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Keystone XL: Canada-US pipeline route decision delayed Keystone XL: Canada-US pipeline route decision delayed
(about 2 hours later)
The Obama administration is to reassess the route of a controversial Canada-US oil pipeline, delaying a decision on the project by up to 18 months.The Obama administration is to reassess the route of a controversial Canada-US oil pipeline, delaying a decision on the project by up to 18 months.
Studying a new route for Keystone XL is now expected to push the final decision past the 2012 presidential election.Studying a new route for Keystone XL is now expected to push the final decision past the 2012 presidential election.
The state department's handling of the $7bn (£4.4bn) project is already under review for alleged wrongdoing.The state department's handling of the $7bn (£4.4bn) project is already under review for alleged wrongdoing.
The 1,600-mile (2,700-km) pipeline would run from Canada to the Texas coast. The 1,600-mile (2,700km) pipeline would run from Canada to the Texas coast.
The state department is handling public consultations on the project as the pipeline would cross the US border with Canada. In a statement Thursday, the department said it would take a "in-depth assessment of potential alternative routes in Nebraska".
Stiff opposition has come from Nebraska and environmental groups as the pipeline's route was originally planned through the state's Sand Hills regions - which contains a major aquifer.
A new route review "could be completed as early as the first quarter of 2013", the department said in a statement.
Correspondents say the delay will spare US President Barack Obama the need to make a politically sensitive decision - that will be closely watched by environmental groups and the oil industry - during a presidential election year.Correspondents say the delay will spare US President Barack Obama the need to make a politically sensitive decision - that will be closely watched by environmental groups and the oil industry - during a presidential election year.
Trumping oil?Trumping oil?
Environmental groups have pressed Mr Obama on what they say is his lack of action on climate change issues and criticised the route of the project. In a statement, Mr Obama said he supported seeking "additional information" about the Keystone XL Pipeline proposal.
The current route runs through a portion of Nebraska that contains a major aquifer. "We should take the time to ensure that all questions are properly addressed and all the potential impacts are properly understood."
A US official told Reuters news agency that an alternate route could shift the pipeline away from that area, known as the Sand Hills. The decision comes after Nebraska's legislature passed a measure on Wednesday that would require state approval of any route before TransCanada, the developer, could begin construction.
Republicans and oil industry groups have already said that delaying or cancelling the project would cost both new jobs and harm prospects for US energy independence. Environmental groups have used the Keystone XL review process to pressure Mr Obama on what they say is his lack of action on climate change issues and criticised the route of the project.
Environmental protesters circled the White House on Sunday, demanding the project be scrapped. Republicans and oil industry groups have already said that delaying or cancelling the project would both cost new jobs and harm prospects for US energy independence.
"The US administration is feeling the heat and wants to put off a decision until after the election," John Bennett of the pressure group Sierra Club Canada told Reuters. Environmental groups hailed Thursday's decision. "The president's decision also means that our property, water and agricultural lands cannot be stripped from us without a fight," said Frances Beinecke, president of the Natural Resources Defense Council.
"It's the first time the environment has trumped oil in US politics." Meanwhile, Canadian Oil Minister Joe Oliver said a US decision to delay or cancel the pipeline would not stop oil sands development in the province of Alberta.
Some believe the delay could kill the project entirely.
"To delay the decision on Keystone XL is in effect a decision itself," said Mark Routt, an analyst at KBC, an oil industry consulting company.
The state department is handling public consultations on the project as the pipeline would cross the US border with Canada, but the White House has made it clear that President Barack Obama will influence the final outcome.
Meanwhile, Canadian oil minister Joe Oliver said a US decision to delay or cancel the pipeline would not stop oil sands development in the province of Alberta.