Nebraska’s top politicians have thrown their support behind TransCanada Corp. ’s Keystone XL pipeline, and are urging the U.S. federal government to “expedite” its approval.
Nebraska’s opposition was cited by the U.S. State Department last week as the reason for delaying a decision on the $7-billion (U.S.), 2,700-kilometre pipeline, which would open crucial new markets on the U.S. Gulf Coast to oil sands crude.
At a news conference on Tuesday, Governor Dave Heineman threw his support behind an agreement reached between TransCanada and key Nebraska legislators to reroute the pipeline around the environmentally sensitive Sand Hills region.
Mr. Heineman said state officials would work with TransCanada to “expedite” the changes to the route – which would shift the path of the pipeline by as much as 50 kilometres – and added he wants the Obama administration to move quickly in granting final approval.
“Our most important objective all along was to move the route,” he told a web-cast news conference from Lincoln.
“So if we can expedite the supplemental environmental impact assessment and get moving on the construction of the pipeline, we’re all for that,” he said.
“We got to do our part first and once they get it, I hope they will expedite it.”
The state’s two federal senators, Democrat Ben Nelson and Republican Mike Johanns, also came out in support of the Keystone project on Tuesday after opposing the route through the Sand Hills.
The Obama administration last week said it would hold off on making a decision on Keystone XL, with the delay stretching past the 2012 presidential election. It singled out Nebraska’s Sand Hills as a concern, and wanted TransCanada to consider redesigning its plan so the pipeline would avoid this environmentally sensitive region.
The State Department decision raised concerns in Ottawa about the security of access to U.S. markets, and Prime Minister Stephen Harper and his ministers said the delay underscored the need to open new markets in Asia.
But even if Keystone XL is back on track, Ottawa remains determined to expand the export market for Canadian oil and gas beyond the United States. Natural Resources Minister Joe Oliver – along with Mr. Harper and Finance Minister Jim Flaherty – said last week’s announcement that the State Department was delaying a final decision underscored the need to build oil and gas pipelines to the west coast.
“Diversification of our markets is fundamental,” Mr. Oliver said. “I really want Keystone to go ahead but it’s not going to change our focus on diversifying our markets. It’s an absolutely fundamental objective of our government – I’d call it an urgent objective.”
Mr. Oliver said he was more optimistic the project will receive final approval from Washington, but said it is unclear how long the additional review will take. TransCanada officials said Monday they expected to be able to complete a supplemental environmental impact statement within six to nine months, but an unnamed State Department official told The Wall Street Journal the full review would take 12 to 18 months.
In New York on Tuesday, Alberta Premier Alison Redford said the Keystone project is a critical part of her province’s economic development, but also “one piece of the puzzle” in a needed North American energy strategy.
“We believe that Keystone is important for our economic development, but we also believe that there are tremendous benefits for the United States,” she said. “It’s not my job as a leader of a government to lobby in the regulatory process for that, but it is important for us to talk about how we see this as an important link in what we can do in the future as partners.”
Ms. Redford was in New York Tuesday and was in Washington Monday, where she met with top lawmakers and bureaucrats, including State Department officials and House of Representatives Speaker John Boehner.
Now that TransCanada decided to co-operate with Nebraskans, Ms. Redford said she has greater confidence the U.S. will eventually give the pipeline its blessing.
However, TransCanada lobbyist David Wilkins said the Obama administration does not appear to want to deal with a pipeline decision before next November’s election.
“Any way you shake it, it looks like the decision has been put off past the election, which I believe was the intention to start with,” said Mr. Wilkins, former U.S. ambassador to Canada and now working as a lawyer in South Carolina.
“The agreement in Nebraska won’t satisfy others who don’t want the pipeline at all and they’re going to continue to put pressure on the administration, he said. “So it is certainly premature to proclaim victory, but this is certainly a good positive step, no doubt about that.”
Indeed, environmentalists vowed to keep up the pressure on the Obama administration to deny the permit to TransCanada, on the grounds that the pipeline would deepen U.S. dependence on oil and specifically on oil sands bitumen, which produces relatively high amounts of greenhouse gases.
“What the presidential permit has to look at is the concerns about everybody in the whole country and that is going to be the big decision that still has to happen,” said Susan Casey-Lefkowitz, director of the international program for the Natural Resources Defence Council in Washington.
Ms. Casey-Lefkowitz said both the delay and the rerouting represented major losses for “Big Oil,” and that it remains to be seen whether an acceptable route can now be found.