You are hereMontreal Gazette: Obama puts Keystone pipeline in limbo

Montreal Gazette: Obama puts Keystone pipeline in limbo

Ruling to come after election; Delay of $7-billion project could further strain relations between U.S., Canada

-By Sheldon Alberts and Mark Kennedy

November 11, 2011-The Obama administration has thrown the controversial Keystone XL oilsands pipeline into limbo with a decision to delay a final ruling on the $7-billion project until after the 2012 presidential election.

In a statement released Thursday afternoon, the U.S. State Department said it was ordering a new review aimed at rerouting Keystone XL around sensitive ecosystems along its proposed path through Nebraska.

A final determination on whether to grant Calgarybased TransCanada Corp. a presidential permit to build the 2,700-kilometre line is now unlikely before "the first quarter of 2013," the department said.

President Barack Obama, in a statement Thursday afternoon, said he backed the move because of the need for more information about the potential impacts on people and natural resources along the pipeline route.

"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.

"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."

The decision comes after months of growing opposition to Keystone XL from environmental groups, legislators and landowners in Nebraska - and from prominent donors to Obama's electoral war chest, who threatened to withhold support if the project went ahead.

The move is likely to increase strains between Obama and Prime Minister Stephen Harper, who has lobbied aggressively for Keystone XL and recently said approval should be a "complete no-brainer" for the U.S.

"We are disappointed with today's decision to delay a decision on the Keystone XL pipeline," Andrew MacDougall, a spokesperson for Harper, said Thursday.

"As we have consistently said, the pipeline will create thousands of jobs and billions in economic growth on both sides of the border. While disappointed with the delay, we remain hopeful the project will be decided on its merits and eventually approved."

The news was also bitter disappointment for TransCanada Corp., which had expected a positive decision by the end of the year.

"Up until about one o'clock this afternoon we were anticipating a presidential permit by the end of 2011," said Robert Jones, vice-president of Keystone Pipelines for TransCanada.

Speaking at the sidelines of a heavy oil conference in Calgary, Jones said he believed the issue facing TransCanada was more one of timing than a matter of approval.

In an earlier statement, Russ Girling, TransCanada's president and chief executive officer, remained buoyant about the chances of the pipeline's eventual construction.

"We remain confident Keystone XL will ultimately be approved," said Girling. "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."

Alberta Premier Alison Redford said the delay is "disappointing," and expressed hopes that anti-pipeline protesters did not play a role in State Department's decision.



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