Legislation that would allow TransCanada’s controversial Keystone XL oil pipeline to proceed has now been passed by the U.S. House of Representatives — an anction that the White House has vowed to veto.
The move comes at the same time TransCanada announced it has submitted a proposal to Nebraska state officials proposing a new route through the state for the disputed pipeline.
The Keystone XL pipeline project was included within part of a larger bill passed by the House that finances road projects through stopgap measures, but the White House has vowed to veto the legislation because it mandates the construction of the Alberta-to-Texas oil pipeline that U.S. President Barack Obama earlier blocked.
Republicans, who control the House, added the requirement to build the Keystone XL pipeline project, but the White House argues such a requirement would bypass long-standing practices on how to approve cross-border pipelines.
Tuesday’s statement from the White House noted that a pipeline route has yet to be identified.
New pipeline route submitted
TransCanada said in a statement Wednesday that it has submitted a planned route for the pipeline to Nebraska officials. The state has become a focus of concern for the 2,735-kilometre pipeline, which would carry oil from Alberta’s oilsands to refineries in Texas.
When Obama blocked the pipeline he cited uncertainty over a planned route intended to avoid Nebraska’s environmentally sensitive Sandhills region.
Details of the new route were not immediately available. A spokeswoman for the U.S. State Department said officials had not received notification of a new route. State Department approval is need because the $7-billion US pipeline crosses a U.S. border.
The Barack Obama administration has delayed a decision on TransCanada’s contentious Keystone XL pipeline by upto 18 months, a move that could potentially kill the project, but won’t necessarily slow down Alberta oil sands production.
That’s a huge turning point in a story CanadianConservation.com began reporting before any other major Canadian media.
The U.S. State Department initiative would ostensibly allow the U.S. government to evaluate alternate routes for a pipeline stretching from northern Alberta to the Texas Gulf Coast.
But it effectively relieves Obama from making what has become an increasingly difficult decision on the project before the 2012 election.
A 10,000 person anti-Keystone XL protest in Washington, D.C. last weekend gave glimpses of the environmental backlash he could expect should he approve the pipeline. But turning down a project that’s perceived as job-creating in a struggling economy would have provided easy fodder for Republican opponents.
Environmental activists were ecstatic about Thursday’s news.
“By rejecting TransCanada’s plan and exploring a reroute, the Obama administration has essentially hit the reset button on the Keystone XL environmental review process,” Friends of the Earth president Erich Pica said in a statement. “This is a major accomplishment for the climate movement and the people in the pipeline’s path, demonstrating the tremendous power of hopeful, committed and ambitious grassroots activism.”
The question now is what the delay means for TransCanada, Alberta’s oil sands, and Canada’s energy superpower ambitions.
Reported from the front line
When CanadianConservation.com first began reporting on Keystone XL in the summer of 2010, few other Canadian media outlets yet grasped what a major story it would become.
But as the months progressed, it became clear that America’s environmental movement was bracing itself for a gruesome and prolonged battle.
CanadianConservation.com reported from the front lines of the struggle in Washington, D.C. last spring, explaining how activists managed to powerfully delay the project for months, helping add $1 billion in costs to TransCanada’s budget.
Additional CanadianConservation.com reporting from the U.S. capitol revelaled how Canadian officials, including Alberta’s Gary Mar and Canada’s U.S. ambassador Gary Doer, were “aggressively” pitching the project to Congress.
One staffer compared them to car salesmen, and told CanadianConservation.com that Canada’s hard sell “was the most direct encounter I’ve had with a lobbyist representing a foreign nation.” (!)
Then, this September, CanadianConservation.com again travelled into battle to report on trans-border indigenous opposition to Keystone XL, this time from a local tribal casino in South Dakota.
Could these new delays kill Keystone?
What the pipeline delay now means for TransCanada is not entirely clear, but CEO Russell Girling recently told investors that continued administration foot-dragging could put Keystone XL in peril.
“If the administration delays the project long enough where it becomes a low probability it will ever get through the process in time to meet [the shippers'] needs, they’re not going to support us anymore,” Girling said.
And recent reports suggest that TransCanada could lose $1 million each day the project continues to stay in limbo.
“We’ve got to pay for continued warehousing of the pipe product and materials, for manpower — we’re paying for materials that we’re not using,” company spokesperson Terry Cunha told the Calgary Sun. “It could have significant impact.”
Even if Keystone XL were shelved, however, it wouldn’t necessarily slow down production in Alberta’s oil sands.
“If it does not happen, I think you will see industry in Canada, which as you know is very resilient and very innovative, move very quickly to find other outlets to get our heavy oil production and our synthetic oil production likely off the West Coast and into Asian markets,” Canadian Natural Resources Ltd. president Steve Laut told the Calgary Herald last week.
That’s a sentiment echoed by Prime Minister Stephen Harper, whose spokesperson Sara McIntyre reportedly said: “Canada will be looking for a buyer,” should Keystone XL ultimately not be built. “We’re a resource-based, energy-based country and we’ll be looking at all opportunities.”
The Enbridge connection
The Obama administration’s decision will almost certainly put pressure on Enbridge’s proposal to construct its “Northern Gateway” pipeline from Alberta’s oil sands to B.C.’s coastal Kitimat.
Yet EnvironmentalDefence, a national green group based in Toronto, argues that Prime Minister Harper should be taking cues from his American colleague.
“We hope that the Canadian government will listen to the concerns of its citizens affected by Enbridge’s proposed Northern Gateway tar sands pipeline in the same way that President Obama has listened to the concerns of Nebraskans,” the group’s executive director Dr. Rick Smith said in a statement.
