The pipeline, which requires a federal permit from the State Department because it crosses an international border, has been under review for more than three years.
In early November, the administration delayed making a national interest determination on the pipeline on the grounds that it needed to avoid crossing sensitive terrain in Nebraska’s Sandhills region. At the time, officials predicted that the process of rerouting the pipeline and the subsequent environmental review would extend the permitting process into early 2013.
But language inserted in last month’s payroll tax extension forces President Obama to make a decision by Feb. 21. Administration officials have said that the truncated timeline makes it difficult to complete a review of whether the pipeline is in the national interest, given the fact TransCanada has yet to outline an alternate route.
The Obama administration is conducting an analysis of how it can reject the controversial 1,700-mile pipeline proposed by the Canadian firm TransCanada without foreclosing the possibility of it altogether, according to individuals familiar with the process who asked not to be identified because they were not authorized to speak on the matter.
Its supporters say the project would create jobs and provide the United States with a stable energy supply from Canada; its foes say it will accelerate climate change by transporting energy-intensive crude oil that could spill and harm fragile habitat.
Environmentalists such as Susan Casey-Lefkowitz of the advocacy group Natural Resources Defense Council, said she and others are “very confident the White House is going to reject the pipeline given the timeline that they have.”
Even the project’s most determined backers, such as the Business Roundtable’s president and chief executive, John Engler, say they recognize that Obama could chafe at having his hand forced.
“I think the timing is just unfortunate, because we’re close to an election,” Engler said. “I mean, I think if we were five days after an election, it would be a no-brainer to be approved.”
TransCanada spokesman Terry Cunha said the company received guidance just last month from the Nebraska Department of Environmental Quality on what areas in the Sandhills were off-limits, adding that the firm will be able to have the new route’s outline ready between June and September.
In the days before passage of the payroll tax extension last month, State Department officials warned that they would have to reject a permit if they lacked adequate time for a review.
Earlier this month, State Department spokeswoman Victoria Nuland would not say whether a rejection was certain, telling reporters “we are using our 60 days and we are analyzing the Keystone provisions, and we will make an appropriate decision consistent with relevant law.”
In the meantime, House Speaker John A. Boehner (R-Ohio) launched a “countdown clock” that ticks off the time until the permitting deadline expires and posted a video on YouTube that touts the pipeline as a chance to create jobs with private investment. Playing off Obama’s mantra of “We Can’t Wait,” the video flashes phrases across the screen including, “We Can’t Wait for Leadership. We Can’t Wait for Jobs.”
Environmentalists note that in December 2010, according to Boehner’s financial disclosure forms, he invested $10,000 to $50,000 each in seven firms that had a stake in Canada’s oil sands, the region that produces the oil the pipeline would transport. The firms include six oil companies — BP, Canadian Natural Resources, Chevron, Conoco Phillips, Devon Energy and Exxon — along with Emerson Electric, which has a contract to provide the digital automation for the first phase of a $9.4 billion Horizon Oil Sands Project in Canada.
Bill McKibben, a climate activist and co-founder of the group 350.org, wrote in an e-mail that Boehner has received more than $1 million from fossil-fuel companies, “and now we find out that he’s got extensive personal investments in companies dependent on tarsands oil.”
“He was willing to shut down the government in part to prevent enough time for serious environmental review,” McKibben added. “In any other facet of our public life . . . this whole list taken together would be seen for the gross conflict of interest that it is.”
Boehner spokesman Michael Steel said in an interview that an investment adviser chooses Boehner’s financial investments. “He doesn’t have any control over day-to-day trades, so there’s no conflict of interest on this or any other investment,” Steel said of the speaker, adding that when it comes to the upcoming decision on Keystone XL, “We hope the president will do the right thing and approve the permit, and create American jobs.”
The petroleum institute is echoing the same theme in ads it is airing until the end of the month in Illinois, Indiana, Iowa, Michigan, Ohio, Nebraska and the District, showing a clip of Obama vowing, “I will do whatever it takes to put the economy back on track.”
“He promised,” the female announcer intones. “Now’s his chance.”
Sen. John Hoeven (R-N.D.), who has drafted legislation that would allow Congress to give the project the go-ahead even if Obama rejects it, highlighted Keystone XL in the GOP weekly radio address.