Energy Policy, Oil, State Department

The Keystone XL Pipeline: More Debate and Delay?

The debate and delay surrounding the Keystone XL pipeline project proposed to be built by TransCanada Corp. continue.  When the State Department released its Final Supplemental Environmental Impact Statement (“FSEIS”) regarding the pipeline project on January 31, 2014 raising no significant environmental concerns related to the project (see our previous post), there was discussion about there being no more excuses for the President to delay approval.  Since then, a Nebraska court ruling affecting the pipeline’s path and additional research regarding the impact of the pipeline may have provided ammunition for those seeking to further delay the project.

On February 19, 2014, a Nebraska court overturned as unconstitutional the state law and Governor’s decision under which the pipeline had been approved to pass through the state, arguably in violation of landowners’ rights.  The Nebraska court held that the Nebraska Public Service Commission was the proper agency to decide the matter.  I noted in interviews for Law360 and The Washington Times, that the Nebraska decision could give the Obama Administration an excuse for delay: “it provides enough doubt that the State Department could put off any opinion until the morass in Nebraska is addressed.”  You can read more about my perspective on the impact of this decision in the Law360 article and Washington Times article.   On March 3, 2014, a report by The Carbon Tracker Initiative was released, challenging the State Department’s conclusions in the FSEIS regarding the significance of the impact of the pipeline on oil sands production.  An article on the report notes that “The Carbon Tracker’s interpretation is worth considering, if only because the State Department’s FEIS used the group’s methodology from previous studies in its own evaluation of the pipeline’s production implications, though the government arrived at different conclusions. (See footnote 154 in the market analysis section of the FEIS, which cites its work.)”  The 30-day public comment period on the State Department’s FSEIS closed on March 7th.  Public comments are posted at www.regulations.gov, Docket ID: DOS-2014-0003.

Despite the potential for further delay, proponents of the pipeline continue to push the administration for action.  On February 26, 2014, House Energy and Commerce Committee Chairman Fred Upton issued a Response to the State Department Inspector General’s Report regarding potential conflicts of interest in the environmental assessments of the Keystone XL pipeline, noting that “[w]hile the State Department is not guilty of bias in their review, this administration is surely guilty of foot-dragging and delaying construction of Keystone XL….It’s time for President Obama to put politics aside once and for all and put people to work building the pipeline in this so-called year of action.”  In an interview posted March 5th, Russ Girling, CEO of TransCanada, responded to criticism of the project and expressed confidence that the pipeline will be built:  “As things sit right now we do have an approved route in Nebraska. … seen as environmentally sound through five environmental reviews by the federal government  and through the Nebraska Department of Environmental Quality…. We’ll eventually get through that process. It’s just a matter of determining what is the legal process for us to have it reviewed.”

Brian Heslin

About Brian Heslin

Brian Heslin represents energy companies in regulatory proceedings at the state and federal level. In addition, he provides advice on busines and strategic planning, upstream natural gas supply and capacity negotiation, compliance and other related services.

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The landscape of the energy industry is rapidly changing, with a focus on the development of clean, domestic energy sources and a secure, reliable energy infrastructure driving significant changes in the interdependency of energy industry segments and an increase in government regulation. Continued growth in the domestic production of oil and natural gas has positioned the U.S. to be an energy exporter in the global market and will have a marked impact on the course of the industry’s development.

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