Keystone pipeline decision delayed

It’s official: A final decision on the controversial Keystone XL pipeline will wait until after the November midterm elections.

The latest delay comes as a result of a scheduling decision this week by the Nebraska Supreme Court, which doesn’t plan to hear oral arguments in a crucial Keystone-related case until early September.

That means final resolution of the case is unlikely before October at the earliest, and the State Department has said it will not make a decision on Keystone until after the Nebraska dispute is settled.

In the lawsuit, a group of landowners is challenging legislation signed by Nebraska Gov. Dave Heineman that is designed to speed the project along by approving its route and letting the company use the power of eminent domain in negotiating rights-of-way.

An Obama administration official familiar with the State Department’s decision-making process said it is “highly unlikely that a decision will be made before the midterm election,” given the court’s schedule.

“This is not because of politics. It’s just a reflection of the gravity of this decision,” the official said. “It doesn’t make sense to have the agencies give us their best opinion on whether or not the Keystone pipeline should go forward if the information on which they base it changes dramatically.”

A lower court has declared the state’s route-setting process unconstitutional, finding that the legislature did not have the right to wrest the decision away from the state’s five-member Public Service Commission. If the state Supreme Court upholds that ruling, it would take several more months for Nebraska to finalize a new route.

The delay provides a political reprieve for President Barack Obama, who is under pressure from environmentalists to deny the cross-border permit to TransCanada, the project’s sponsor, on the grounds that it would accelerate climate change. Surveys have found that Americans support the pipeline by a wide margin, viewing it as a project that will create jobs and enhance the nation’s energy security.

Rep. Lee Terry, R-Neb., said the administration still could grant the permit so the project’s construction could proceed. “But it seems the president’s only interest is placating his environmental base in an election year,” Terry said.

It is less clear how postponing a final decision will affect vulnerable Democratic senators in energy-rich states, such as Mary Landrieu of Louisiana and Mark Begich of Alaska, who have come under fire for their ties to the president and his environmental policies.

The pipeline would transport roughly 830,000 barrels of crude oil a day through a network stretching from Canada’s oil-sands region to refineries in Port Arthur, Texas. Proponents argue that Obama can approve the permit without waiting for resolution of the Nebraska case.

Long delays in the federal permitting process, which has lasted five years, mean that TransCanada must get new approval from South Dakota for the part of its route that goes through that state. TransCanada spokesman Shawn Howard said the conditions for approval “are stronger” than they were several years ago, and the company does not expect any problems.

But Jane Kleeb, who heads the pipeline-opposition group Bold Nebraska, said TransCanada could face a fight in South Dakota because some tribal groups may oppose renewal of the construction permit. She also said she was confident that the administration eventually would block the pipeline.

“If the president was going to approve this pipeline, he would have approved it a long time ago,” Kleeb said. “Time clearly has been on our side.”

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