Keystone Pipeline Suspended

UPDATE – Washington Post:

The administration is preparing to reject a cross-border permit for the project aimed at transporting hundreds of thousands of barrels of heavy crude oil from Canada’s oil sands region to Gulf Coast refineries, according to several individuals who have been briefed but spoke on the condition of anonymity because the White House’s decision has not been announced. In asking for a delay, TransCanada could hand the issue, which has come to symbolize the broader battle over how the United States should address climate change, to the next U.S. president.

The Nebraska Public Service Commission is reviewing the pipeline’s route in the state after residents there challenged the state’s approval process for the project, and TransCanada argued in a letter to Secretary of State John F. Kerry that it would be “appropriate” to delay any federal decision until the Nebraska route is settled. The company first applied for a presidential permit seven years ago.

TransCanada’s president and chief executive, Russ Girling, noted Monday that when residents challenged the approval process for the pipeline in Nebraska’s courts, “the State Department found it appropriate to suspend its review until that dispute was resolved. We feel under the current circumstances a similar suspension would be appropriate.” The Nebraska review, the company said, could take between seven and 12 months.

A State Department official said officials were reviewing the letter.

Earlier Monday, White House press secretary Josh Earnest said that “our expectation at this point . . . is that the president will make a decision before the end of his administration on the Keystone pipeline, but when exactly that will be I don’t know at this point.”

Obviously, with the price of oil as low as it is today, the incentive to keep pushing on the pipeline deal is much lower than a few years ago.  There are complicating factors..

CNNMoney:

Given the (oil) price plunge, there’s also less urgency to ramp up production of the Canadian oil that Keystone XL would transport.

That’s because it’s very expensive to extract and clean the black stuff emerging from the oil sands of Alberta.

Oil producers in Calgary may decide to shelve new investment plans if oil stays this cheap, although overall production will still likely increase this year.

Then again, there may now be even more demand for Keystone XL from an infrastructure perspective. Calgary-based Suncor Energy told analysts this week that with prices so low, it’s no longer economic to ship crude by rail to the U.S. Gulf Coast.

“They need this pipeline more than ever because transporting oil via rail is more expensive,” said Essner.

KJRH Tulsa:

TORONTO (AP) — The company behind the controversial Keystone XL pipeline from Canada to the U.S Gulf Coast has asked the U.S. State Department to pause its review of the project.

TransCanada said Monday a suspension would be appropriate while it works with Nebraska authorities for approval of its preferred route through the state. The move comes before the Obama administration was widely expected to reject it.

For seven years, the fate of the 1,179-mile (1,900 kilometer) long pipeline has languished amid debates over climate change, the intensive process of extracting Alberta’s oil and U.S. energy security

The pipeline has long been a flashpoint in the U.S. debate over climate change. Critics oppose the concept of tapping the Alberta oil sands, saying it requires huge amounts of energy and water, increases greenhouse gas emissions.