WASHINGTON — The Keystone XL pipeline from the Alberta oilsands into the Southern U.S. will be delayed so the Obama administration can study alternative routes for the controversial project.
The U.S. administration confirmed the delay Thursday, shortly after the Canadian government had acknowledged it.
The U.S. State department said "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 review would take until the beginning of 2013, after which the findings would be shared with eight other U.S. agencies before a decision would be handed down, according to a statement by the department. The news was a bitter disappointment for TransCanada Corp., which had expected a positive decision by year end.
"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.
Calgary-based TransCanada’s project has drawn opposition from environmental groups, as well as large protests on both sides of the border from those against the “dirty” Canadian oilsands as well as those opposed to the ecologically sensitive route the line was to have taken.
Pipeline Route
“We are disappointed with today’s decision to delay a decision on the Keystone XL pipeline,” Andrew MacDougall, a spokesman for Prime Minister Stephen 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.”
Looking at alternative routes could allow the Obama administration to move the project away from the Ogallala Aquifer and the ecologically fragile Sand Hills in Nebraska.
But such a move would potentially delay the project past the 2012 U.S. presidential election.
State Department officials had said Wednesday that all options regarding Keystone XL were “on the table” — including the potential for rerouting the pipeline and outright denial of a permit allowing Calgary-based TransCanada to build the pipeline.
The pipeline was to have run 2,700 kilometres from Hardisty, Alta., to refineries on the Gulf Coast of Texas, carrying as much as 830,000 barrels worth of crude oil per day.
A spokeswoman for Harper, meanwhile, said Thursday that if Keystone were to be delayed or lost, the government would continue to focus on exporting crude to Asian markets.
“Canada will be looking for a buyer,” spokeswoman Sara McIntyre said. “We’re a resource-based, energy-based country and we’ll be looking at all opportunities.”
The move by the Obama administration will likely cast a chill over U.S. relations with the Harper government.
Harper has said approval of Keystone XL should be a “complete no brainer.”
But Obama, in an interview last week with a Nebraska TV station expressed concern about the threat to the environment.
“We don’t want, for example, aquifers that are adversely affected. Folks in Nebraska obviously would be directly impacted. And so we want to make sure that we are taking the long view on these issues,” Obama said at the time.
“I think folks in Nebraska, like all (those) across the country, aren’t going to say to themselves, ‘We’ll take a few thousand jobs if it means that our kids are potentially drinking water that would damage their health,’ or if rich land that is so important to agriculture in Nebraska ends up being adversely affected.”
The tension between Canada and the U.S. over the pipeline comes amid signs in recent months of other problems between the two governments.
A long-promised announcement on a perimeter security deal for the Canada-U.S. border has been stuck in limbo.
Harper and Obama announced with great flourish at a White House ceremony in February that the two countries had begun negotiations on a plan to improve security and speed up the flow of cross-border traffic.
In June, Harper said an action plan for the deal would be released by the end of summer. Instead, negotiations dragged on into the autumn, and the two governments discussed the appropriate venue for an announcement when it is ready. No announcement has been made yet.
Also this fall, the Obama administration angered Harper’s government by tabling a “Buy American” jobs bill that failed to exempt Canada. Harper and his senior ministers publicly complained that the U.S. was resorting to trade protectionism and that both countries would suffer.
This weekend, Harper and Obama will attend an APEC summit in Hawaii of Asian-Pacific nations. They will also sit down for a separate “three-amigos” summit, in which the leaders of Canada, the U.S. and Mexico discuss key issues of shared concern.
Harper has been a strong advocate for the Keystone XL pipeline and has publicly argued in favour of it this autumn.
- with files from Reuters
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