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TransCanada Asks Obama Admin. to Suspend Keystone XL Review

Facing an anticipated denial from the Obama administration, TransCanada has asked to suspend any further action on its permit for its cross-border Keystone XL pipeline.

A letter requesting the delay was sent to the U.S. State Department on Monday. The Wall Street Journal reported the letter read in part, “In order to allow time for certainty regarding the Nebraska route, TransCanada requests that the State Department pause in its review of the Presidential Permit application for Keystone XL.”

The company’s explanation for the decision involved allowing a review of the proposed path of the pipeline through Nebraska to take place before a decision is made about the permit. However, the Journal notes that the company may be hoping to avoid a negative decision from the Obama administration and instead push the decision until after the next election.

The request for the pipeline, which would allow TransCanada to ship tar sands south across the U.S. border to the Gulf Coast, was originally made in 2008. Because the pipeline would cross an international border, a permit is required from the State Department.

The Keystone XL pipeline has been a political football for several years. In early 2012, Prime Minister Stephen Harper expressed dismay that the U.S. might choose to deny the request for a permit to build the pipeline. He said at the time, “Look, the very fact that a ‘no’ could even be said underscores to our country that we must diversify our energy export markets.”

“Allowing the Keystone pipeline to be built requires a finding that doing so would be in our national interest,” President Obama said in June 2013. For the president, that seems to have come down to a decision about the pipeline’s possible impact on climate change.

Opponents of the pipeline, including the Sierra Club, have argued that processing tar sands is environmentally hazardous and would add millions of tons of carbon to the environment. Without the Keystone XL pipeline, opponents say, this large reserve of oil would remain in the ground.

TransCanada has always maintained that is not the case, saying the tar sands will be brought to market, possibly through an alternative pipeline to the east or west coast of Canada, if Keystone XL is not approved. However, the company’s change in approach may be partly the result of the recent drop in oil prices. With oil having dropped from $100 a barrel a few years ago to under $50 a barrel today, the demand for Canada’s tar sands is not as great as it once was.

Earlier this year, the Republican Congress passed a bill intended to force the president’s hand on the pipeline. President Obama vetoed that bill on February 24th. He said at the time that a final decision on the permit would come down to whether or not Keystone XL would make a net change in the amount of carbon released into the environment.

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