The U.S. State Department is exploring new routes for the Keystone XL pipeline through Nebraska, which will delay a decision on TransCanada's request for a construction permit on the American portion of the project.
"Since 2008, the department has been conducting a transparent, thorough and rigorous review of TransCanada's application for the proposed Keystone XL Pipeline project," said a U.S. State Department press release last week.
"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."
TransCanada Corporation's proposed Keystone XL pipeline expansion is a 3,200-kilometre, 36-inch crude oil pipeline stretching from Hardisty, Alberta to a delivery point near existing terminals in Nederland, Texas.
The $7 billion project was in the final stages of the Department of State's (DOS) 90-day review period and a final decision about whether or not to issue a Presidential Permit was expected in December.
However, TransCanada was contacted by the DOS on Nov. 10 and informed that further analysis of route options for the Keystone XL pipeline need to be investigated, with a specific focus on the Sandhills in Nebraska.
"I support the State Department's announcement today regarding the need to seek additional information about the Keystone XL Pipeline proposal," said Obama in a press release.
"Because this permit decision could affect the health and safety of the American people as well as the environment, and because a number of concerns have been raised through a public process, we should take the time to ensure that all questions are properly addressed and all the potential impacts are properly understood.
The DOS said this process including a public comment period on a supplement to the final Environmental Impact Statement (EIS) 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."
Dan Woynillowicz, spokesperson for the Pembina Institute, supports the decision to undertake an additional review of the Keystone XL pipeline.
"By ordering additional environmental review of the proposed Keystone XL pipeline, President Obama has made it clear that he has heard the concerns of Americans about environmental protection, climate change, and the need for the United States to create a clean energy future," he said."
"The fact that climate change will be explicitly considered in the final decision is notable given the higher greenhouse gas pollution associated with oilsands compared to other sources of oil."
The Alberta Federation of Labour also supports the decision to delay the pipeline.
"There's been a parade of Alberta government ministers travelling to the States to sell unprocessed bitumen," said Gil McGowan, president of the Alberta Federation of Labour (AFL).
"Now perhaps those same ministers can stay in Alberta and consider our needs and our future ahead of those of our neighbours south of the border."
The federation recommends that the provincial government use the delay as an opportunity to pursue value-added opportunities at home, rather than shipping unprocessed bitumen south for upgrading.
The final EIS was issued in August and found that Keystone XL would have no significant impacts and was in the national interest.
The initial EIS studied fourteen different routes for Keystone XL, with 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 located within it.
Journal of Commerce, Wed Nov 16 2011