TransCanada expected to reapply for Keystone pipeline permit as soon as Friday

05 04, 2012 by The Washington Post

The Canadian firm behind the controversial Keystone XL pipeline will reapply Friday for a federal permit to ship crude oil from the oil sands fields of Alberta to the United States, according to people familiar with the company’s plans.

In January, the Obama administration denied a permit to Trans­Canada, the firm that would build the project, on the grounds that a congressionally mandated deadline of Feb. 21 did not give officials enough time to evaluate the pipeline’s impact. Since then, TransCanada has said it would proceed with plans to construct a segment that did not require a presidential permit — from Cushing, Okla., to Port Arthur, Tex.

The company also unveiled a new route for the pipeline through Nebraska. President Obama, environmentalists and many Nebraskans — including the state’s Republican governor, Dave Heineman — had raised concerns that the project’s original route could imperil Nebraska’s ecologically sensitive Sandhills region, as well as the Ogallala aquifer, a major source of drinking water for state residents.

The new route would steer clear of the Sandhills region, although it still runs over parts of the Ogallala aquifer. Environmentalists say that Nebraska officials have defined the Sandhills region too narrowly and that the revised route will traverse the Sandhills in Nebraska’s northern Holt County.

The Keystone pipeline project, a point of contention between environmentalists and some labor unions, has divided the Democratic base. It has unified Republicans behind what they contend is a critical source of energy for the United States. Presumptive Republican nominee Mitt Romney, along with GOP congressional leaders, have called on Obama to approve the pipeline.

The State Department has jurisdiction over the pipeline permit because the project crosses an international border. The original pipeline was slated to run 1,700 miles from Hardisty, Alberta — an area known for oil sands or tar sands — to Port Arthur. In Canada, operators extract a viscous oil called bitumen from formations of sand, clay and water, using a process that consumes more energy and water than conventional drilling. NASA official James E. Hansen and other scientists have warned that oil sands activity could accelerate global warming to dangerous levels.

One individual familiar with TransCanada’s plans — who spoke on the condition of anonymity because the announcement had not been made — said the company will inform U.S. officials that the pipeline segment running between Cushing and Port Arthur is not part of its application because it does not require federal approval.

The application will include the new Nebraska route.

When asked about the pipline matter Thursday, TransCanada spokesman Terry Cunha replied in an e-mail, “We are working on re-filing our application for a presidential permit for Keystone XL and hope to do that soon.”

TransCanada chief executive Russ Girling had a closed-door meeting Thursday with Kerri-Ann Jones, the assistant secretary of state who oversaw the original presidential permit application.

The State Department declined to comment on the subject.

House Speaker John A. Boehner (R-Ohio) said in a statement that Obama no longer has an excuse to block construction of the pipeline. “With Nebraska now on board and the application being re-filed, the president has lost his always-flimsy excuse for blocking this job-creating project,” the statement said. “With energy security at stake and jobs on the line, he should listen to the American people, not just his political base, and approve it immediately.”

Jane Kleeb, executive director of the group Bold Nebraska, said the tweaks that TransCanada made to the pipeline’s route do not justify federal approval.

“The fundamental facts remain; Americans are being asked to put clean water at risk for an extreme form of energy that will add nothing to our energy security,” Kleeb wrote in an e-mail.

The lower segment of the pipeline, from Oklahoma to Texas, is backed by Obama and congressional Republicans. It would cost $2.3 billion to build, transport 700,000 barrels a day starting in mid-to-late 2013 and alleviate a glut of oil at Cushing, a major energy terminal.

TransCanada is moving ahead on obtaining permits needed to build the Oklahoma-Texas leg of the pipeline, having recently submitted applications to district offices of the Army Corps of Engineers in Tulsa, Fort Worth and Galveston.

If the Corps does not respond within 45 days, the permits are automatically approved and construction can proceed, according to federal law.

An Environmental Protection Agency official has raised questions about whether that leg of the project qualifies for such an expedited review.

In a Nov. 8 letter to the Corps’ Galveston office, Jane Watson, associate director of ecosystems protection for the EPA’s Region VI, said the project warrants a more detailed environmental assessment.