As one might imagine, the decision, or non-decision if you prefer, is being received differently by different people. Some of those opposed to the project are, perhaps prematurely, celebrating a final victory, taking comfort in earlier statements from TransCanada officials that any delay in the permitting process would kill the pipeline. Others, both in favor and opposed, are reacting with cynicism, suspecting the delay is a political ploy meant to gain votes in the November 2012 presidential election.
Those in favor of the project are, of course, disappointed and quick to accuse the Obama administration of squandering job opportunities and diminishing energy security. For its part, TransCanada is putting a brave face on the situation with its CEO Russ Girling stating, "We remain confident Keystone XL will ultimately be approved."
While we can take some small comfort that this incredibly carbon-intensive, environmentally-destructive fuel won't be flowing at its maximum rate for a couple more years, there still seems to be a sad inevitability to the project. The technological breakthroughs needed to make this energy source a thing of the past can't come soon enough.
Make your way past the break for the official announcement from the State Department and the responding press statement by TransCanada. For a nice calm analysis of the situation and the decision/non-decision, the documents are accompanied by a video from PBS Newshour addressing the situation.
Office of the Spokesperson
November 10, 2011
Executive Order 13337 authorizes the Department of State to lead the review of Presidential Permit applications for transborder pipelines, granting the Department discretion in determining what factors to examine to inform a determination of whether the proposed project is in the national interest. Since 2008, the Department has been conducting a transparent, thorough and rigorous review of TransCanada's application for the proposed Keystone XL Pipeline project. As a result of this process, particularly 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.
As part of the National Interest Determination process, the State Department held a public comment period, including public meetings in the six potentially affected states and Washington, D.C., to increase the opportunity for public comments. During this time, the Department also received input from state, local, and tribal officials. We received comments on a wide range of issues including the proposed project's impact on jobs, pipeline safety, health concerns, the societal impact of the project, the oil extraction in Canada, and the proposed route through the Sand Hills area of Nebraska, which was one of the most common issues raised. The comments were consistent with the information in the final Environmental Impact Statement (EIS) about the unique combination of characteristics in the Sand Hills (which includes a high concentration of wetlands of special concern, a sensitive ecosystem, and extensive areas of very shallow groundwater) and provided additional context and information about those characteristics. The concern about the proposed route's impact on the Sand Hills of Nebraska has increased significantly over time, and has resulted in the Nebraska legislature convening a special session to consider the issue.
State law primarily governs routes for interstate petroleum pipelines; however, Nebraska currently has no such law or regulatory framework authorizing state or local authorities to determine where a pipeline goes. Taken together with the national concern about the pipeline's route, the Department has determined it is necessary to examine in-depth alternative routes that would avoid the Sand Hills in Nebraska in order to move forward with a National Interest Determination for the Presidential Permit.
Based on the Department's experience with pipeline project reviews and the time typically required for environmental reviews of similar scope by other agencies, it is reasonable to expect that this process including a public comment period on a supplement to the final EIS consistent with NEPA could be completed as early as the first quarter of 2013. After obtaining the additional information, the Department would determine, in consultation with the eight other agencies identified in the Executive Order, whether the proposed pipeline was in the national interest, considering all of the relevant issues together. Among the relevant issues that would be considered are environmental concerns (including climate change), energy security, economic impacts, and foreign policy.
TransCanada to Work with Department of State on New Keystone XL Route Options
CALGARY, Alberta - November 10, 2011 - TransCanada Corporation (TSX, NYSE: TRP) (TransCanada) has spoken with the U.S. Department of State (DOS) and will have conversations with the DOS in the coming days to discuss next steps. The company has been informed further analysis of route options for the Keystone XL pipeline need to be investigated, with a specific focus on the Sandhills in Nebraska. The Department of State said in its news release the review could be completed as early as the first quarter of 2013.
"We remain confident Keystone XL will ultimately be approved," said Russ Girling, TransCanada's president and chief executive officer. "This project is too important to the U.S. economy, the Canadian economy and the national interest of the United States for it not to proceed."
But Girling acknowledges while Keystone XL remains the best option for American and Canadian producers to get their oil to the U.S. Gulf Coast, today's announcement by the DOS could have potential negative ramifications, especially where shippers and U.S. refiners are concerned.
"Supplies of heavy crude from Venezuela and Mexico to U.S. refineries will soon end," said Girling. "If Keystone XL is continually delayed, these refiners may have to look for other ways of getting the oil they need. Oil sands producers face the same dilemma - how to get their crude oil to the Gulf Coast."
Girling points out TransCanada has worked with the State Department for the past three years to ensure Keystone XL would be the safest pipeline ever built.
Since 2008, more than 100 open houses and public meetings in six States took place, thousands of pages of supplemental information and responses to questions were submitted to state and federal agencies and the DOS received over 300,000 comments on the project. A draft, supplemental draft and Final Environmental Impact Statement were all issued for Keystone XL - totaling over 10,000 pages. This was by far the most exhaustive and detailed review ever conducted of a crude oil pipeline in the United States.
Fourteen different routes for Keystone XL were studied, eight that impacted Nebraska. They included one potential alternative route in Nebraska that would have avoided the entire Sandhills region and Ogallala aquifer and six alternatives that would have reduced pipeline mileage crossing the Sandhills or the aquifer. TransCanada hopes this work will serve as a starting point for the additional review and help expedite the review process.
The U.S. consumes 15 million barrels of oil each day and imports 10 to 11 million. Forecasts predict oil consumption will continue at these levels for the next two to three decades so a secure supply of crude oil is needed for Americans to continue to heat their homes, cook their food and drive their cars.
Keystone XL is shovel-ready. TransCanada is poised to put 20,000 Americans to work to construct the pipeline - pipe fitters, welders, mechanics, electricians, heavy equipment operators, the list goes on. Local businesses along the pipeline route will benefit from the 118,000 spin-off jobs Keystone XL will create through increased business for local restaurants, hotels and suppliers.
Five billion dollars in property taxes paid by TransCanada over the lifetime of the project will allow counties in States along the pipeline route to invest in new schools, roads and hospitals.
"If Keystone XL dies, Americans will still wake up the next morning and continue to import 10 million barrels of oil from repressive nations, without the benefit of thousands of jobs and long term energy security," concluded Girling. "That would be a tragedy."
With more than 60 years experience, TransCanada is a leader in the responsible development and reliable operation of North American energy infrastructure including natural gas and oil pipelines, power generation and gas storage facilities. TransCanada's network of wholly owned natural gas pipelines extends more than 57,000 kilometres (35,500 miles), tapping into virtually all major gas supply basins in North America. TransCanada is one of the continent's largest providers of gas storage and related services with approximately 380 billion cubic feet of storage capacity. A growing independent power producer, TransCanada owns, or has interests in, over 10,800 megawatts of power generation in Canada and the United States. TransCanada is developing one of North America's largest oil delivery systems. TransCanada's common shares trade on the Toronto and New York stock exchanges under the symbol TRP. For more information visit: www.transcanada.com and follow us on Twitter @TransCanada.
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