Obama To Rule On Keystone Despite Builder’s Plea For Delay

Pipes for Transcanada Corp's planned Keystone XL oil pipeline are pictured in Gascoyne, North Dakota in this November 14, 2014 file photo. REUTERS/Andrew Cullen/Files

Pipes for Transcanada Corp's planned Keystone XL oil pipeline are pictured in Gascoyne, North Dakota in this November 14, 2014 file photo. REUTERS/Andrew Cullen/Files

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WASHINGTON | President Barack Obama wants to rule on the long-pending Keystone XL oil pipeline by the end of his presidency, the White House said on Tuesday, calling a request by the project's Canadian developer to delay a review "unusual."

Obama, who has increasingly focused on environmental issues as his presidency nears its final year, plans to decide on TransCanada Corp's (TRP.TO) pipeline before he leaves office in 2017, White House spokesman Josh Earnest told reporters.

The president has increasingly signaled the $8 billion pipeline may not be approved.

Obama is concerned the method used to extract oil in Canada would be "extraordinarily dirty," a description the Canadian government has argued is unfair.

He also said that the pipeline would not be approved if it mostly benefited Canadian companies and would contribute to climate change.

Faced with dimming prospects for approval of the pipeline that would help link Canada's Alberta oil fields to U.S. refineries, the Canadian company on Monday asked the Obama administration to delay its review, signaling that prolonged uncertainty is preferable to rejection of the project.

The request "seems unusual," Earnest said, as the process has already taken more than seven years. Noting that the presidential election is a year away, Earnest said, "I don't think that that's a good excuse for, basically, spending the next year doing nothing."

TransCanada's plea has been widely interpreted as an attempt to avert an impending "no" from Obama to the nearly 1,200-mile (2,000-km) cross-border pipeline. It would carry 830,000 barrels a day of mostly Canadian oil sands crude through Nebraska en route to refineries and ports along the U.S. Gulf Coast.

TransCanada, which reported a better-than-expected quarterly profit on Tuesday, said it is pushing to develop Energy East, an alternative to Keystone XL. The company's earnings rose 32 percent in the third quarter, helped by a stronger U.S. dollar. Its shares were up 0.5 percent to C$44.44.

For years Keystone has been the heart of a struggle between environmentalists opposed to oil sands development and defenders of fossil fuels. Environmentalists, an important part of Obama's base, say approving Keystone would breathe life into Canada's oil sands because alternative pipelines are nearly full.

All the Democratic presidential hopefuls, including front-runner Hillary Clinton, oppose the project, while most of the Republican presidential candidates support it.

The State Department, which is considering the project because it crosses the border with Canada, said it is in the process of responding to TransCanada but had no estimate of how long it would take.

The pipeline has many supporters in the U.S. Congress from oil-producing states, as it would also carry a small amount of domestic oil. But earlier this year Obama vetoed a bill that would have given Congress the power to approve the project.

Senator John Hoeven, a Republican from oil-producing North Dakota and a Keystone supporter, said he had meetings with TransCanada about its plans to request a delay. He said the strategy was practical for the government of Canada's new Prime Minister Justin Trudeau, also a Keystone supporter.

"My opinion is the new government coming in is looking at this as a pragmatic way of handling it," Hoeven said.


(Reporting by Timothy Gardner and Roberta Rampton; Additional reporting by Bruce Wallace in Los Angeles, Nia Williams in Calgary, Euan Rocha in Toronto and Valerie Volcovici in Washington; Editing by Jeffrey Benkoe and Lisa Shumaker)


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