Feds Delay Decision On Pipeline Project

The State Department is delaying a decision for at least a year on whether to approve the Keystone pipeline. The $7 billion pipeline would carry oil from the tar sands of Alberta, Canada, through the U.S. to Gulf of Mexico refineries. Nebraska's state government and environmental groups have put intense pressure on the State Department and White House to reject the pipeline's proposed route. NPR's Richard Harris talks with Robert Siegel about the project.

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GUY RAZ, HOST:

This is ALL THINGS CONSIDERED from NPR News. I'm Guy Raz.

ROBERT SIEGEL, HOST:

And I'm Robert Siegel. The idea of building a pipeline from the oil sands of Canada to the refineries of Texas will have to wait - a year at least - until after the next presidential election. A decision on the massive project was just a few weeks off, but today, the State Department called for new studies to consider alternative routes through Nebraska. The legislature there had been called into session over concerns about possible pipeline spills in sensitive areas. NPR's Richard Harris is with me now. And, Richard, this pipeline, which is known as the Keystone XL, what does the State Department's decision mean for you?

RICHARD HARRIS, BYLINE: Well, the company that's planning to build the pipeline is called TransCanada, and they'll now have to go back and suggest new routes for the pipeline through Nebraska. There was substantial public concern voiced about the route that was sort of on the books, which runs through this environmentally sensitive area called the Sandhills region, and it runs over the Ogallala Aquifer, which is a major source of water for Nebraska. But locals said we don't want that. So what's going to happen is TransCanada will now have to come back and make a supplemental environmental impact statement, and that will probably take at least until 2013, the State Department estimates.

SIEGEL: Why didn't these Nebraska questions come up earlier?

HARRIS: Actually, they did come up earlier in a lot of public comments. But the environmental review decided that the pipeline posed a small enough risk actually that going across the aquifer in the Sandhills region was the best alternative. However, that conclusion came under heavy attack, first from environmental groups who said that the contractor that did the environmental impact statement had conflicts of interest, and later by the Republican governor of Nebraska who was responding to a growing popular outcry in that state.

SIEGEL: What kind of reaction are you hearing to this delay?

HARRIS: Well, there's predictably an angry reaction from TransCanada, the company that's been planning to build the $7 billion pipeline. They're talking about lost jobs and delays, and pointing out that it means that the U.S. will be - will remain more dependent upon oil from the Middle East for the time being. But the company had previously suggested that a major delay would cause them to abandon the project altogether, and they didn't say that again today. So - also, from some labor unions, they're disappointed because they've been pushing this as a source of jobs. But environmentalists are quite happy to see that they've succeeded in at least delaying a decision that at one point seemed like a done deal.

SIEGEL: Some of the environmentalists are opposed to the pipeline because they just want to see the oil kept in the ground. They're concerned about global warming. Will that issue be addressed in the next State Department review?

HARRIS: Well, part of the reason this is so controversial is the source of this oil is - doesn't just flow out of the ground like other oil does. It's a sticky mix of sand and oil and a substance called bitumen. So it takes a lot of extra energy to extract this oil. Plus, the amount of oil in the ground there is huge, second only to Saudi Arabia by some estimates. So environmentalists said they'd rather see the administration working to develop clean sources of energy, but the State Department says nope, not going to factor that into this review. It's simply about studying alternative routes through Nebraska.

SIEGEL: What's the politics of this project and this decision?

HARRIS: Well, environmentalists actually made this a test of President Obama since -among other things, it was one of the few issues that he could decide by himself. It didn't go through Congress. So they sort of held his feet to the fire and said, how, you know, how much are you going to stick with us on this issue? And obviously, they are not going to throw their support to Republicans running against him, but they hinted that they might end up not being as enthusiastic on the campaign trail as they would be otherwise.

So even though this decision will be put off until the next presidential election, the White House and the State Department both said politics did not enter into this decision.

SIEGEL: OK. Thank you, Richard.

HARRIS: My pleasure.

SIEGEL: That's NPR's Richard Harris.

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