Keystone pipeline owner TransCanada asks for delay in review

SEATTLE – The company that hopes to build the Keystone XL pipeline to carry crude oil from Canada to the Gulf Coast asked the Obama administration Monday to delay its review of the proposal – a striking turn that adds further uncertainty to a project that has triggered bitter debate since it was proposed seven years ago.

The company, TransCanada, made its request in a three-paragraph letter to Secretary of State John Kerry, citing legal challenges that have prompted the company to change tactics.

“TransCanada believes that it would be appropriate at this time for the State Department to pause in its review of the presidential permit application for Keystone XL,” the company wrote.

A State Department official said the agency was reviewing the request.

The request could make it more likely that the Obama administration, which has mulled over the proposal throughout the president’s two terms and appeared increasingly inclined to reject the pipeline, will leave the matter to whoever is elected in 2016.

It also reflects a remarkable turnabout by TransCanada, which has spent years complaining of delays in the process only now to request one itself.

Spokesman Mark Cooper said TransCanada was not withdrawing its application. Instead, he said, “we are asking the State Department to suspend a decision.”

Last month, after meeting stiff resistance from landowners in Nebraska, TransCanada decided to withdraw its plans to use a special state law that would allow the company to use eminent domain to seize land for its preferred pipeline route. The company instead applied for a permit through the Nebraska Public Service Commission, a process that could take a year.

The Keystone XL pipeline would carry more than 800,000 barrels of crude oil a day from the tar sands of Alberta across the U.S. border south to Gulf Coast refineries. Because the pipeline would cross an international border, the State Department must review it. President Barack Obama had said he would make the final decision.

Supporters say the project would boost jobs and contribute to energy security. Environmentalists contend that the pipeline would increase emissions of greenhouse gases.

The price of oil has plummeted dramatically since the pipeline was proposed, and the industry has pulled back from many large projects. Royal Dutch Shell recently announced it would abandon its effort to drill for oil in the Arctic Ocean “for the forseeable future.”

Even as TransCanada requested a delay, opponents of the project urged the administration to reject the project anyway.

“Today, tomorrow or next year, the answer will be the same: Keystone XL is a bad deal for America, our climate and our economy,” said Tom Steyer, the billionaire environmental activist. “Secretary Kerry should reject TransCanada’s request for delay, and President Obama should immediately reject the Keystone XL pipeline once and for all.”

While the request by TransCanada may free Obama of a politically thorny decision, the issue is not likely to go away for candidates in the 2016 election.

Obama has long argued that he would judge the pipeline based on whether it accelerates the effects of climate change, and secondarily on whether it would significantly affect how much Americans pay for energy.

“We’re not going to authorize a pipeline that benefits largely a foreign company if it can’t be shown that it is safe and if it can’t be shown that overall it would not contribute to climate change,” he said at a town hall meeting this year.

But while opponents of the project have been increasingly confident that the president would ultimately reject it, Obama has also suggested that its political boosters and to some degree its detractors have overstated its potential impacts.

“I’ve just tried to give this perspective,” he told reporters last December.

Hours before TransCanada’s request, the White House had said it expected that Obama would make a decision about the pipeline “before the end of his administration,” but did not specify when.

Keystone has not emerged as a major campaign issue in the early stages of the 2016 presidential campaign, particularly in a Republican field dominated by issues such as immigration, foreign policy and broader economic issues.

But Keystone long ago evolved into shorthand among conservatives as an example of liberal overreach, and some Republicans have cited the Obama administration’s long-simmering decision-making on the pipeline as an example of how it stifled potential job-creating projects to advance its environmental agenda.

Democratic presidential hopeful Hillary Rodham Clinton announced in September that she would oppose the project, after months of being silent on an issue that she had confronted during her time as secretary of State.

“It is imperative that we look at the Keystone pipeline for what I believe it is: a distraction from the important work we have to do to combat climate change and, unfortunately from my perspective, one that interferes with our ability to move forward,” she told voters in Iowa.

Her main rival for the Democratic nomination, Sen. Bernie Sanders of Vermont, also opposes the project.

Republican presidential contenders support Keystone.

CREDO Action, a liberal activist group, said TransCanada’s decision was a “desperate” attempt to prevent Obama from blocking the project altogether.

“This is President Obama’s decision, and he shouldn’t cave to a foreign oil company trying to twist his arm into punting it to future presidents,” Elijah Zarlin, CREDO’s climate campaign director, said in a statement.

But Sen. Heidi Heitkamp, a North Dakota Democrat who supports the project, expressed frustration at how the project had been conflated “into the foremost emotional and overly politicized issue” it had become.

“Halting a basic infrastructure expansion project will not make this country more energy efficient or independent, but it does set a foreboding precedent about our ability to achieve those goals,” she said.