Long Slog on Keystone Continues

A final decision on the controversial pipeline is still months away, even with another hurdle cleared on Friday.

MILLBRAE, CA - JUNE 11: Protestors hold sections of mock pipeline during a demonstration outside of the site of the Facebook shareholders meeting at the Westin Hotel on June 11, 2013 in Millbrae, California. Dozens of protestors staged a demonstration outside of Facebook's first shareholders meeting in opposition of Facebook's use of ads in support of the Keystone pipeline and their blocking of images of mothers breast feeding. (Photo by Justin Sullivan/Getty Images)
National Journal
Amy Harder
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Amy Harder
Feb. 1, 2014, 5:51 a.m.

A final resolution on the Keystone XL pipeline is still months away, and it’s possible President Obama could wait until after the midterm elections in November to make his decision.

The State Department said in a report Friday that the proposed project, which would send oil from Canada’s tar sands to Gulf Coast refineries, is not likely to lead to a surge in greenhouse-gas emissions. This finding paves a path to yes for Obama, who said last summer he would only approve the pipeline if it didn’t “significantly exacerbate” global warming.

But the report doesn’t mean he will approve a permit for the project, at least not yet, and it doesn’t mean he won’t say no. At the very least, we can expect to wait a few more months.

“They control the clock, and they control the options,” said Kevin Book, managing director of energy consulting firm ClearView Energy Partners.

Supporters of the pipeline in Congress are not happy about the prospect of a long delay for political reasons. “To suggest that this can wait until after a midterm election is nothing more than kicking the can down the road and not doing the job that we were elected to do,” said Sen. Heidi Heitkamp, D-N.D. “I suppose we could quit everything we’re supposed to be doing because of an election. There is always going to be an excuse to delay this.”

Here’s how the process plays out now. Departing from past precedent, the State Department is allowing a 30-day public comment period, which starts Wednesday. According to multiple sources, this time period runs alongside a parallel step where the State Department, in consultation with at least eight different federal agencies, determines whether the pipeline is in the country’s national interest.

The State Department will consider several factors, including energy security and environmental and economic impacts. The process cannot take longer than 90 days, according to the executive order establishing this authority, but it’s unclear when the clock starts. Multiple sources close to the process said it begins when the report is published in the Federal Register.

After the 90-day clock winds down, Secretary of State John Kerry is poised to make a final decision, which includes a 15-day review period for other federal agencies. If any agency requests it, the final decision could be moved from the State Department to the White House, where Obama would make the call. Conventional wisdom suggests that a final answer on this pipeline — which environmentalists have turned into a litmus test on Obama’s commitment to global warming — will come from the White House regardless.

The State Department’s inspector general is also expected to release a report determining whether the contractor for the environmental review — ERM Group — has a conflict of interest with TransCanada, the company seeking to build the pipeline. A spokesman said it will be released early this year, and that could also further delay the project, depending on the findings.

All told, the remaining part of the regulatory process should take about four months, which would put a final decision around June. But the law doesn’t set a deadline for a decision after the 90-day clock runs out, so in theory the administration could delay its answer for any number of reasons for any amount of time.

“How long does it take to analyze public comments on the national interest determination? Is that another year?” Book asked.

Book was driving home the point that the time frame for a final answer on Keystone, which has been in the regulatory pipeline at the State Department since September 2008, is still uncertain despite Friday’s report indicating Obama has a basis to green-light it.

“I’m going to do everything I can to encourage a shorter time period,” Heitkamp said. “That’s important because if we don’t get an opportunity to construct in the summer and fall we lose a lot of time.”

Heitkamp is one of a handful of Democrats who support legislation approving the pipeline irrespective of Obama’s authority. She said Friday she wanted to talk to her colleagues before deciding whether or when to try to get a vote on that bill. She said she would also encourage the administration to shorten the 90-day period to 30 days.

Critics of the project are unhappy with Friday’s report and are already demanding more analysis, indicating a potential for further delay.

“I will not be satisfied with any analysis that does not accurately document what is really happening on the ground when it comes to the extraction, transport, refining, and waste disposal of dirty, filthy tar sands oil,” said Senate Environment and Public Works Committee Chairwoman Barbara Boxer, D-Calif.

If the State Department does opt for more analysis, or allows more time for public comments, the timeline could easily get pushed from summer to autumn, putting it right up against the midterm elections, where Democrats’ control of the Senate is at risk.

TransCanada CEO Russ Girling said he hopes the remaining part of the process could be shortened.

“Whether this gets pushed further into fall and election season, I would hope not,” he said. “There is no reason for that.”

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