Keystone XLs Backers Search for a Plan B
In the aftermath of the president's Jan. 18 rejection of a presidential permit for the Keystone XL pipeline, the $7-billion construction project's supporters are looking for a new strategy.
TransCanada, the Calgary-based energy company that wants to build the pipeline stretching from Alberta through parts of the American Midwest down to the Gulf of Mexico, says it will reapply for the federal permit. In addition, furious GOP leaders in Congress say they will push to ensure that the pipeline eventually gets built.
"All options are on the table," Speaker of the House John Boehner (R-Ohio) told reporters shortly after the president made the announcement. "This fight is not going to go away."
President Obama left the door open for another application to be filed. But he said the administration had no choice but to deny the current permit because the State Dept. did not have enough time to perform an environmental review of the project. Lawmakers included a provision requiring an expedited 60-day review of the pipeline in a bill, enacted on Dec. 23, that also extended a payroll-tax cut.
Russ Girling, TransCanada's president and CEO, said in a statement that his firm "remains fully committed to the construction of Keystone XL. Plans are already under way on a number of fronts to largely maintain the construction schedule of the project."
Girling said he anticipates that, as a result of the "exhaustive" environmental analysis already compiled over the past three years, the new application would be processed in an expedited manner to allow for an in-service date of late 2014.
But the State Dept. warns that an expedited review is not a certainty. On Jan. 18, Kerri-Ann Jones, assistant secretary in the State Dept.'s Bureau of Oceans and International Environmental and Scientific Affairs, told reporters, "We cannot state that anything would be expedited at this time. So I really couldn't speak to when such a review could be finished."
Looking for quick answers on construction and engineering topics?
Try Ask ENR, our new smart AI search tool.
Ask ENR →
However, regulatory guidelines exist that would allow officials "to use information that's out there so there is information out there from the process we've been through, but we would also have to look at this as a completely new application."
A key sticking point in evaluating the project's environmental impact is the proposed pipeline's route, which would cut through Nebraska's environmentally sensitive Sandhills area.
The Nebraska state Legislature passed a measure this fall that called for the new pipeline to be rerouted. Gov. Dave Heineman (R) signed the bill and asked the Nebraska Dept. of Environmental Quality to conduct its own environmental study.
The administration's denial of the permit throws the fate of that study into question, according to Brian McManus, Nebraska Dept. of Environmental Quality public information officer. "Obviously, this decision is going to change things, but we're still analyzing what our role is going to be in the future."
But Girling says TransCanada "will continue to work collaboratively" with DEQ to route the Keystone XL around the Sandhills. That process is expected to be completed by September or October.
To many construction groups and labor unions, the pipeline means work. Steve Hall, American Council of Engineering Companies vice president of government affairs, calls the administration's move a "very disappointing decision, given what the project would do in terms of creating jobs and contributing to more energy self-sufficiency."
William Hite, general president of the United Association of Plumbers, Fitters, Welders and HVAC Technicians, says that "years of extensive, careful planning have gone into this project. Without Keystone, this oil will be shipped to China and other countries that have little or no environmental standards that are needed if this oil is to be safely refined and used."
Oil industry officials and GOP leaders offered withering criticism following the president's announcement. Calling Obama's decision "an abdication of responsibility," Jack Gerard, president and CEO of the American Petroleum Institute (API), said, "How can you say you're for creating jobs and reject the largest shovel-ready project in America today?" Gerard hinted that API might consider taking legal action.
Boehner said the pipeline has bipartisan support and that he would work with other lawmakers to develop legislation in the coming weeks and months to get the project back on track. The first order of business will be a House Energy and Commerce subcommittee hearing on Jan. 25 that will focus largely on the Keystone XL decision.
Environmental groups praised the president's decision. Frances Beinecke, president of the Natural Resources Defense Council, said, "Rather than bringing America energy security, the pipeline would have transported dirty Canadian tar-sands oil through America's heartlands for export to other countries."
