Expecting Rejection, TransCanada Instead Wants Keystone XL Review Suspended

Surprise gambit aims to delay project stopped by formidable opposition until oil prices and political climate are more favorable.

TransCanada's Keystone XL pipeline depot in Gascoyne, N.D., in February 2012. After many years of delay by the Obama administration and fierce opposition from activists, TransCanada requested on Oct. 30, 2015, to pause the State Department’s review of the project, perhaps in the hopes that a Republican will win the White House in 2016. Credit: Bret Clanton

TransCanada Corp. asked the State Department on Friday to suspend the Obama administration's prolonged review of the company's Keystone XL pipeline, the star-crossed project to carry tar sands crude oil from Canada across the midsection of the United States.

The surprise request suggests that the company feared that President Obama was about to reject the pipeline—and that, in any case, low oil prices had seriously undermined the project.

It's also the latest sign that fundamental changes confront the fossil fuel industry under the twin influences of shifting markets and a global transition away from high-carbon fuels, as climate negotiations reach a climax in Paris next month. Tar sands are among the dirtiest of fossil fuels.

TransCanada's move both startled and elated the pipeline's opponents, who have waged an unremitting campaign against the project for years. They say it would imperil sensitive ecosystems and lock in unacceptable greenhouse gas emissions for decades to come.

The company said a delay makes sense because the project remains under review in Nebraska. That was the birthplace of grassroots opposition that turned the project into a litmus test of Obama's commitment to fighting climate change.

Read: Keystone XL Pipeline: Everything You Need to Know in 23 Stories

"On October 5, TransCanada filed an application with the Nebraska Public Service Commission for approval of its preferred route in Nebraska," the company explained in its letter to Secretary of State John Kerry. "We have taken this action in light of litigation in Nebraska which called into question the constitutionality of the statute under which Governor Heineman had approved the route in 2013. It is anticipated that the route approvel process before the Public Service Commission will take seven to twelve months to complete."

Environmental advocacy groups called TransCanada's request for a delay a thinly disguised ploy to put the decision off until the next administration, in hopes that a Republican would win the White House. All the Democratic candidates, most recently Hillary Clinton, have come out against the pipeline.

The White House gave no indication whether the administration would grant TransCanada's request. It had said just before the news broke Monday only that the president expects to make a decision on the project before he leaves office in 2017.

"President Obama and Secretary Kerry have all the information they need to reject this dangerous pipeline, and we are counting on them to do just that," said Tiernan Sittenfeld of the League of Conservation Voters.

''Pause or no pause, we now know more than enough to do the right thing—reject the pipeline because it would worsen climate change," said Anthony Swift of the Natural Resources Defense Council. "Altering its route through Nebraska isn't going to change that. Keystone XL isn't in the national interest and the president should reject it."

The latest development is a feather in the cap of the grassroots opposition to the project.

Even though this request for delay came from the pipeline's builder, Senator Lisa Murkowski, R-Alaska, said the blame rests with the White House.

"The administration continues to say no by its failure to make a decision on approving the Keystone XL Pipeline until it becomes someone else's problem or until those who are attempting to invest in new American jobs simply give up," she said.

Nobody really expects the oil industry to just give up on the tar sands enterprise and its supporting infrastructure, whatever the short-term strains facing the Canadians.

But there's no sign that the remarkable grassroots movement that brought the Keystone XL to this point is about to give up, either.

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