State Department Further Postpones Keystone XL Decision

The agency cited ongoing litigation in Nebraska over the controversial oil pipeline.

A TransCanada Keystone Pipeline pump station operates outside Steele City, Nebraska on March 10, 2014.


The long wait for a decision on the Keystone XL pipeline grew even longer Friday, when the U.S. State Department announced it would allow more time for eight federal agencies to submit their views on the proposed project.

The State Department said additional time was needed because of ongoing litigation in the Nebraska Supreme Court that leaves uncertainty over the pipeline's route.

The proposed pipeline would carry crude oil from Alberta, Canada, through Nebraska and five other states to refineries on the U.S. Gulf Coast. (See map of the route: "Interactive: Mapping the Flow of Tar Sands Oil.")

The Keystone XL project has become Exhibit A in a larger debate over whether the U.S. should enable further exploitation of the explosive oil and gas wealth made possible by new drilling techniques or should prioritize alternatives to the fossil-fuels that are stoking climate change.

Five Years and Counting

"We are extremely disappointed and frustrated with yet another delay," said Russ Girling, president and CEO of pipeline operator TransCanada in a statement.

Other supporters of the project were more blunt. "This decision is irresponsible, unnecessary, and unacceptable," said U.S. Senator Mary Landrieu (Democrat, Louisiana) in a statement.

But some welcomed the pause.

"Getting this decision right includes being able to evaluate the yet-to-be determined route through Nebraska and continuing to listen to the many voices that have raised concerns about Keystone XL," said Susan Casey-Lefkowitz of the Natural Resources Defense Council.

Louisiana Democrat Landrieu was among 11 senators who sent a letter this month to President Barack Obama urging him to approve the pipeline by May 31.

"This process has been exhaustive in its time, breadth, and scope," the letter said. "It has already taken much longer than anyone can reasonably justify."

First proposed in 2008, the TransCanada project requires presidential approval because it crosses international boundaries. The current decision pertains to the proposed northern section, running from Hardisty in Alberta, Canada to Steele City, Nebraska. Construction on the southern leg of the Keystone extension, which runs from Cushing, Oklahoma to Port Arthur, Texas, is already complete. (See related story: "Keystone XL Pipeline Path Marks New Battle Line in Oklahoma.")

Ongoing Controversy

In its announcement Friday, the State Department said it would take the additional time to review the "unprecedented" 2.5 million public comments it had received since the the last comment period closed on March 7.

Thousands of protesters have converged on Washington, D.C. and other parts of the nation at key points during the decision process, with opponents ranging from actress Daryl Hannah to former President Jimmy Carter.

TransCanada and other Keystone proponents, meanwhile, have run ad campaigns touting the pipeline's ability to create jobs and reduce dependence on "unstable" foreign sources of oil.

The latter claim has been questioned by those who point out that the United States imports far more oil from stable Canada than from any other single destination, and that the market (not the U.S. president or TransCanada) will determine where that oil goes once it is processed at Gulf refineries. (See related story: "Is Canadian Oil Bound for China Via Pipeline to Texas?")

Obama said last year that he would approve Keystone XL only if it served the national interest. That would be possible, he said, only if the pipeline "does not significantly exacerbate the problem of carbon pollution."

A final environmental impact statement from the State Department, released in January, acknowledged that when taking the life cycle of Canadian tar sands oil into account, from extraction to burning in gas tanks, it emits about 17 percent more greenhouse gas than the average barrel of U.S.-refined crude oil.

But the State Department also concluded that the pipeline was "unlikely to significantly impact the rate of extraction in the oil sands or the continued demand for heavy crude oil at refineries in the United States."

It noted that Canadian crude was already being transported in "substantial volumes" by rail. In other words, the oil would make it to market with or without Keystone XL. (See related story: "3 Factors Shape Obama's Decision on Keystone XL Pipeline.")

Sticking Point: The Nebraska Route

The Nebraska court case cited by the State Department in its new delay will decide whether the state's governor, Republican Dave Heineman, has authority to approve the final pipeline route.

TransCanada was denied permission to build the pipeline in 2011 in part because of concerns over its route through Nebraska's Sandhills region, a native grasslands that contains one of the largest aquifers in North America.

The company submitted a new application in 2012 with an altered route that bypassed the Sandhills. (See related photo: "Animals That Blocked the Keystone XL Pipeline Path.")

But the new pipeline route still would cross environmentally sensitive areas including the North Valley Grasslands, an officially designated Important Bird Area, and several waterways, including the Yellowstone, Missouri, and Niobara Rivers.

Officially endangered or threatened species including the whooping crane, swift fox, and American burying beetle risk being affected by the project, both during construction and via the new power lines that it will require to feed pumps once it's operating. (See related story: "Keystone XL Pipeline: 4 Animals and 3 Habitats in its Path.")