Keystone XL delay seen giving time for climate concessions

Inspector General

The State Department’s Office of Inspector General said in August that it would issue in January a report on conflict-of- interest allegations that ERM Group Inc. failed to properly disclose financial ties to TransCanada and to oil companies that would refine the oil. State Department officials haven’t said whether they would wait for that review before releasing the environmental impact statement.

“It will give State the excuse they need to further attenuate the decision,” Michael McKenna, president of MWR Strategies Inc., a Midlothian, Virginia-based public policy and communications consulting firm, said in an e-mail. “This pipeline will never be built during the Obama administration.”

No Deadline

The executive order that establishes the process for permitting an international pipeline doesn’t set a deadline.

“We have enough information to realize that the Keystone pipeline is going to dramatically increase greenhouse-gas emissions,” Tom Steyer, a hedge-fund billionaire and Democratic fundraiser, said today in an interview on Bloomberg Television. “We have more than enough information to deny it.”

Obama may be trying to “extract the maximum leverage” in discussions with Canada on reducing emissions from oil sands production, which tend to be higher than other forms of conventional drilling, said David Victor, an international relations professor at the University of California, San Diego, who has written a book on climate change.

Commitments from Canada to reduce the carbon emissions associated with mining the heavy crude from oil sands could help Obama reduce some of the outrage over an approval of Keystone, Victor said.

That’s important for Democrats in upcoming elections because of the money and mobilization the environmental community offers, he said.

830,000 Barrels

The pipeline would be capable of carrying 830,000 barrels a day with 100,000 barrels reserved for the light sweet crude from the Bakken formation in North Dakota and Montana.

Michael Webber, the deputy director of the Energy Institute at the University of Texas in Austin, said delaying a final decision on Keystone also gives Obama more time to establish policies to limit carbon emissions.

The EPA is preparing rules to put limits on emissions from new and existing power plants.

Obama can say, “’You know what? Yeah, I approved the pipeline, but I also put in place a policy on carbon and carbon emissions are falling, so get off my back,’” Webber said.

In a June speech on climate change at Georgetown University in Washington, Obama waded more directly into the decision than he had before, declaring that Keystone shouldn’t be approved if it were found to “significantly exacerbate” carbon pollution.

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