether to redesign the $7 billion pipeline or scrub it, amid growing uncertainty about its prospects for approval.
The issue had presented Obama with a political thorn bush. Approving the pipeline would fly in the face of much of what he has accomplished and espoused on the environmental front, from his efforts to cut U.S. reliance on oil to his call for reducing the carbon pollution that is warming the planet.
But rejecting the pipeline would have opened a new line of attack against him at the outset of an election year. Republicans would likely have asserted that the decision undermined job growth, hoping to put pressure on the blue-collar vote critical to important heartland swing states like Michigan, Ohio and, Pennsylvania.
“It was, literally, a no-win situation for the president,” said Jeremy Mayer, who teaches presidential politics at George Mason University in Fairfax, Virginia. Moving the pipeline allowed Obama to buy time and to protect the aquifer. Politically, said Mayer, it was an elegant solution: “It kicks the can down the road.”
If Thursday’s move injected uncertainty into TransCanada’s plans, it carries risks, as well, for pipeline opponents. Obama isn’t guaranteed a second term, after all, and most Republican presidential contenders have come out in favor of Keystone XL.
The announcement came four days after pipeline opponents rallied by the thousands around the White House and a week after Obama vowed to protect Nebraska croplands, water, and health from the risks of a pipeline rupture, a theme he reaffirmed on Thursday.
"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," Obama said in a prepared statement. "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."
Calgary-based TransCanada wants to build the proposed 1,700-mile Keystone XL pipeline to move crude oil from Alberta’s tar sands to Texas refineries and ports along the Gulf of Mexico. The company’s proposed route, though, cuts across 247 miles of the Ogallala aquifer, especially in an area of central Nebraska called the Sandhills. That aquifer is the country’s largest single source of underground water and it provides about 80 percent of Nebraska’s irrigation and drinking water. An oil pipeline rupture there could contaminate nearly 5 billion gallons of water, a University of Nebraska analysis concludes.
The water is critical to the 47,200 farms stretched out over 45.6 million acres of land in Nebraska. Farmers and ranchers, many of whom tend soil their families have tilled for generations, produce corn, wheat, cattle, and other agricultural goods worth $15.5 billion a year. Those concerns have been highlighted during months of pipeline protests, public comment, and review.
“As a result of this process, particularly 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,” the State Department announced in a press release. That examination will require additional public comments and a supplement to the environmental impact statement the agency published last August. That work will be completed, “as early as the first quarter of 2013,” Thursday’s press release states. Only after that, the statement continued, will the administration make a judgment as to whether to approve the project.
"We remain confident Keystone XL will ultimately be approved," Russ Girling, TransCanada's president and chief executive officer, said in a prepared statement Thursday. "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."
Because the pipeline would cross the U.S. border with Canada, approval requires a presidential determination that the project would be in the national interest.
“The president wants the best possible decision,” White House spokesman Jay Carney told reporters Thursday, saying Obama would consider “issues of public health, climate change, economic growth, and jobs. All of these these have to be factored into the decision that’s made.”
Thursday’s move marked a dramatic about-face by the State Department, which gave the project a preliminary go ahead in August. Since then, more than 1,200 pipeline opponents were arrested in peaceful protests, and thousands more formed a human ring around the White House last Sunday, calling on Obama to reject the pipeline. Foes claim it would send the dirtiest oil on the planet through the heart of the Great Plains, exposing the breadbasket of America to the risks of the kinds of accidents that polluted the Yellowstone River in Montana last summer and Michigan’s Kalamazoo River last year.
In addition to political pressures, the State Department’s review of the pipeline has been dogged in recent weeks by allegations of bias, conflict of interest and ineptitude. Last Monday, the State Department Inspector General Harold Geisel announced an internal investigation. He said he would look into a number of allegations, including those that government officials improperly allowed TransCanada to sign off on the selection of a consulting firm, Cardno ENTRIX, to assist in the preparation of the environmental impact statement. The firm has financial ties to TransCanada.
Read OnEarth's complete Keystone XL coverage.
Image: Emma Cassidy for Tar Sands Action
