Keystone XL gets blessing from U.S. State Department, clears major hurdle -

Keystone XL gets blessing from U.S. State Department, clears major hurdle


WASHINGTON – The U.S. State Department says TransCanada’s Keystone XL pipeline won’t have a major impact on Alberta’s oilsands development, a critical finding that could make it easier for the White House to green-light the controversial project.

The pipeline “remains unlikely to significantly impact the rate of development of the oilsands or the demand for heavy crude oil in the United States,” a State Department official told reporters in a conference call Friday mere minutes after the draft report was released to the public.

Canada will develop its lucrative oilsands “with or without the proposed project,” the State Department’s draft analysis reads.

“Approval or denial of the proposed project is unlikely to have a substantial impact on the rate of development in the oilsands, or on the amount of heavy crude oil refined in the Gulf Coast area.”

The report also says the $7-billion pipeline, which would carry bitumen from Alberta’s carbon-intensive oilsands through six U.S. states to Gulf Coast refineries, would cause “no significant impacts to most resources along the proposed project route.”

U.S. President Barack Obama rejected TransCanada’s original permit application last year due to concerns about the pipeline’s proposed path across a crucial aquifer in the state of Nebraska.

He invited the Calgary-based company to submit a new application with an altered route; TransCanada did so last fall.

The State Department has now given that new route its blessing, too, despite claims by environmentalists that the risks to the Sand Hills region of the state remained dire.

“The new proposed route is 509 miles shorter than the previously proposed route; however, it would be approximately 21 miles longer in Nebraska to avoid sensitive areas including the… Sand Hills region,” the lengthy report reads.

The findings represent the clearing of a significant hurdle for TransCanada in its marathon bid to win approval for Keystone XL from the Obama administration.

It wasn’t all good news for TransCanada, however.

The report also cast doubt on one of the strongest pro-pipeline arguments — that Keystone XL will help the U.S. meet its energy needs.

In fact, the report suggests the growth in rail transport of oil from western Canada and America’s Great Plains could provide plenty of energy for the U.S. over the next decade, regardless of whether the pipeline is ever built.

The analysis also put a far more conservative estimate on the number of jobs that would be created by Keystone XL. Proponents of the pipeline have predicted a veritable hiring bonanza, with some Republicans suggesting hundreds of thousands of jobs are in the offing.

But the report said that while the pipeline’s construction would support 42,100 jobs during the one- to two-year construction period, with total wages of about $2 billion, only 35 permanent and temporary jobs will remain once Keystone XL is fully operational.

The State Department will now hold 45 days of public hearings into the draft report’s findings, something assistant Secretary of State Kerri-Ann Jones stressed repeatedly throughout the brief conference call.

For that reason, she said, the analysis shouldn’t be perceived as the department’s final word on Keystone XL.

“This paper does not come out one way or the other and make a decision about what should happen with this project,” she said.

“We’re not at that stage in the process…. We’re looking at this very objectively. We want to make sure we serve the best interests of our country, so we are really taking a very thorough look and we’re waiting for everyone to comment and give us their feedback.”

That didn’t assuage environmentalists who have railed against the project for years as a symbol of “dirty oil,” one that also poses serious threats to communities and wildlife along its path.

Bill McKibben, head of, called the report “astonishing.”

The State Department, tasked with assessing Keystone XL because it crosses an international border, is sorely mistaken that the pipeline won’t fuel more oilsands development, he said, adding that finding is “at odds” with scientists around the world.

“Everybody who reads the industry press in Canada, anyone who pays attention to the financials, knows that if they don’t have it, they aren’t going to be able to expand the tarsands the way they want to,” McKibben said.

“We’re hopeful that President Obama and Secretary of State Kerry conclude that the bureaucrats have done a poor job here.”

Canada’s natural resources minister Joe Oliver didn’t comment directly on the report saying the government is reviewing it.

Both Obama and Kerry have given environmentalists hope that Keystone might be nixed, given their respective high-profile pledges in recent weeks to do battle against climate change.

Obama himself will ultimately decide whether to approve the pipeline. That decision could still be months away, however.

The State Department will need to respond to the public comments on its draft analysis before finalizing the report. As well, State officials still have to conduct a separate examination into whether Keystone XL is in the national interest of the United States.

One pipeline proponent offered a jaundiced view about the progress.

“In 2010, we went through this process and it took nearly a year between when the State Department released the draft environmental impact statement and draft supplemental report,” Terry Lee, a Republican congressman from Nebraska, said in a statement.

“So while I’m pleased to see this process is again moving forward, I have zero confidence that this matter will be resolved in a timely fashion. We’ve been to this rodeo before.”

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