Building More Uncertainty

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Just before press time for this issue, the Keystone XL pipeline was dealt a one-two punch that would make anyone dizzy with uncertainty. On the same day that U.S. President Barack Obama refused to cave to Canadian Prime Minister Stephen Harper’s urging to approve the controversial project, a Nebraska judge ruled that the law that allowed the pipeline to be rerouted through the state was unconstitutional. And POOF! More fresh clouds of doubt circled overhead.

It would have been all too easy for Keystone XL to be approved following the release of the latest environmental impact statement to say the project would have no significant impact on greenhouse gas emissions and the subsequent 30-day public comment period that was set to end March 7.

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Instead, TransCanada is back to the proposition of seeking approval for its route through the Cornhusker state. On Feb. 19, Lancaster County District Judge Stephanie Stacy declared the 2012 law that was used to reroute the Keystone XL pipeline through Nebraska improperly gave Gov. Dave Heineman authority to approve the pipeline route. That job should have been that of the Nebraska Public Service Commission. The judge granted a permanent injunction to prevent the governor and the Nebraska Department of Environmental Quality from taking any further action to advance the pipeline.

Meanwhile, during a visit to Mexico, Obama said there would be no hurrying along of the administration’s decision to approve the project.

“Keystone will proceed along the path that already has been set forth,” he said. The president, however, did say he recognized that Harper views the review as “a little too laborious.”

This of course isn’t the first time a Canadian official has tried to pressure the U.S. government to make a decision on the project. Almost a month before Obama’s comments, during a Jan. 16 speech to the U.S. Chamber of Commerce, Canadian Foreign Affairs Minister John Baird called for the end of the “state of limbo” surrounding the project.

“If there’s one message I’m going to be promoting on this trip, it’s this: the time for Keystone is now,” Baird said. “I’ll go further — the time for a decision on Keystone is now, even if it’s not the right one.”
To which U.S. Secretary of State John Kerry responded by indicating a continued protraction of the decision, saying that there were “a lot of questions” raised about the project in a long public comment period the State Department conducted.

“Those comments have necessitated appropriate answers,” he said. “I can promise our friends in Canada that all the appropriate effort is being put into trying to get this done effectively and rapidly.”

The recent ruling in Nebraska hasn’t shaken TransCanada CEO Russ Girling’s resolve. And why should it? The company has been at this process for more than five years. Why quit now? Girling called Stacy’s court decision a “solvable problem.” He gave clear indication that these recent developments would not derail the project. Though, maybe “derail” isn’t the right word, as the company has expressed interest in exporting Canadian crude by railcar if the pipeline permit is ultimately denied.

If there’s one thing you can say about the Keystone XL project, it has never failed to provide drama in the pipeline industry.

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