Barack Obama is refusing to give Ottawa the quick answer it wants on the Keystone XL pipeline in spite of a State Department report that dispels the U.S. President’s main climate-change fears.
The White House said Sunday it will wait at least another 90 days to make a final decision as it awaits vital input from other government departments and agencies, raising the possibility that the U.S. President may avoid a decision on the controversial project until after the November U.S. midterm elections for fear of alienating Democratic voters.
On Friday, the U.S. State Department answered Mr. Obama’s main concerns about climate change by concluding that the TransCanada Corp. pipeline would not significantly boost greenhouse gas emissions or Canadian oil sands output.
But White House chief of staff Denis McDonough, Mr. Obama’s top adviser, insisted the President is still looking for more guidance and won’t be rushed into a quick decision. Keystone XL would carry 830,000 barrels a day of diluted bitumen from Alberta’s oil sands and light oil from North Dakota’s Bakken fields to the massive refining complex on the U.S. Gulf Coast. Western oil producers are eager for expanded pipeline capacity to access new markets and avoid bottlenecks in the U.S. Midwest, but there has been significant opposition from environmentalists.
“The Friday report is an important input into the process. We’ll hear from other cabinet secretaries,” Mr. McDonough told NBC’s Meet the Press.
“We have one department with a study. Now we have other expert agencies … The president wants to make his decision based on the most sound science,” said Mr. McDonough.
Asked about the risk of a decision stretching beyond the election, Canada’s Natural Resources Minister Joe Oliver borrowed a hockey analogy, telling CTV’s Question Period that he hoped Mr. Obama won’t “rag the puck.”
In an e-mailed statement, Mr. Oliver acknowledged the decision is political and not tied to the findings of any one report. “I think everyone understands that it’s the President who is going to decide on this, irrespective of the process,” Mr. Oliver said.
Nonetheless, he said Ottawa expects “an expeditious decision.”
During a recent visit to Washington, Foreign Affairs Minister John Baird was even blunter about what Canada wants. “The time for a decision on Keystone is now, even if it’s not the right one. We can’t continue in this state of limbo,” he said.
The release of Friday’s report triggers a 90-day review period in which other U.S. departments and agencies can weigh in on various issues, including environmental effects, energy security and the economy. U.S. Secretary of State John Kerry has no firm deadline for making a final recommendation to Mr. Obama on whether the project is in the U.S. national interest.
Mr. McDonough hinted at those other issues, pointing out that the U.S. is quickly becoming energy self-sufficient and expressed concerns about climate change’s role in the continuing California drought.
Some industry analysts worry a final decision on Keystone might now be delayed until after the U.S. mid-term elections in November, leaving the issue in the hands of Mr. Obama’s successor.
“A final decision isn’t expected until this summer and could well occur after November’s congressional election,” Kevin Hebner of JP Morgan Chase Bank in New York said Sunday in a research note.
Meanwhile, a leading pipeline opponent said the State Department report is tainted by a conflict of interest. Tom Steyer, a billionaire Democratic Party donor, urged Mr. Kerry to conduct an independent review of the “defective” Jan. 30 environmental report on the pipeline.
The final environmental impact statement on Keystone “has suffered from a process that raises serious questions about the integrity of the document,” Mr. Steyer wrote to Mr. Kerry in a letter, according to Bloomberg News.
Mr. Steyer is the former chief executive officerof the hedge fund Farallon Capital Management LLC and a major donor to Mr. Obama, who is being pressed by Democratic donors to reject the pipeline amid more signs it is headed for approval. TransCanadaCorp.’s pipeline would carry Canadian oil sands crude to U.S. refineries in Texas.
Mr. Steyer said the impact statement is flawed because a TransCanada contractor, Environmental Resources Management, was hired to write the report. The company made “problematic representations” in conflict of interest disclosures about its oil industry ties, the letter claimed. “It is critical that an independent and transparent review … commence immediately,” wrote Mr. Steyer, founder of the NextGen Climate Action.
A TransCanada official was not immediately available for comment.